Supreme Court Dismisses ED's Plea Against HC Quashing Arrest Of Former Congress MLA Surender Panwar

The Supreme Court on Thursday (January 2) dismissed a Special Leave Petition (SLP) filed by the Directorate of Enforcement (ED) challenging the Punjab and Haryana High Court's decision to quash the arrest of former Congress MLA Surender Panwar in a money laundering case pertaining to alleged illegal mining and fabrication of e-rawana bills.

A bench of Justice Abhay S. Oka and Justice Augustine George Masih clarified that the findings of the High Court were rendered solely to address the issue of the legality of the arrest and would not affect the merits of the ongoing complaint under Section 44 of the Prevention of Money Laundering Act, 2002 (PMLA).

The High Court had also directed the ED to take remedial measures to prevent undue harassment during investigations. It recommended adopting reasonable time limits for interrogation sessions and ensuring compliance with human rights standards laid down by the United Nations.

The Supreme Court held –

“In the facts of the case peculiar to the respondent, we are not inclined to interfere with the finding of the High Court that the arrest of the respondent was illegal. The findings which are rendered by the High Court are only for the purposes of deciding the issue whether the arrest of the respondent was illegal. These findings will not effect the merits of the pending complaint under Section 44 of the Prevention of Money Laundering Act (PMLA), 2002. Subject to what is observed above, the Special Leave Petition is dismissed.”

Background

On September 23, 2023, the Punjab and Haryana High Court declared Panwar's arrest by the ED as illegal, citing prolonged interrogation and lack of sufficient material linking him to the alleged offences. Panwar, the Congress candidate for the Haryana Assembly elections, was interrogated for 14 hours and 40 minutes on July 19, 2023, in connection with an Enforcement Case Information Report (ECIR) registered based on eight FIRs alleging fraud.

Justice Mahabir Singh Sindhu, while setting aside the arrest, highlighted concerns about the duration of interrogation, stating that such prolonged questioning violated the dignity of the individual and contravened Article 21 of the Constitution, which guarantees the right to life and liberty. The Court urged the ED to establish mechanisms for fair investigations aligned with basic human rights principles.

The High Court noted that Panwar was neither named in the initial eight FIRs nor the subsequent ninth FIR. It observed that the ED's claim of Panwar being the director of a company implicated in illegal mining was unsupported. Information from the Ministry of Corporate Affairs revealed that Panwar had ceased to be a director of the company in question as of November 7, 2013.

The Court noted that “illegal mining,” the foundation of the allegations, was not a scheduled offence under the PMLA. Further, offences under the Environment Protection Act, 1986, cited by the ED, were removed from the list of scheduled offences under the PMLA by an amendment in 2023.

The Court observed that, as on date, no prima facie material existed to substantiate Panwar's alleged involvement in activities connected with proceeds of crime. The High Court emphasized that an initial illegality in the arrest could not be cured by subsequent judicial orders.

Case no. – Petition for Special Leave to Appeal (Crl.) No. 17790/2024

Case Title – Directorate of Enforcement v. Surender Panwar