In CRIMINAL APPEAL NO. 3865 OF 2023-SC- Informing the person arrested about grounds of his arrest & furnishing written communication within 24 hours is sufficient compliance of Sec 19 of PMLA & Article 22(1) of Constitution: SC dismisses Supertech founder RK Arora’s appeal
Justices Bela M. Trivedi & Satish Chandra Sharma [15-12-2023]

Read Order: RAM KISHOR ARORA v. DIRECTORATE OF ENFORCEMENT

Tulip Kanth

New Delhi, December 19, 2023: Dismissing Supertech founder Ram Kishor Arora’s appeal challenging the rejection of his bail plea, the Supreme Court has opined that his arrest could not be said to be violative of section 19 of PMLA or Article 22(1) of the Constitution of India as he was indisputably informed about the grounds of arrest and he had also put his signature and endorsement on the document of having been informed.

The appellant challenged the judgment passed by the High Court of Delhi dismissing the petition seeking declaration that the arrest of the appellant by the respondent Directorate of Enforcement (ED) was illegal and violative of the fundamental rights guaranteed to the appellant under Articles 14, 20 and 21 of the Constitution of India, and seeking direction to release the appellant forthwith.

The main issue before the Division Bench, comprising of Justice Bela M. Trivedi and Justice Satish Chandra Sharma, was whether the action of the respondent ED in handing over the document containing the grounds of the arrest to arrestee and taking it back after obtaining the endorsement and his signature thereon, as a token of he having read the same, and in not furnishing a copy thereof to the arrestee at the time of arrest would render the arrest illegal under Section 19 of the Prevention of Money Laundering Act, 2002 (PMLA).

The facts of this case indicated that the appellant, founder of M/s Supertech Limited, a real estate company which along with its group companies had undertaken various projects in Delhi NCR and at other places in Uttar Pradesh during the period 1988-2015. Due to various reasons, 26 FIRs came to be registered against the appellant in various jurisdictions.

On 09.09.2021, the respondent ED registered an ECIR against M/s Supertech Ltd. and others and started investigation under the PMLA. The appellant was also summoned under Section 50 of PMLA. The Adjudicating Authority issued a notice to the appellant under Section 8(1) calling upon the appellant to show cause as to why the properties provisionally attached should not be confirmed as the properties involved in money laundering.

It was the appellant’s case that before he could reply to the said show cause notice, on 27.06.2023 he was arrested by the respondent ED without serving to the appellant the ground of arrest. The Special Court remanded the appellant to the ED custody and thereafter the appellant was sent to judicial custody for 14 days. The appellant had filed a bail application before the Special Court, the same came to be dismissed. Thereafter, the appellant filed the writ petition which came to be dismissed by the High Court.

On the issue of the validity of the various provisions including Section 19 of the PMLA, the Bench referred to Vijay Madanlal Choudhary and Others vs. Union of India and Others in which the Bench while upholding the validity of Section 19 of the PMLA held that the said provision has reasonable nexus with the purposes and objects sought to be achieved by the PMLA.

Section 19 deals with Power of arrest. It says that the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession, reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

The Bench opined that the expression ‘as soon as may be’ contained in Section 19 is required to be construed as early as possible without avoidable delay or within reasonably convenient or reasonably requisite period of time.

The Bench observed that the person asserted, if he is informed or made aware orally about the grounds of arrest at the time of his arrest and is furnished a written communication about the grounds of arrest as soon as may be i.e as early as possible and within reasonably convenient and requisite time of twenty-four hours of his arrest, that would be sufficient compliance of not only Section 19 of PMLA but also of Article 22(1) of the Constitution of India. Plaicng reliance upon Vijay Madanlal Case (supra), the Bench held that the action of informing the person arrested about the grounds of his arrest is a sufficient compliance of Section 19 of PMLA as also Article 22(1) of the Constitution of India.

The Bench noted that the appellant was handed over the document containing grounds of arrest when he was arrested, and he also put his signature below the said grounds of arrest, after making an endorsement that he had been informed and had also read the above-mentioned grounds of arrest.

The appellant in the rejoinder filed by him has neither disputed the said endorsement nor his signature below the said endorsement. The only contention raised by the appellant’s Counsel was that he was not furnished a copy of the document containing the grounds of arrest at the time of arrest.

Considering the fact that the appellant was indisputably informed about the grounds of arrest and he having also put his signature and the endorsement on the said document of having been informed, the Bench held that there was due compliance of the provisions contained in Section 19 of PMLA and his arrest could neither be said to be violative of the said provision nor of Article 22(1) of the Constitution of India.

Thus, the Bench dismissed the appeal.