Oral Communication Of Grounds Of Arrest Is In Proper Compliance With PMLA For Arrests Made Before SC Decision In Pankaj Bansal v UoI: Delhi HC

The Delhi High Court has held that an oral communication of “grounds of arrest” to an accused is proper compliance of Section 19(1) of Prevention of Money Laundering Act for arrests which were made prior to the ruling passed by the Apex Court in Pankaj Bansal vs Union of India (2023).

In that context, the Bench of Justice Vikas Mahajan noted that, "the use of the expression 'henceforth' in Pankaj Bansal implied that the requirement of furnishing grounds of arrest in writing to the arrested person as soon as after his arrest was not mandatory or obligatory till the date of pronouncement of the said judgment and accordingly, non furnishing of grounds of arrest in writing till the said date could neither be held to be illegal nor the action of the concerned officer in not furnishing the same in writing could be faulted with."

With that context, it was held that, "it has to be borne in mind that in the present case, the petitioner was arrested prior to the decision of Pankaj Bansal when oral communication of the grounds of arrest was proper compliance of the provisions of Section 19(1) of the PMLA."

Senior Counsel Kapil Sibal, along with others, appeared for the petitioner, while Special Counsel Zoheb Hossain, along with others, appeared for the respondent.

In this case, the Court was hearing a plea against the arrest of Neeraj Singal, who was the former Managing Director of Bhushan Steel Limited. The arrest was in a money laundering case related to Enforcement Directorate's probe in a bank fraud case, wherein the ED alleged that the accused had caused loss of more than Rs. 46,000 Crores to the public.

The main issue before the Court was whether the petitioner was orally communicated, or in other words shown, the grounds of arrest at the time of his arrest.

It was noted that the the document ‘ground of arrest’ bore the signatures of the petitioner at two points. With that background, it was observed that, "No provision of law has been pointed out and there seems to be none which required that each page of ‘ground of arrest’ is to be signed by the petitioner."

In light of the same, it was held that, merely because each page of the ‘ground of arrest’ is not signed by the petitioner cannot be a reason to disbelieve the existence of the said document, or to negatate the fact that the grounds of arrest were shown and informed to the petitioner.

Subsequently, the petition was disposed by holding that the arrest of the petitioner was not illegal.

Cause Title: Neeraj Singal vs Directorate of Enforcement

Click here to read/download the Judgment