ED is required to furnish grounds of arrest in writing: SC

In its October 2023 judgment, the bench, while stating that ED is “not expected to be vindictive in its conduct” and has to act fairly and in a transparent manner, had ordered “it will be necessary, henceforth, that a copy of grounds of arrest is furnished to the arrested person as a matter of course and without exception”.

The judgment came on a plea by Pankaj Bansal and Basant Bansal, Directors of M3M real estate group, who had challenged an order of the Punjab and Haryana HC which declined to set aside their arrest by the ED under the PMLA.

The money laundering case in which Basant and Pankaj Bansal were arrested pertained to an FIR filed by the anti-corruption bureau of the Haryana Police in April last year.

Noting that grounds of arrest were only read to the accused and had not been given to them in writing, the bench said it “reeks of arbitrariness”. Expressing its disapproval, the bench said the “chronology of events speaks volumes and reflects rather poorly, if not negatively, on the ED’s style of functioning”.

Holding their arrest illegal, the bench said the investigating officer reading out the reasons for arrest to the accused does not fulfill the mandate of Article 22 (1) of Constitution and Section 19 (1) of the PMLA.

The bench said, “Being a premier investigating agency… every action of the ED in the course of such exercise is expected to be transparent, above board and conforming to the pristine standards of fair play in action. The ED, mantled with far-reaching powers under the stringent Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness.”