This month, the Supreme Court delivered its judgment in Ram Kishor Arora v. Directorate of Enforcement, indicating that its prior judgment in Pankaj Bansal v. Union of India – which mandated the furnishing of written grounds of arrest to an accused at the moment of arrest by the Enforcement Directorate (ED) – was wrong, and that such grounds can be communicated orally at the moment of arrest, given their written furnishing in the next 24 hours.
In this essay, I discuss the court’s reasoning in Arora, proposing that its unjustified circumvention of Bansal, alongside its unclear stance on the implications of Bansal’s circumvention, means that Bansal continues to govern the law on arbitrary arrests, with Arora requiring reconsideration by a larger bench.
R.K. Arora – Bypassing procedure, settled case-law
The instant case arose with the ED arresting R.K. Arora – the founder of the real estate company Supertech Ltd. – concerning various allegations of the money laundering offence, which the ED is empowered to investigate and pursue under the Prevention of Money Laundering Act, 2002 (PMLA). He had been previously summoned for interrogation by the ED u/s 50 of the PMLA in connection with various offences constituting money laundering, for which he was arrested in June 2023. The ED can, in the exercise of its powers u/s 19 of the PMLA, make arrests – a scheme upheld by the court in Vijay Madanlal Choudhary v. Union of India.
After Arora’s bail applications were rejected, it was claimed that the arrest itself was vitiated, for the ED did not furnish its grounds in a written format at the time of making the arrest. The requirement of furnishing written grounds of arrest at the time the arrest is made (the “immediate-furnishing rule”) was read into Section 19(1) of the PMLA in Bansal, which laid down – as I have argued here – three principles: first, the accused must – at the time of arrest – receive its grounds in a written format; second, that the accused’s general uncooperativeness during investigation cannot be a mode through which the agency’s “reason to believe” in the accused’s guilt is developed; and third, that the ED cannot arrest with mala fides.
Also read: ED Can Give Grounds in Writing To Accused Within 24 Hours of Arrest: Supreme Court
In the instant case, the first principle – which concerns the immediate furnishing rule – was alleged to have been violated. In Bansal, the court held that if arrests are made without the fulfillment of the procedural condition of furnishing written grounds, the arrest would be vitiated, entitling the accused to an unconditional release. On this basis, Arora claimed that the non-furnishing of grounds at the moment of arrest entitled him to be released, notwithstanding that such grounds were furnished later.
In justifying the ED’s actions in effecting Arora’s arrest, the court bypassed Bansal – it held that the immediate-furnishing rule was unnecessary, and such grounds could – pursuant to the three-judge bench decision in Choudhary – be furnished to the accused “as soon as may be”. In interpreting this term, the court offered it the meaning “as early as possible without avoidable delay”, or “within reasonably convenient or reasonably requisite period of time”. This duration, in quantifiable terms, was capped at 24 hours after the arrest: this meant that while the accused is provided the grounds of arrest orally at the moment of effecting arrest, the written grounds can be supplied within the next 24 hours (the “postponement rule”).
Arora’s demerits, unjustified departures from Bansal
The judgment, however, offers little justification for why this departure from Bansal – which was also a two-judge bench – is warranted. This is because under the system of stare decisis, the court cannot depart from the law declared by a coordinate bench, and is bound irrespective of its disagreements therewith. The one exception to this norm is when the court finds the law declared by a coordinate bench “per incuriam”, meaning that it ignored or departed from a binding precedent, decided by another coordinate or larger bench.
Bansal insinuates, without conclusively observing, that Bansal – in its pronouncement of the immediate-furnishing rule – departed from Choudhary, holding that “any observation…contrary to…Vijay Madanlal Choudhary…would be not in consonance with…jurisprudential wisdom”. It does not, however, demonstrate how Bansal undermines or deviates from Choudhary. In Bansal, the court – in order to ward off possible criticism concerning its departure from Choudhary – specifically noted the extent to which Choudhary applied to the issue of the police’s responsibilities while arresting, ensuring that its creation of the immediate-furnishing rule would not be deemed per incuriam in the future.
In Bansal, the court noted that Choudhary went only insofar as suggesting that the accused must be informed of the arrest’s grounds, leaving open the question of the manner of communication. Based on Choudhary’s silence, therefore, the court held that the immediate-furnishing rule would best serve the accused’s interests – along with, but secondarily, those of the ED – for four reasons: first, the accused, in order to apply for bail, must know the circumstances leading to their arrest, necessitating their knowledge of the arrest’s grounds; second, since the ED has “material in…possession” indicative of guilt as a precondition for arresting u/s 19(1), an obligation to provide written grounds poses no disproportionate burden; third, permitting the furnishing of grounds orally, while simultaneously recognising that the arrest is vitiated based on their non-furnishing, meant that the only evidence in assessing vitiation would be “the debatable ipse dixit of the authorized officer”; and fourth, a person being arrested – due to the voluminous nature of the grounds and their anxious mental state – would be unable to remember, and consequently seek legal assistance in connection with the grounds orally disclosed.
In Arora, however, the Court did not engage with these reasons favouring the immediate-furnishing rule, emphasising instead on a literal construction of the term “as soon as may be” u/s 19(1), which would – instead of implying an instant written furnishing of grounds – imply that such grounds be furnished within 24 hours. Simultaneously, however, the court remarked that the oral furnishing of grounds is essential at the moment of arrest.
This restores the very same problem Bansal sought to eliminate – now, challenges based on the vitiation of arrests due to non-furnishing of oral grounds at the moment of arrest can again be made, and the only evidence presentable by the ED and the accused – as noted in Bansal – becomes their ipse dixit. Further, the creation of the postponement rule is likely to act to the accused’s disadvantage at remand hearings: since the accused is, pursuant to Section 19(3), required to be presented before a Magistrate in twenty-four hours, they must be in a position to – pursuant to Arnesh Kumar v. State of Bihar – make a case for bail at the remand hearing itself. At the remand hearing, therefore, it is possible that the accused has not yet been furnished the written grounds, which places them in a situation where they must offer a legal defence without knowledge of the ED’s case against them. This is aggravated by the fact that bail under the PMLA is highly factual – the Magistrate assesses the likelihood with which an accused committed the offence, instead of enquiring into risks associated with release, such as tampering with evidence, intimidating witnesses, or fleeing. The accused, therefore, must know the collection of facts constituting the ED’s case in order to make a meaningful case at the remand hearing, an outcome made highly difficult by Arora.
Also read: ‘Isn’t it Overreach?’: SC Hauls Up Enforcement Directorate Over ‘Hurry’ in Arrests
Lastly, even if the principled basis for Arora concerns the prevention of release-related litigation on frivolous grounds when the ED has – in substance – effectively communicated the reasons necessitating arrest, the additional burden imposed on the ED through the immediate-furnishing requirement is unclear. The ED must, pursuant to Section 19(1), record its “reason to believe” in the accused’s guilt in a written form before an arrest is made. In case the ED is already in possession of a written document containing the reasons through which its belief in the accused’s guilt has been developed, it is unclear how the furnishing of such reasons at the time of arrest is a burdensome task, such that the case-law has to be dubiously modified to give the ED an additional day to do it.
Bansal not overruled, continues to govern the law on arrests
The departure from Bansal aside, the court in Arora is highly unclear in its own conceptualization of the implications of its disagreement with Bansal. As an aside, it must be noted that Bansal offered three principles governing the ED’s power of arrest, and two of them – which concern the prohibition on arresting with mala fides, and the prohibition on the “reason to believe” u/s 19(1) developing through the accused’s uncooperativeness – continue to be the law, irrespective of Arora’s legal effects. The only issue on which Arora could have departed from Bansal was the immediate-furnishing rule, which, I propose, also continues to be the law.
Arora, the accused in the instant case, was arrested in June 2023, while the judgment in Bansal was delivered in October 2023. The Court, in holding that the ED had no obligation to provide Mr. Arora the written grounds of his arrest, held that Bansal did not operate retrospectively, for it used the word “henceforth” in qualifying the written-grounds requirement. On this basis, the non-furnishing of grounds till the judgment in Bansal was upheld:
Based on the prospective character of Bansal, therefore, the Court held that the non-furnishing of written grounds to Mr. Arora could not be considered illegal. Simultaneously, however, the Court moved from the immediate-furnishing rule to the postponement rule, holding that such a construction would do justice to the term “as soon as may be” u/s 19(1), as it was interpreted in Choudhary:
The above holding, it is submitted, is per incuriam, for it wholly conflicts with Bansal’s pronouncement on the very same legal question without finding Bansal itself bad in law. The postponement rule has the effect of displacing the immediate-furnishing rule laid down in Bansal, and the two cannot coexist. The only correct reading of Arora, therefore, is one that constrains its application to arrests prior to Bansal, such that the oral furnishing of grounds – alongside a postponed delivery of written grounds – would not have the effect of vitiating an arrest (provided, of course, its occurrence prior to Bansal). Arora would, therefore, require reconsideration, so that the postponement rule becomes confined in application to pre-Bansal arrests, and the immediate-furnishing rule for post-Bansal arrests is affirmed.
Conclusion
On this basis, I submit that the court’s judgment in Arora, which offers highly lacklustre reasoning in departing from Bansal’s immediate-furnishing-rule, is also per incuriam to the extent it seeks to replace the immediate-furnishing rule with the postponement rule for post-Bansal cases. Arora can be offered only one correct reading, such that its application is constrained to cases where the ED made arrests prior to Bansal. In order to prevent the attribution of precedential value to the postponement rule, Arora must be reconsidered in the near future.
Kartik Kalra is a third-year B.A. LLB (Hons) student at the National Law School of India University Bengaluru.
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