Pankaj Bansal v. Union of India: written grounds of arrest under Section 19 PMLA

The Supreme Court's judgment of 3 October 2023 in Pankaj Bansal v. Union of India — 2023 INSC 866, reported as (2024) 7 SCC 576 — is the decision that fixed, once and for all, how the Enforcement Directorate must communicate the grounds of arrest to a person it arrests under the Prevention of Money Laundering Act, 2002. The answer is: in writing. A Bench of Justices A.S. Bopanna and Sanjay Kumar held that a copy of the written grounds of arrest must be handed to the arrestee, and that the ED's prevailing practice of reading the grounds out — or letting the arrestee read and sign them — would no longer do.

The ruling is the PMLA source of the written-grounds rule that the Court would later extend, in Prabir Purkayastha v. State (NCT of Delhi) (2024), to the UAPA and to arrests generally. It is worth reading Pankaj Bansal on its own terms, because its reasoning is tethered to the specific architecture of the PMLA — Section 19 read with Section 45 and Section 50, and Article 22(1) of the Constitution — and because the Court's censure of the ED went well beyond the mode of communication.

The facts: the M3M–IREO matter

The appellants were Pankaj Bansal and his father, Basant Bansal, directors of the M3M real-estate group. The money-laundering investigation traced back to alleged offences by the IREO group in connection with residential projects in Haryana, out of which a number of FIRs had been registered by aggrieved allottees. The ED recorded a first ECIR in that matter. The Bansals were not named in it; Pankaj Bansal had not even been summoned.

On 9 June 2023, the Delhi High Court granted the appellants interim protection by way of anticipatory bail in relation to that first ECIR, subject to conditions, until the next date of hearing. What followed is the sequence the Supreme Court found troubling. The ED then recorded a second ECIR, on the basis of a separate FIR, and summoned the appellants to its office. There, on 14 June 2023, Basant Bansal was arrested at 6:00 p.m. and Pankaj Bansal at 10:30 p.m. the same day — the anticipatory-bail protection they had just obtained in the first matter thereby rendered academic. The Punjab and Haryana High Court declined to interfere with the arrests and remand. The appellants came to the Supreme Court.

What the ED had actually done

On the record, the grounds of arrest had been read out to Basant Bansal, who refused to sign them; they were then read over and explained to him in Hindi in the presence of witnesses, who signed. The appellants disputed even that account. Critically, no copy of the written grounds was furnished to either appellant at the time of arrest. The grounds, as set out in the remand application, reached the appellants' advocate only after the remand order had been passed.

The ED defended the practice by pointing to the text of Section 19, which speaks of the arrested person being "informed of the grounds of such arrest" and does not, in terms, require the grounds to be communicated in writing. For that reading it relied on a Division Bench of the Delhi High Court in Moin Akhtar Qureshi v. Union of India and a Division Bench of the Bombay High Court in Chhagan Chandrakant Bhujbal v. Union of India, both of which had held that Section 19(1) obliges the officer only to inform, not to serve, the grounds.

Why "informed" must mean "in writing"

The Court rejected that reading at the level of constitutional purpose. Article 22(1) guarantees that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds for the arrest. The mode of conveying that information, the Court held, must be meaningful enough to serve the purpose the right exists to protect.

The Court also flagged the evidentiary trap in oral communication: where grounds are merely read out or read by the arrestee "with nothing further," and the fact is later disputed, the dispute becomes the officer's word against the arrestee's, with no document to resolve it. A furnished copy removes that uncertainty. Having reasoned to that conclusion, the Court stated the rule:

In the same breath, the Court disposed of the authorities the ED had relied on: the decisions in Moin Akhtar Qureshi and Chhagan Chandrakant Bhujbal, "which hold to the contrary, do not lay down the correct law." The contrary High Court line was, in substance, set aside.

Vitiation of the arrest and remand

The consequence was not cosmetic. Because reading the grounds out was "not found to be adequate to fulfil compliance with the mandate of Article 22(1) of the Constitution and Section 19(1)," the arrest itself did not conform to Section 19(1) — and the remand that rested on it fell with it. The Court set aside the arrests, the consequent remand, and the impugned orders. A defect of this kind, the Court made clear, goes to the legality of the detention, not merely to the paperwork; the remanding court has a "foremost duty" to verify that the arrest is valid and lawful before ordering custody.

The censure of the ED's conduct

Pankaj Bansal is remembered for the written-grounds rule, but the judgment's sharpest passages are about how the ED behaved. Recording a second ECIR immediately after the appellants had secured interim protection in the first — and arresting them within hours of summoning them — struck the Court as an attempt to defeat the anticipatory-bail order through the back door. That, the Court held, "reeks of arbitrary exercise of power." The Bench set a standard for the agency in plain terms: "every action of the ED in the course of such exercise is expected to be transparent, above board and conforming to pristine standards of fair play in action," and the ED "is not expected to be vindictive in its conduct." Mere non-cooperation of a summoned person, the Court added, is not a ground to arrest.

Where it sits in the PMLA arrest–bail line

Pankaj Bansal is best read alongside the cases that surround it. It builds on Vijay Madanlal Choudhary v. Union of India (2022), which had upheld the Section 19 arrest architecture and Section 50 while recognising that the "reasons to believe" must be recorded. It supplies the procedural discipline that the bail cases — Prem Prakash, Hemant Soren — assume when they measure the ED's case against the Section 45 twin conditions. And it is the direct ancestor of Prabir Purkayastha v. State (NCT of Delhi) (2024), where the Court held the written-grounds requirement to flow from Article 22(1) itself and applied it to the UAPA — answering a High Court that had tried to confine Pankaj Bansal to the PMLA.

One sequel should be noted to avoid conflation. In Ram Kishor Arora v. Directorate of Enforcement (2023 INSC 1082), decided weeks later, the Court clarified that the written grounds may be furnished within twenty-four hours of arrest, and that Pankaj Bansal operates prospectively — it does not retrospectively invalidate arrests that pre-dated it. Ram Kishor Arora refines the timing and reach of the rule; it does not disturb the core holding that written grounds must be furnished.

What practitioners take from it

For the defence, Pankaj Bansal is a first-order checkpoint in any PMLA arrest: was a copy of the written grounds furnished at the time of arrest? If not, the arrest and remand are open to challenge as non-compliant with Section 19(1) and Article 22(1). For the ED, the judgment made a settled part of its practice mandatory nationwide and put its conduct — the timing of ECIRs, the treatment of summoned persons, the defeat of bail protections — under a fairness standard the Court is willing to enforce.

Related on Valkya

• Ram Kishor Arora v. Directorate of Enforcement: the 24-hour window for written grounds
• Prabir Purkayastha v. State (NCT of Delhi): grounds of arrest in writing
• Vijay Madanlal Choudhary v. Union of India: the PMLA architectural ruling
• Prem Prakash v. Directorate of Enforcement: bail is the rule under the PMLA
• Vihaan Kumar v. State of Haryana: grounds of arrest under Article 22(1)

Sources

1. Supreme Court of India — Pankaj Bansal v. Union of India & Ors., 2023 INSC 866 / 2023 LiveLaw (SC) 844, judgment dated 3 October 2023 (Criminal Appeal Nos. 3051-3052 of 2023): https://www.livelaw.in/pdf_upload/844-pankaj-bansal-v-union-of-india-3-oct-2023-503298.pdf
2. LiveLaw — "ED Needn't Give Reasons In Writing To Accused At Time Of Arrest, Can Give Within 24 Hrs; 'Pankaj Bansal' Doesn't Apply Retrospectively: Supreme Court": https://www.livelaw.in/supreme-court/ed-can-give-reasons-in-writing-to-accused-within-24-hrs-of-arrest-pankaj-bansal-judgment-doesnt-apply-retrospectively-supreme-court-244662
3. Bar & Bench — "Supreme Court grants bail to M3M directors Basant and Pankaj Bansal in money laundering case": https://www.barandbench.com/news/supreme-court-grants-bail-m3m-directors-basant-pankaj-bansal-money-laundering-case
4. Verdictum — "Clandestine Conduct Of ED Reeks Of Arbitrary Exercise Of Power: Supreme Court While Granting Bail To M3M Group Owners In PMLA Case": https://www.verdictum.in/court-updates/supreme-court/enforcement-directorate-money-laundering-m3m-group-owners-in-pmla-case-1497807
5. p39a Criminal Law Blog — "Clarity in the Shadows: Decoding Supreme Court's PMLA Verdict in Pankaj Bansal v. Union of India": https://p39ablog.com/2024/04/clarity-in-the-shadows-decoding-supreme-courts-pmla-verdict-in-pankaj-bansal-v-union-of-india/