The Supreme Court has dismissed the Union government’s plea to reconsider its judgment that made it mandatory for the Enforcement Directorate (ED) to provide a copy of the grounds of arrest to accused in money laundering cases while adding that a mere verbal information would be construed as a breach of constitutional right of arrested persons.

“We have carefully gone through the review petitions and the connected papers. We do not find any error, much less apparent, in the order impugned, warranting its reconsideration. The review petition is dismissed accordingly,” held a bench of justices AS Bopanna and Sanjay Kumar. The review petition was considered by judges in their chambers on Wednesday. The order was released on Friday.

The Centre filed the review petition in December against the Supreme Court’s October 3 judgment which questioned the federal agency’s “style of functioning” and directed it to maintain “pristine standards of probity and fairness” instead of being vindictive.

“We hold that it will be necessary for a copy of grounds of arrest to be furnished to the accused at the time of arrest,” the court had then ordered, virtually taking the sting out of one of ED’s controversial powers that was affirmed by another top court judgment delivered IN 2022.

The July 2022 judgment by the top court had earlier held that informing an accused about the grounds of arrest is “sufficient compliance” of the mandate of Article 22(1) of the Constitution, which lays down that no arrested person shall be detained in custody without being informed of the grounds of arrest nor shall they be denied the right to legal representation of his choice.

However, taking a divergent view, the two-judge bench on October 3 said that it is the constitutional right of a person under Article 22(1) to be informed of the grounds of arrest and that this right can be effectively realised only when the grounds are supplied in a written form. This, the bench said, would enable the accused to take legal counsel based on the written grounds of arrest, adding the absence of written grounds of arrest would boil down to the word of ED against the word of the accused.

The judgment clarified that the mere passing of an order of remand by a jurisdictional trial court cannot subsequently validate the grounds of arrest nor can it be said to be a sufficient fulfilment of ED’s obligation under the Constitution or the Prevention of Money Laundering Act (PMLA), 2002.

The October 3 judgment further held that ED cannot arrest anyone under the Prevention of Money Laundering Act (PMLA) for failing to respond to agency’s questions, or for a mere non-cooperation in response to summons, adding it is not legitimate for the federal anti-money laundering agency to expect an admission of guilt from a person called for interrogation.

Flagging the lack of uniform practice followed by ED for supply of the grounds of arrest to accused, the top court on October 3 maintained that the situation required laying down norms for the entire country so that the right balance could be struck between an investigation and the right of accused.

That judgment came as the bench ordered immediate release of arrested directors of real estate group M3M in an alleged money laundering case. Pankaj and Basant Bansal were summoned by ED on June 14 for questioning in connection with a money laundering case, but they were arrested in another case registered by ED on the same day. The Bansals challenged their arrest citing breach of Article 22 and Section 19(1) of the PMLA, which provided that accused has to be contemporaneously informed about the grounds of arrest.

While ED claimed that its officials read out the grounds of arrest to the Bansals at the time of their arrest, the top court maintained that merely reading out the grounds of arrest does not fulfil the mandate of either Article 22(1) of Constitution or Section 19(1) of the PMLA.

The Bansals are accused by ED of diverting ₹400 crore through several shell companies. The agency has further alleged that M3M, along with another realty firm Ireo Group, tried to manipulate the trial court proceedings in the ED cases by “indirectly” bribing a Panchkula special court judge, who was suspended from service on April 27.

The Supreme Court’s views in its October 3 judgment were at a complete variance from the three-judge bench ruling in July 2022 when the court ruled that a person being arrested can be denied a copy of the Enforcement Case Information Report (ECIR) -- the equivalent of an FIR in an ordinary criminal case.

“Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right. Concededly, the person arrested, in terms of Section 19 of the 2002 Act, is contemporaneously made aware about the grounds of his arrest. This is compliant with the mandate of Article 22(1) of the Constitution... So long as the person has been informed about grounds of his arrest that is sufficient compliance of mandate of Article 22(1),” the 2022 judgment had held while affirmed agency’s sweeping powers for summoning individuals, making arrests, conducting raids, and attaching properties of the suspects.

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