Critical Analysis of the Rk Arora Judgement and Its Impact on Ed Arrest Procedures

Introduction

The Enforcement Directorate is essentially a law enforcement body which is equipped with powers to enforce economic laws and combat economic crimes in India. It deals with cases of money laundering and FEMA infractions. The ED is also specifically empowered under the Prevention of Money Laundering Act of 2002, to detain, arrest and prosecute persons who are accused of committing economic offences. Recently, however, the ED has been under fire for having near-unlimited powers specifically with regard to its powers of detention.

On October 3rd 2023, the Supreme Court took a valuable step towards limiting the powers of the ED and making basic procedural rights applicable to it. However, the Supreme Court, through another judgement delivered on the 15th of December 2023, has again diluted the safeguards that were put in place to protect persons from being arbitrarily arrested. This blog seeks to critically examine this decision and also understand its impact on ED arrest procedures.

Brief Overview Of The Pankaj Bansal Judgement

In the case of Pankaj Bansal vs. UOI, the Supreme Court established essential principles with regard to section 19(1) of the Prevention of Money Laundering Act, which states that upon the arrest of any person for an offence punishable under the act, the ED has to inform him of the grounds for such arrest. The court laid down the following:

Firstly, the court held that the grounds for arrest must be communicated to the arrested persons in written format in order to be compliant with the requirement under section 19(1). The court held that failure to inform the accused about the grounds of arrest would render the arrest invalid. The court also went on to add that a person being non-cooperative during the interrogation and coming across as evasive cannot form the sole basis for arrest. The court lastly and most importantly held that the Enforcement Directorate must have a genuine belief and reason for the accused person’s guilt based on evidence, and cannot arrest with malicious intent.

This ruling was a deviation from prevailing trends that had strengthened the powers of the ED, and through it, emphasised the importance of procedural rights over institutional authority.

Dilution Of Safeguards Through Rk Arora’s Judgement

The legal landscape, however, has again witnessed a transformation with the judgement delivered on 15th December 2023, through the case of Ram Kishan Arora vs. Union of India.

[Image Sources: Shutterstock]

RK Arora Judgement

In contrast to Pankaj Bansal, RK Arora asserted that the ED is simply required to inform the accused of the grounds orally at the time of arrest, with written reasons to be delivered within 24 hours. Furthermore, the bench stated that the finding in Pankaj Bansal would not be retrospective, protecting arrests made prior to its pronouncement from being judged invalid due to the lack of written justifications. Unless clearly indicated otherwise, judgements normally apply retrospectively. The usage of the term “henceforth” when coupled with the directive requiring the ED to provide written explanations could indicate a future application. However, RK Arora fails to mention that Pankaj Bansal found the petitioner’s arrest illegal because the grounds were not supplied in writing. This requirement would not have rendered the arrest illegal if it had been limited to prospective application.

Section 19 of the Prevention of Money Laundering Act (PMLA) outlines the procedure for ED arrests. According to this clause, ED officers have the authority to arrest a person if there are reasonable grounds to believe they are guilty of any offence under the PMLA. Importantly, these reasons must be documented in writing, and the arrested individual must be notified of the grounds for arrest.

Pankaj Bansal interpreted Section 19 in light of constitutional duties, emphasising the importance of informing the grounds of detention in writing. The prompt documentation of arrest grounds, as well as the provision of a copy to the accused, was seen as a critical precaution against arbitrary arrests. RK Arora’s relaxation of this immediacy by 24 hours, on the other hand, raises questions about the possibility of after-thought and post-facto arguments.

Conclusion

The RK Arora judgement provides more nuance and context to the seemingly ever-evolving legal landscape when it comes to the arrest protocol of the Enforcement Directorate. Previously, several judgements such as the Vijay Mandal and Pankaj Bansal judgements have attempted to clarify the judicial stance regarding the communication of grounds of arrest to the arrested persons, and although there have been some slight discrepancies between the two judgements, they have an overlapping primary message, which is that the accused must be informed of the reasons for their detention. The Pnakaj Bansal judgement just went a step further and made it a requirement for the communication to be made in writing.

The recent RK Arora judgement, the latest addition to this legal landscape, seems to have somewhat weakened the safeguards that were introduced by the Pankaj Bansal decision. Overall, these verdicts collectively seek to balance the powers of law enforcement with the personal interests of citizens and the protection of their rights.

Author: Arushi Tripathi, in case of any queries please contact/write back to us via email chhavi@khuranaandkhurana.com or at Khurana & Khurana, Advocates and IP Attorney.

References

Kalra, K. (no date) Pankaj Bansal Verdict: A valuable step towards making basic procedural rights applicable to EdKartik, The Wire. Available at: https://thewire.in/law/pankaj-bansal-verdict-valuable-step-basic-procedural-rights-applicable-ed (Accessed: 22 December 2023).

Patel, A. (2022) Why does Ed have so much power?, Rediff. Available at: https://www.rediff.com/news/column/aakar-patel-why-does-ed-have-so-much-power/20220804.htm (Accessed: 22 December 2023).

Sebastian, M. (2023) A Critique of Supreme Court’s ‘RK arora’ judgment giving Ed 24 Hours to furnish written reasons for arrest, Live Law. Available at: https://www.livelaw.in/articles/a-critique-of-supreme-courts-rk-arora-judgment-giving-ed-24-hours-to-furnish-written-reasons-for-arrest-244887?infinitescroll=1 (Accessed: 22 December 2023).

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