Delhi Liquor Scam Case Accused Moves Supreme Court Challenging ED Arrest, Relies On 'Pankaj Bansal' Judgment

The Supreme Court, (on November 10), issued notice in the SLP filed by Hyderabad-based businessman Abhishek Boinpally who is facing charges of money laundering in connection with the Delhi excise policy scam. The present SLP is against the Delhi High Court’s Judgment wherein it dismissed a writ petition filed by Boinpally, challenging legality of his arrest by the Enforcement Directorate (ED).

The matter was placed before Justices Sanjiv Khanna and SVN Bhatti.

It may also be noted that on August 12, 2023, the same bench issued notice in Boinpally’s bail plea. Now, both the petitions are listed on November 20. Boinpally is embroiled in cases registered with both the Enforcement Directorate and the Central Bureau of Investigation (CBI).

In the present case, Special Judge (CBI) on an application dated October 29, 2022, moved by the ED ,granted permission to interrogate and record petitioner’s statement under Prevention of Money Laundering Act (PMLA). This permission was granted as petitioner was already custody in predicate offence. Consequently, the petitioner was arrested by the ED.

Before the High Court, the arrest was assailed on the ground of non-compliance of Section 19 (Power to arrest) of PMLA. It was argued that not adhering to the said provision would render the arrest and subsequent proceedings to be illegal. Apart from this, it was also contended that the arrest was affected mechanically as the arrest order had the name of Vijay Nair and it was struck of, and name of the petitioner was written in hand.

However, the High Court refused to accept these arguments. It noted that mentioning of another name was a clerical error and moreover, the petitioner has agreed that he has been informed of the grounds of arrest which runs into 14 pages.

“It has been noted that on each of the page there are the complete signatures of the petitioner alongwith the date. The petitioner has specifically written in his own handwriting that “I have read 14 pages of the ground of my arrest and I am informed of the same”. I consider that there is a force in the contention of the learned counsel for the ED that the mention of Vijay Nair’s name was a clerical error which was corrected by the IO by appending his signature.”

Today, when the matter came before the Court, Senior Advocate Mukul Rohatgi heavily relied upon the case of Pankaj Bansal v. Union of India to contend that grounds of arrest were not serve. Pertinently, in this case, the Supreme Court has recently held that the ED must furnish the reasons of arrest to the accused in writing.

Apart from this, Rohatgi also rested his contentions upon Section 19 of the PMLA, that gives the power to officers of ED to arrest any person guilty of a money laundering offence.

Senior Counsel contended: “Law has been settled. You have to physically serve the grounds of arrest.”

Justice Khanna: “They have served but their name was different.”

Rohatgi: “They said that you read it and give it back.” Thereafter, Rohatgi stressed upon the violation of Section 19 of PMLA.

Justice Khanna: If I am not mistaken, he was certainly given the grounds, the name mentioned was wrong.  

Rohatgi argued that his client received the copy of the arrest memo. “The ground of arrest are 14 pages, I was never given.”

Justice Khanna: “Where did you raise this plea before the High Court.?” Justice Khanna further says that as per his understanding, what has been stated in the impugned judgment is that the grounds were given but the name mentioned was wrong.  

Rohatgi protested: “That is one point. I don’t have the grounds. The law is now settled in Pankaj Bansal”

Justice Khanna: In Pankaj Bansal, the grounds were not at all given. Is that correct?  

Rohatgi: Bansal records that they follow different practices in different parts of the country...The Court has recorded that you must have a uniform practice following the law.  

Justice Khanna: “If I am not mistaken Bansal goes primarily on Article 20 (of the Indian Constitution) that persons must know the reasons of his arrest.”

Rohatgi at this juncture read Section 19 (2) of the PMLA: “The Director, Deputy Director, Assistant Director or any other officer shall, immediately after arrest of such person under sub-section (1), forward a copy of the order along with the material in his possession, referred to in that sub-section, to the Adjudicating Authority in a sealed envelope, in the manner, as may be prescribed and such Adjudicating Authority shall keep such order and material for such period, as may be prescribed.”

Following this, he promptly said that: Now there are rules that are framed for this ‘forwarding’. Forwarding says that the grounds of arrest which have been recorded shall be forwarded to that person.  

Subsequently, he read the relevant paras of Bansal. These included:

“In this regard, we may note that Article 22(1) of the Constitution provides, inter alia, 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 being the fundamental right guaranteed to the arrested person, the mode of conveying information of the grounds of arrest must necessarily be meaningful so as to serve the intended purpose.”

Justice Khanna inquired: Where is the direction that it must be in writing?

To this, he tries convincing the Bench after referring to several relevant bits including: “That being so, there is no valid reason as to why a copy of such written grounds of arrest should not be furnished to the arrested person as a matter of course and without exception. There are two primary reasons as to why this would be the advisable course of action to be followed as a matter of principle…… Non-compliance in this regard would entail release of the arrested person straightaway, as held in V. Senthil Balaji (supra)”

Rohatgi specifically stressed on the last bit.  

Case Title: Abhishek Boinpally v. Directorate of Enforcement., Diary No.- 44355 - 2023