Pankaj Bansal vs Union of India & Ors. (Supreme Court of India)
In a significant and far-reaching judgment, the Supreme Court of India, in the case of Pankaj Bansal vs. Union of India & Ors., has laid down a crucial precedent that has wide-ranging implications for the functioning of the Enforcement Directorate (ED) in the country. The court’s decision underscores the importance of upholding the rights of the accused during arrest and ensuring that the ED acts in a fair and just manner.
Background of the Case:
The case of Pankaj Bansal vs. Union of India & Ors. is a legal matter that has significant implications for the functioning of the Enforcement Directorate (ED) in India. In this case, the Supreme Court of India has issued a landmark judgment emphasizing the importance of safeguarding the rights of the accused during arrest and ensuring that the ED conducts its actions fairly and justly.
Overview of the Money Laundering Case:
The core of this legal battle revolves around allegations of money laundering. The case originated with the registration of FIR No. 0006 dated 17.04.2023, initiated by the Anti-Corruption Bureau in Panchkula, Haryana. This FIR involved charges under Sections 7, 8, 11, and 13 of the Prevention of Corruption Act, 1988, along with Section 120B of the Indian Penal Code. These charges were related to corruption, bribery, and criminal conspiracy.
The named accused in this FIR included:
i) Mr. Sudhir Parmar (the then Special Judge, CBI, and ED, Panchkula); ii) Mr. Ajay Parmar (nephew of Mr. Sudhir Parmar and Deputy Manager (Legal) in M3M Group); iii) Mr. Roop Bansal (Promoter of M3M Group); iv) Other unknown individuals.
Crucially, prior to this FIR, between 2018 and 2020, 13 FIRs had been registered by allottees of two residential projects of the IREO Group, alleging illegal activities on the part of its management. These FIRs led to the ED recording Enforcement Case Information Report No. GNZO/10/2021 dated 15.06.2021. This report was linked to alleged money laundering offenses committed by the IREO Group and its Vice-Chairman and Managing Director, Lalit Goyal. Notably, neither the M3M Group nor the appellants (Pankaj Bansal and Basant Bansal) were initially named as accused, and no allegations were made against them in these reports.
On 14.01.2022, the ED filed Prosecution Complaint No. 01/2022 titled ‘Assistant Director, Directorate of Enforcement vs. Lalit Goyal and others.’ This complaint included seven named accused and was filed under Section 200 of the Code of Criminal Procedure (Cr.P.C), along with Sections 44 and 45 of the Prevention of Money Laundering Act, 2002 (the Act of 2002). Once again, neither the M3M Group nor the appellants were among the named accused. Subsequently, the number of FIRs increased from 13 to 30, as indicated in this complaint. This case, titled ‘Directorate of Enforcement vs. Lalit Goyal and others,’ was pending in the court of Sudhir Parmar, Special Judge.
However, information received by the Anti-Corruption Bureau, Panchkula, suggested favoritism by Sudhir Parmar towards Lalit Goyal, the owner of IREO Group, and Roop Bansal and his brother, Basant Bansal, the owners of M3M Group. This led to the registration of FIR No. 0006 dated 17.04.2023, which is central to the case in question.
Arrest of Pankaj Bansal and Basant Bansal:
Concerns arose that Pankaj Bansal and Basant Bansal might also face action in relation to the first Enforcement Case Information Report (ECIR). In response, they sought interim protection from the Delhi High Court in Bail Application Nos. 2030 and 2031 of 2023. In separate orders dated 09.06.2023, the Delhi High Court took several factors into account:
- Pankaj Bansal and Basant Bansal had not been named in the first ECIR.
- The ED had not been able to implicate them in any of the scheduled offenses under the Act of 2002.
- Pankaj Bansal had not been summoned by the ED in that case.
Based on these considerations, the Delhi High Court granted them interim protection in the form of anticipatory bail, subject to certain conditions, until the next date of hearing, set for 05.07.2023. The ED challenged these orders through Special Leave Petition (Crl.) Nos. 7384 and 7396 of 2023, which remained pending before the Supreme Court.
These events culminated in the present Supreme Court case, where the central issue revolved around the manner in which the ED had conducted the arrests of Pankaj Bansal and Basant Bansal in relation to money laundering allegations. The Supreme Court’s judgment, delivered on October 3, 2023, addressed critical aspects of arrest procedures and the rights of the accused in such cases.
Legal Rights of the Accused:
The Supreme Court’s judgment in the case of Pankaj Bansal vs. Union of India & Ors. delves deeply into the legal rights of the accused, particularly in the context of their arrest by the Enforcement Directorate (ED). This section highlights the constitutional guarantees and statutory provisions relevant to the case.
Constitutional Guarantees (Article 22(1)):
Article 22(1) of the Indian Constitution plays a pivotal role in protecting the rights of individuals who have been arrested. It explicitly states that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for such arrest. This constitutional guarantee serves as a fundamental right granted to the arrested person and forms the foundation for ensuring transparency and fairness in arrest procedures.
Statutory Provisions (Section 19(1) of the Prevention of Money Laundering Act, 2002):
In addition to constitutional protections, the case also revolves around Section 19(1) of the Prevention of Money Laundering Act, 2002 (the Act of 2002). This statutory provision outlines the circumstances under which a person may be arrested under the Act. Section 19(1) requires the authorized officer to have “reason to believe” that the arrested person is guilty of an offense under the Act of 2002. Understanding this section is crucial for assessing the validity of the arrest and ensuring that it aligns with the law.
Inconsistencies in ED’s Practices:
A significant aspect of the case centers on the varied procedures employed by the Enforcement Directorate (ED) when it comes to informing the arrested person of the grounds for their arrest. This section explores these inconsistencies and the importance of achieving uniformity in such practices.
Varied Procedures for Grounds of Arrest:
One of the striking inconsistencies observed is the diverse approaches taken by the ED in different regions of the country regarding how they convey the grounds of arrest to individuals in custody. While written copies of the grounds of arrest are provided to arrested persons in some areas, in others, this practice is either not followed, or the grounds are merely read out to the individual. These discrepancies raise questions about the standardization of arrest procedures and their adherence to legal requirements.
The Importance of Uniformity:
Uniformity in arrest procedures is not just a matter of administrative convenience; it is a fundamental element in upholding the rights of the accused and ensuring that the law is applied consistently across the country. The absence of standardized practices can lead to situations where individuals are unaware of the basis for their arrest, potentially infringing upon their constitutional and statutory rights.
Supreme Court’s Emphasis on Written Grounds:
The Supreme Court’s judgment in the case of Pankaj Bansal vs. Union of India & Ors. places significant emphasis on the necessity of providing written grounds of arrest to the accused at the time of arrest. This section delves into the court’s reasoning behind this emphasis and the implications of this requirement.
The Significance of Providing Written Grounds:
The Supreme Court recognizes that conveying the grounds of arrest in a meaningful and transparent manner is of paramount importance. Providing the arrested person with written grounds of arrest serves as a critical step in ensuring that they are informed comprehensively about the reasons for their detention. This aligns with the constitutional guarantee enshrined in Article 22(1) of the Indian Constitution.
Ensuring Accused Awareness of Basis for Arrest:
To seek release on bail, an arrested person must be aware of the grounds on which the authorized officer arrested them under Section 19 of the Act of 2002. This awareness is essential for the arrested individual to present a case before the Special Court, demonstrating that there are grounds to believe they are not guilty of the alleged offense. The provision of written grounds of arrest facilitates this awareness and allows individuals to exercise their legal rights effectively.
Facilitating Legal Rights, Including Bail:
Section 45 of the Act of 2002 allows an arrested person under Section 19 to seek release on bail. However, this provision specifies that the court must be satisfied that there are reasonable grounds to believe that the arrested person is not guilty of the offense and is not likely to commit any offense while on bail. To meet this requirement, the arrested person must be informed of the grounds for their arrest. Providing written grounds of arrest thus plays a pivotal role in facilitating the exercise of legal rights, including the right to seek bail.
Concerns About Arbitrary Conduct:
The Supreme Court’s judgment critically examines the actions of the Enforcement Directorate (ED) in the case at hand. This section scrutinizes the ED’s conduct and its implications for the legality of the arrests.
Examination of ED’s Actions in the Case:
The Supreme Court carefully scrutinized the actions of the ED in the case of Pankaj Bansal and Basant Bansal. It was noted that the ED had accused Pankaj Bansal of being evasive in providing relevant information. However, it was not clarified why Pankaj Bansal’s replies were categorized as “evasive,” and no supporting record was presented for verification. Importantly, the Supreme Court emphasized that custodial interrogation is not for the purpose of obtaining confessions, as the right against self-incrimination is protected by Article 20(3) of the Indian Constitution.
The Issue of Second Enforcement Case Information Report (ECIR):
A critical aspect that raised concerns about the ED’s actions was the recording of the second Enforcement Case Information Report (ECIR) immediately after Pankaj Bansal and Basant Bansal secured interim protection in relation to the first ECIR. This raised questions about the ED’s exercise of power and the possibility of it being arbitrary in nature.
Court’s Views on Arbitrary Exercise of Power:
The Supreme Court’s judgment firmly addressed concerns related to the arbitrary exercise of power by the ED. It emphasized that the arrest of the appellants and their subsequent remand to the custody of the ED and, thereafter, to judicial custody, could not be sustained. The lack of adherence to the provisions of Section 19(1) of the Act of 2002 and the clandestine conduct of the ED in pursuing the appellants were both highlighted as issues that undermine the fairness and legality of the arrests.
Mandate for Transparency and Fairness:
The judgment of the Supreme Court in the case of Pankaj Bansal vs. Union of India & Ors. carries significant implications for ensuring transparency and fairness in the arrest procedures conducted by law enforcement agencies, particularly the ED. This section explores the broader implications of the Supreme Court’s decision.
Implications of the Supreme Court’s Decision:
The Supreme Court’s decision sets a clear precedent for the conduct of law enforcement agencies, including the ED. It underscores the importance of adhering to constitutional and statutory provisions and ensuring that individuals’ rights are protected during arrest. This decision serves as a reminder that the principles of transparency and fairness must be upheld at all stages of the legal process.
Setting a Precedent for Law Enforcement:
The judgment in this case is expected to have a far-reaching impact on law enforcement practices in India. It sends a clear message that agencies like the ED must operate within the bounds of the law and treat accused individuals with fairness and respect for their rights. The Supreme Court’s decision sets a precedent that reinforces the rule of law and emphasizes that no one is above it.
Upholding Individual Rights and Justice:
At its core, the Supreme Court’s decision is about upholding the individual rights of those accused of offenses, even in cases of alleged financial wrongdoing. By mandating the provision of written grounds of arrest, the Court ensures that individuals are aware of the basis for their detention, allowing them to defend themselves effectively. This decision reinforces the principle that justice must be fair, transparent, and accessible to all.
In essence, the Supreme Court’s judgment in the case of Pankaj Bansal vs. Union of India & Ors. sets a precedent for law enforcement agencies to operate within the boundaries of the law, safeguarding the rights of the accused and upholding the principles of transparency, fairness, and justice.
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Author: Sanjeev Sirohi, Advocate, s/o Col (Retd) BPS Sirohi, A 82, Defence Enclave, Sardhana Road, Kankerkhera, Meerut, Uttar Pradesh – 250001
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