Mere Non-Cooperation To ED Summons Not A Ground For Arrest Under PMLA; ED Can't Expect Admission Of Guilt From Person Summoned : Supreme Court

In a significant judgment, the Supreme Court has ruled that a person cannot be arrested by the Directorate of Enforcement for mere non-cooperation in response to a summons issued under Section 50 of the Prevention of Money Laundering Act 2002.

"Mere non-cooperation of a witness in response to the summons issued under Section 50 of the Act of 2002 would not be enough to render him/her liable to be arrested under Section 19", held a bench comprising Justices AS Bopanna and PV Sanjay Kumar.

The Court held so while declaring the arrests of Pankaj Bansal and Basant Bansal in the money laundering case against the real estate group M3M as illegal. The Court said that the failure of the accused to respond to the questions put to them by the ED would not be sufficient in itself for the Investigating Officer to opine that they were liable to be arrested under Section 19. Because, as per the mandate of Section 19, someone can be arrested only if the officer has reasons to believe that the person is guilty of offences under the PMLA.

Here, the ED said that the responses given by the accused were "evasive" in nature. Refusing to accept this reason, the Court pointed out, "In any event, it is not open to the ED to expect an admission of guilt from the person summoned for interrogation and assert that anything short of such admission would be an 'evasive reply".

Referring to Santosh S/o Dwarkadas Fafat vs. State of Maharashtra, the Court stated that custodial interrogation is not for the purpose of 'confession' as the right against self-incrimination is provided by Article 20(3) of the Constitution. In Santhosh, it was held that merely because an accused did not confess, it cannot be said that he was not co-operating with the investigation. 

Another significant takeaway from the judgment is its categorical ruling that the ED must inform the grounds of the arrest to the accused in writing to the accused.

For more reading - ED Can't Be Vindictive, Grounds Of Arrest Must Be Furnished In Writing To Accused At The Time Of Arrest : Supreme Court

Other reports about the judgment can be read here

Case Title : Pankaj Bansal v. Union of India SLP(Crl) No. 9220-9221/2023, Basant Bansal v. Union of India SLP(Crl) No. 9275-9276/2023

Citation : 2023 LiveLaw (SC) 844; 2023INSC866

Click here to read the judgment