15 December 2023 Criminal Appeals & Suspension of Sentence >> Criminal Law   |   Prevention Of Money Laundering Act >> Criminal Law  

The Supreme Court recently addressed a crucial question regarding the timing of informing individuals arrested under the Prevention of Money Laundering Act (PMLA) about the charges against them. The central issue revolved around whether a written document outlining the arrest reasons must be provided at the time of arrest.

A Matter of Timing:

The case stemmed from a challenge to the arrest procedures followed by the Enforcement Directorate (ED). The crux of the argument centered on ensuring compliance with Section 19 of the PMLA, which mandates informing the arrested person about the grounds for arrest "as soon as may be."

Conflicting Benchmarks:

The appellant's defense drew support from recent Supreme Court pronouncements in the V. Senthil Balaji and Pankaj Bansal cases. These judgements emphasized furnishing a copy of the arrest memo as a mandatory step. However, the ED countered by citing the precedent set by the Vijay Madanlal Choudhary judgement, a three-judge bench decision that upheld the constitutionality of Section 19 and deemed providing a copy of the Enforcement Case Information Report (ECIR) unnecessary.

Defining "As Soon As May Be":

The court's deliberation focused on two critical aspects. Firstly, whether the Pankaj Bansal judgement constituted an error due to a lack of due diligence (per incuriam) in light of the earlier Choudhary verdict. Secondly, the court needed to interpret the meaning of "inform" under Section 19(1). Does it necessitate a written record or simply require verbal communication of the arrest rationale?

Conclusion:

The Court's judgement prioritized the precedent set by the Vijay Madanlal Choudhary case. It clarified that informing the arrested person, even verbally, about the grounds for arrest within a reasonable timeframe (generally considered 24 hours) fulfills the requirements of both Section 19(1) of PMLA and the mandate of Article 22(1) of the Constitution, which safeguards personal liberty.

The court further distinguished between the Pankaj Bansal judgement's prospective implementation ("henceforth") and the existing legal landscape. Arrests prior to this judgement did not require a mandatory written copy of the arrest memo.

  PREVENTION OF MONEY LAUNDERING ACT, 2002