'Act in non-vindictive manner': Supreme Court indicts ED

Satya Prakash

New Delhi, October 4

Indicting the Enforcement Directorate (ED) for arbitrary exercise of powers conferred on it under the Prevention of Money Laundering Act (PMLA), 2002, the Supreme Court has said that the probe agency must act in a transparent and non-vindictive manner, conforming to pristine standards of fair play.

What the Bench said

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• It is necessary for the probe agency to furnish a copy of the grounds of arrest to the arrested person
• It should be done “as a matter of course & without exception” as it’s a constitutional requirement under Article 22(1)

A Bench of Justice AS Bopanna and Justice Sanjay Kumar – which had on Tuesday set aside the arrest of Gurugram-based realty group M3M’s directors Basant Bansal and Pankaj Bansal in a money laundering case – said, “The clandestine conduct of the ED in proceeding against the appellants (Bansals) by recording the second enforcement case information report (ECIR) immediately after they secured interim protection in relation to the first ECIR does not commend acceptance as it reeks of arbitrary exercise of power.”

It’s necessary for the probe agency to furnish a copy of the grounds of arrest to the arrested person “as a matter of course and without exception”, it said, adding that it was a constitutional requirement under Article 22(1).

However, it said, “In case any such sensitive material finds mention in such grounds of arrest recorded by the authorised officer, it would always be open to him to redact such sensitive portions in the document and furnish the edited copy of the grounds of arrest to the arrested person, so as to safeguard the sanctity of the investigation.” It said, “Being a premier investigating agency, charged with the onerous responsibility of curbing the 19 debilitating economic offences of money laundering in our country, 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.”

After examining the events leading to the arrest of the accused duo, the Bench said, “The way in which the ED recorded the second ECIR immediately after the appellants secured anticipatory bail in relation to the first ECIR, though the foundational FIR dated back to April 17, 2023, and then went about summoning them on one pretext and arresting them on another, within a short span of 24 hours or so, manifests complete and utter lack of bona fides.”

It said, “This chronology of events speaks volumes and reflects rather poorly, if not negatively, on the ED’s style of functioning.”

Writing the judgment for the Bench, Justice Kumar said, “The ED, mantled with far-reaching powers under the stringent Act of 2002, is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness.”

Indicting the probe agency for suppression of certain facts before the Delhi High Court, the top court said it demonstrated “complete lack of probity on the part of the ED.” It said, “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 (of the PMLA).”