RAM KISHOR ARORAversusDIRECTORATE OF ENFORCEMENT

                 [2023] 16 S.C.R. 743 : 2023 INSC 1082



                             CASE DETAILS

                         RAM KISHOR ARORA
                                       v.
                 DIRECTORATE OF ENFORCEMENT
                    (Criminal Appeal No. 3865 of 2023)
                           DECEMBER 15, 2023
 [BELA M. TRIVEDI AND SATISH CHANDRA SHARMA, JJ.]
                               HEADNOTES
      Issue for consideration: 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 u/s. 19 of
the Prevention of Money Laundering Act, 2002.
     Prevention of Money Laundering Act, 2002 – High Court
dismissed the petition seeking declaration that the arrest of the appellant
on 27.06.2023 by the respondent Directorate of Enforcement was illegal
and violative of the fundamental rights guaranteed to the appellant u/
Arts. 14, 20 and 21 of the Constitution of India.
      Held: In the instant case, it is not disputed 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 was informed and had the 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 was that he was not furnished a copy of the document
containing the grounds of arrest at the time of arrest – Since 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, 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 Art. 22(1) of the Constitution of India. [Para 24]
                                      743
744          SUPREME COURT REPORTS                        [2023] 16 S.C.R.


     Prevention of Money Laundering Act, 2002 – s. 19 – Informing
and furnishing of grounds of arrest:
      Held: In opinion of this Court 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. [Para 22]
    Prevention of Money Laundering Act, 2002 – Pankaj Bansal vs.
Union of India and Others, (2023) SCC Online SC 1244 – The judgment
cannot be given retrospective effect.
       LIST OF CITATIONS AND OTHER REFERENCES
      Union of India and Another vs. Raghubir Singh (Dead) by LRs. Etc.,
[1989] 3 SCR 316 : (1989) 2 SCC 754; Chandra Prakash and Others vs.
State of U.P. and Another, [2002] 2 SCR 913 : (2002) 4 SCC 234; Abdul
Jabar Butt and Another vs. State of Jammu & Kashmir, [1957] SCR 51 :
AIR 1957 SC 281 – followed.
      Vijay Madanlal Choudhary and Others vs. Union of India and Others,
(2022) SCC Online SC 929; Sundeep Kumar Bafna vs. State of Maharashtra
and Another, [2014] 4 SCR 486 : (2014) 16 SCC 623; Durga Pada Ghosh
vs. State of West Bengal, (1972) 2 SCC 656 – relied on.
      Pankaj Bansal vs. Union of India and Others, (2023) SCC Online
SC 1244; V. Senthil Balaji Vs. State represented by Deputy Director and
Others, (2023) SCC Online SC 934; Assistant Commissioner, Income Tax,
Rajkot vs. Saurashtra Kutch Stock Exchange Limited, [2008] 13 SCR 421
: (2008) 14 SCC 171 – referred to.
       OTHER CASE DETAILS INCLUDING IMPUGNED
              ORDER AND APPEARANCES
    CRIMINAL APPELLATE JURISDICTION : Criminal Appeal
No.3865 of 2023.
     From the Judgment and Order dated 22.09.2023 of the High Court of
Delhi at New Delhi in WPCRL No.2408 of 2023.
          RAM KISHOR ARORA v. DIRECTORATE OF                               745
                    ENFORCEMENT

     Appearances:
     Dr. Abhishek Manu Singhvi, Vikas Pahwa, Sr. Advs., R.K. Handoo,
Yoginder Handoo, Siddharth Bhatli, Aditya Chaudhary, Ashwin Kataria,
Nishaank Mattoo, Garvit Solanki, Abhishek Pati, Hirday Virdi, Siddharth
Singh, Yatin Dev, Ms. Lashita Dhingra, Ms. Khyati Jain, Ms. Medha Gaur,
Advs. for the Appellant.
     S.V. Raju, A.S.G., Zoheb Hussain, Nachiketa Joshi, Annam Venkatsh,
Chitvan Singhal, Vivek Gurnani, Ms. Manisha Dubey, Gaurav Saini, Mukesh
Kumar Maroria, Advs. for the Respondent.
       JUDGMENT / ORDER OF THE SUPREME COURT

                               JUDGMENT

     BELA M. TRIVEDI, J.
     1. Leave granted.
      2. The present appeal is directed against the judgment and order
dated 22.09.2023 passed by the High Court of Delhi at New Delhi, in Writ
Petition (Crl.) No. 2408/2023, whereby the High Court has dismissed the
said petition seeking declaration that the arrest of the appellant on 27.06.2023
by the respondent Directorate of Enforcement (hereinafter referred to as
the 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 appellant had also
sought direction to quash the order of remand dated 28.06.2023 passed by
the ASJ/05, PMLA, Patiala House Courts, New Delhi (hereinafter referred
to as the “Special Court”), in ECIR No. STF/21/2021.
      3. Dehors the facts, a neat question of law that has been raised before
this Court is, 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 (hereinafter referred to as
PMLA)?
746           SUPREME COURT REPORTS                       [2023] 16 S.C.R.


      FACTUAL MATRIX: -
     4. The bare minimum facts required to decide the above questions of
law are as follows: -
      (i)   The appellant was the 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.
      (ii) Due to various reasons, 26 FIRs came to be registered against
           the appellant in various jurisdictions.
      (iii) On 09.09.2021, the respondent ED registered an ECIR bearing
            no. ECIR/21/STF/2021 against M/s Supertech Ltd. and others
            and started investigation under the PMLA. The appellant was also
            summoned under Section 50 of PMLA on various dates during
            which his statements were also recorded.
      (iv) During March 2022, some insolvency proceedings came to be
           filed against the company M/s Supertech Ltd. before the NCLT,
           which passed some interlocutory orders. The matter was also
           taken up by the appellant before the NCLAT with settlement
           proposal, however during the pendency of the insolvency
           proceedings, the respondent ED passed a provisional attachment
           order on 11.04.2023, provisionally attaching certain personal
           properties of the appellant and filed an original complaint
           (OC No. 1974/2023) on 04.05.2023, before the Adjudicating
           Authority, PMLA, seeking confirmation of the provisional
           attachment order in terms of Section 8 of PMLA.
      (v)   On 12.05.2023, the Adjudicating Authority, PMLA, issued a
            notice to the appellant under Section 8(1) of the PMLA 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.
      (vi) According to the appellant, 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.
           RAM KISHOR ARORA v. DIRECTORATE OF                            747
             ENFORCEMENT [BELA M. TRIVEDI, J.]

     (vii) On 28.06.2023, the appellant was produced before the Special
           Court, New Delhi, where the ED sought remand. The Special
           Court remanded the appellant to the ED custody till 10.07.2023
           and thereafter the appellant was sent to judicial custody for 14
           days till 24.07.2023.
     (viii) The appellant had filed a bail application on 12.07.2023 before
            the Special Court, the same came to be dismissed by the Special
            Court on 22.07.2023. The appellant was sent to the judicial
            custody for further period of 14 days i.e till 07.08.2023, which
            subsequently came to be extended till 21.08.2023.
     (ix) The appellant filed a Writ Petition being no. W.P. (Crl.)
          No.336/2023 before this Court challenging the order dated
          22.07.2023 passed by the Special Court dismissing his bail
          application. The said writ petition came to be withdrawn by the
          appellant with liberty to approach the High Court.
     (x)   Thereafter, the appellant filed the writ petition being W.P. (Crl.)
           No. 2408/2023, which came to be dismissed by the High Court
           vide the impugned order dated 22.09.2023.
     5. The respondent ED has filed an affidavit to counter the allegations
made in the Appeal by the appellant, and asserted that the arrest was in
accordance with Section 19 of the PMLA. Paragraph 16 of the counter-
affidavit being relevant is reproduced herein below: -
     “16. The arrest was in accordance with Section 19 of PMLA in so far
     as the Grounds of Arrest in writing were handed over to the arrestee
     Ram Kishor Arora who after reading the same affixed his signature
     on each page of the Grounds of Arrest. Further, after going through
     the Grounds of Arrest the Arrestee Ram Kishor Arora on last page in
     his own handwriting wrote that –
     “I have been informed and have also read the above mention grounds
     of arrest”
     Therefore, the ratio of Pankaj Bansal judgement will not be applicable
     in the instant case.
748          SUPREME COURT REPORTS                        [2023] 16 S.C.R.


      A copy of Grounds of arrest is annexed herewith and marked as
      Annexure R-1.”
     6. The appellant without specifically denying the said assertion
made by the respondent ED in paragraph 16 of the counter-affidavit,
filed the response by filing an affidavit in rejoinder. The response of the
appellant in the rejoinder to paragraph 16 of the counter-affidavit reads
as under:-
      “i. It is respectfully submitted that the very fact that the respondent
      has now annexed the copy of the grounds of arrest establishes the
      fact that the petitioner was not served the copy of the grounds of
      arrest. Rather it is an admission on the part of the respondent that
      the copy of the grounds of arrest were not served on the petitioner.
      This Hon’ble Court in V. Senthil Balaji Vs State and Ors. 2023
      SCC OnLine SC 934 in Para 39 has held that the ground of arrest
      is to be “served” to the arrestee. The same was also reiterated and
      clarified by this Hon’ble Court in Pankaj Bansal Vs Union of India
      and Others, 2023 SCC OnLine SC 1244.
      ii. It is submitted that the compliance of serving the grounds of
      arrest must be at the time when the Petitioner’s arrest was made
      and not thereafter.
      iii. The non-service of grounds of arrest is an illegality and not an
      irregularity that can be regularized later. If the law requires that
      something be done in a particular manner, then it must be done in
      that manner, and if not done in that manner, then the same has no
      existence in the eye of law at all.
       iv. Mere perusal of grounds of arrest for getting it signed, without
      serving the same by providing a copy thereof at the time of arrest,
      does not meet the requirements in law and the arrest of the petitioner
      is thus illegal.”
      v. It is submitted that the filing the copy of the grounds of arrest
      at this stage (Annexure R-1 in counter affidavit, page no. 36), will
      not help Respondent to cure this illegality. This is an incurable
      illegality making the very arrest illegal.”
         RAM KISHOR ARORA v. DIRECTORATE OF                              749
           ENFORCEMENT [BELA M. TRIVEDI, J.]

     LEGAL PROVISION: -
      7. Since the entire controversy centres around the interpretation of
Section 19 of PMLA which deals with the Power of the ED to arrest, the
same is reproduced for ready reference.
     “19. Power to arrest.- (1) If 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.
     (2) 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.
     (3) Every person arrested under sub-section (1) shall, within twenty-
     four hours, be taken to a 1[Special Court or] Judicial Magistrate or
     a Metropolitan Magistrate, as the case may be, having jurisdiction:
     Provided that the period of twenty-four hours shall exclude the time
     necessary for the journey from the place of arrest to the 1[Special Court
     or] Magistrate’s Court.”
     SUBMISSIONS BY THE LEARNED COUNSELS: -
      8. The Learned Senior Counsel Mr. Abhishek Manu Singhvi placing
heavy reliance on the recent decision of this Court in Pankaj Bansal vs.
Union of India and Others1, submitted that mere informing the accused (the
appellant herein) orally about the grounds of arrest and making him read
the same and obtaining his signature thereon, and not furnishing in writing
the grounds of arrest to the accused has been held to be not in consonance


1   (2023) SCC Online SC 1244
750            SUPREME COURT REPORTS                      [2023] 16 S.C.R.


with the provisions contained in Section 19(1) of the PMLA. He further
submitted that taking note of the inconsistent practice being followed by the
officers of the respondent-ED, it has been directed that it would be necessary
henceforth that a copy of such written grounds of arrest is furnished to the
arrested person as a matter of course and without exception. According
to him, the said direction was the reiteration of the principle or doctrine
already existing and also stated in V. Senthil Balaji Vs. State represented
by Deputy Director and Others2 and therefore the said decision in Pankaj
Bansal case (supra) is required to be applied retrospectively though the
word ‘henceforth’ has been used. To buttress his submission, Mr. Singhvi
has relied upon the judgment in Assistant Commissioner, Income Tax,
Rajkot vs. Saurashtra Kutch Stock Exchange Limited3, in which it was
opined that a judicial decision acts retrospectively.
      9. Per contra, the learned ASG, Mr. S. V. Raju vehemently submitted
that the decision in case of Pankaj Bansal (supra) was per incuriam, as
the two-Judge Bench in the said case had deviated from the position of
law settled by the prior three-Judge Bench judgment in Vijay Madanlal
Choudhary and Others vs. Union of India and Others4 with respect to the
compliance of the provisions of Section 19 of PMLA. He also submitted
that a bench of two judges cannot overlook or ignore a binding precedent
of larger or even co-equal bench dealing with the issue, otherwise the two-
judge bench decision would fall in the category of per incuriam, in view of
the decision in case of Sundeep Kumar Bafna vs. State of Maharashtra
and Another5. He further submitted that at the most the direction contained
in paragraph 35 of the Pankaj Bansal case (supra) to furnish the grounds
of arrest in writing, would be applicable “henceforth” as mentioned therein,
meaning thereby it would have the prospective and not retrospective effect
as sought to be submitted on behalf of the appellant.
       ANALYSIS: -
     10. The validity of the various provisions including Section 19 of
the PMLA was examined by the Three-Judge Bench in Vijay Madanlal



2     (2023) SCC Online SC 934
3     (2008) 14 SCC 171
4     (2022) SCC Online SC 929
5     (2014) 16 SCC 623
         RAM KISHOR ARORA v. DIRECTORATE OF                               751
           ENFORCEMENT [BELA M. TRIVEDI, J.]

Choudhary case (supra) 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. The
relevant observations are reproduced herein below: -
     “324. ……..In other words, the role of the Authorities appointed under
     Chapter VIII of the 2002 Act is such that they are tasked with dual role
     of conducting inquiry and collect evidence to facilitate adjudication
     proceedings before the Adjudicating Authority in exercise of powers
     conferred upon them under Chapters III and V of the 2002 Act and also
     to use the same materials to bolster the allegation against the person
     concerned by way of a formal complaint to be filed for offence of
     money-laundering under the 2002 Act before the Special Court, if the
     fact situation so warrant. It is not as if after every inquiry prosecution
     is launched against all persons found to be involved in the commission
     of offence of money-laundering. It is also not unusual to provide for
     arrest of a person during such inquiry before filing of a complaint
     for indulging in alleged criminal activity. The respondent has rightly
     adverted to somewhat similar provisions in other legislations, such
     as Section 35 of FERA and Section 102 of Customs Act including
     the decisions of this Court upholding such power of arrest at the
     inquiry stage bestowed in the Authorities in the respective legislations.
     In Romesh Chandra Mehta532, the Constitution Bench of this Court
     enunciated that Section 104 of the Customs Act confers power to arrest
     upon the Custom Officer if he has reason to believe that any person in
     India or within the Indian Customs waters has been guilty of an offence
     punishable under Section 135 of that Act. Again, in the case of Padam
     Narain Aggarwal533, while dealing with the provisions of the Customs
     Act, it noted that the term “arrest” has neither been defined in the 1973
     Code nor in the Penal Code, 1860 nor in any other enactment dealing
     with offences. This word has been derived from the French word
     “arrater” meaning “to stop or stay”. It signifies a restraint of a person.
     It is, thus, obliging the person to be obedient to law. Further, arrest
     may be defined as “the execution of the command of a court of law
     or of a duly authorised officer”. Even, this decision recognises the
     power of the authorised officer to cause arrest during the inquiry
     to be conducted under the concerned legislations. While adverting
752          SUPREME COURT REPORTS                      [2023] 16 S.C.R.


      to the safeguards provided under that legislation before effecting
      such arrest, the Court noted as follows:
      “Safeguards against abuse of power
      36. From the above discussion, it is amply clear that power to
      arrest a person by a Customs Officer is statutory in character and
      cannot be interfered with. Such power of arrest can be exercised
      only in those cases where the Customs Officer has “reason to
      believe” that a person has been guilty of an offence punishable
      under Sections 132, 133, 135, 135-A or 136 of the Act. Thus, the
      power must be exercised on objective facts of commission of an
      offence enumerated and the Customs Officer has reason to believe
      that a person sought to be arrested has been guilty of commission of
      such offence. The power to arrest thus is circumscribed by objective
      considerations and cannot be exercised on whims, caprice or fancy
      of the officer.
      37. The section534 also obliges the Customs Officer to inform the
      person arrested of the grounds of arrest as soon as may be. The law
      requires such person to be produced before a Magistrate without
      unnecessary delay.
      38. The law thus, on the one hand, allows a Customs Officer to
      exercise power to arrest a person who has committed certain
      offences, and on the other hand, takes due care to ensure individual
      freedom and liberty by laying down norms and providing safeguards
      so that the power of arrest is not abused or misused by the
      authorities. ….”
                                                     (emphasis supplied)
      325. The safeguards provided in the 2002 Act and the preconditions
      to be fulfilled by the authorised officer before effecting arrest, as
      contained in Section 19 of the 2002 Act, are equally stringent and
      of higher standard. Those safeguards ensure that the authorised
      officers do not act arbitrarily, but make them accountable for their
      judgment about the necessity to arrest any person as being involved
      in the commission of offence of money-laundering even before filing
      of the complaint before the Special Court under Section 44(1)(b) of
          RAM KISHOR ARORA v. DIRECTORATE OF                               753
            ENFORCEMENT [BELA M. TRIVEDI, J.]

     the 2002 Act in that regard. If the action of the authorised officer
     is found to be vexatious, he can be proceeded with and inflicted
     with punishment specified under Section 62 of the 2002 Act…….
     326. Considering the above, we have no hesitation in upholding
     the validity of Section 19 of the 2002 Act. We reject the grounds
     pressed into service to declare Section 19 of the 2002 Act as
     unconstitutional. On the other hand, we hold that such a provision
     has reasonable nexus with the purposes and objects sought to be
     achieved by the 2002 Act of prevention of money-laundering and
     confiscation of proceeds of crime involved in money-laundering,
     including to prosecute persons involved in the process or activity
     connected with the proceeds of crime so as to ensure that the
     proceeds of crime are not dealt with in any manner which may
     result in frustrating any proceedings relating to confiscation
     thereof.”
      11. Further while dealing with the issue as to whether it was necessary
to furnish a copy of ECIR to the person concerned apprehending the arrest or
at least after his arrest, the Bench held in Vijay Madanlal (supra) as under: -
     “458. The next issue is: whether it is necessary to furnish copy of
     ECIR to the person concerned apprehending arrest or at least after his
     arrest? Section 19(1) of the 2002 Act postulates that after arrest, as
     soon as may be, the person should be informed about the grounds for
     such arrest. This stipulation is compliant with the mandate of Article
     22(1) of the Constitution. Being a special legislation and considering
     the complexity of the inquiry/investigation both for the purposes of
     initiating civil action as well as prosecution, non-supply of ECIR in
     a given case cannot be faulted. The ECIR may contain details of the
     material in possession of the Authority and recording satisfaction
     of reason to believe that the person is guilty of money-laundering
     offence, if revealed before the inquiry/investigation required to proceed
     against the property being proceeds of crime including to the person
     involved in the process or activity connected therewith, may have
     deleterious impact on the final outcome of the inquiry/investigation.
     So long as the person has been informed about grounds of his
     arrest that is sufficient compliance of mandate of Article 22(1)
754          SUPREME COURT REPORTS                         [2023] 16 S.C.R.


      of the Constitution. Moreover, the arrested person before being
      produced before the Special Court within twenty-four hours or for
      that purposes of remand on each occasion, the Court is free to look
      into the relevant records made available by the Authority about
      the involvement of the arrested person in the offence of money-
      laundering. In any case, upon filing of the complaint before the
      statutory period provided in 1973 Code, after arrest, the person
      would get all relevant materials forming part of the complaint filed
      by the Authority under Section 44(1)(b) of the 2002 Act before the
      Special Court.
      459. Viewed thus, supply of ECIR in every case to person concerned
      is not mandatory. From the submissions made across the Bar, it is
      noticed that in some cases ED has furnished copy of ECIR to the
      person before filing of the complaint. That does not mean that in every
      case same procedure must be followed. It is enough, if ED at the time
      of arrest, contemporaneously discloses the grounds of such arrest to
      such person. Suffice it to observe that ECIR cannot be equated with
      an FIR which is mandatorily required to be recorded and supplied to
      the accused as per the provisions of 1973 Code. Revealing a copy
      of an ECIR, if made mandatory, may defeat the purpose sought to
      be achieved by the 2002 Act including frustrating the attachment
      of property (proceeds of crime). Non-supply of ECIR, which is
      essentially an internal document of ED, cannot be cited as violation
      of constitutional right. Concededly, the person arrested, in terms
      of Section 19 of the 2002 Act, is contemporaneously made aware
      about the grounds of his arrest. This is compliant with the mandate
      of Article 22(1) of the Constitution. It is not unknown that at times
      FIR does not reveal all aspects of the offence in question. In several
      cases, even the names of persons actually involved in the commission
      of offence are not mentioned in the FIR and described as unknown
      accused. Even, the particulars as unfolded are not fully recorded in the
      FIR. Despite that, the accused named in any ordinary offence is able
      to apply for anticipatory bail or regular bail, in which proceeding, the
      police papers are normally perused by the concerned Court. On the
      same analogy, the argument of prejudice pressed into service by the
      petitioners for non-supply of ECIR deserves to be answered against
          RAM KISHOR ARORA v. DIRECTORATE OF                               755
            ENFORCEMENT [BELA M. TRIVEDI, J.]

     the petitioners. For, the arrested person for offence of money-
     laundering is contemporaneously informed about the grounds
     of his arrest; and when produced before the Special Court, it is
     open to the Special Court to call upon the representative of ED
     to produce relevant record concerning the case of the accused
     before him and look into the same for answering the need for his
     continued detention. Taking any view of the matter, therefore, the
     argument under consideration does not take the matter any further.”
      12. Since, much reliance has been placed on the decisions in case
of V. Senthil Balaji vs. State (supra) and in Pankaj Bansal vs. Union of
India (supra), the relevant part thereof also deserve to be reproduced. In V.
Senthil Balaji (supra), the two-Judge Bench while dealing with Section 19
of PMLA observed as under: -
     “39. To effect an arrest, an officer authorised has to assess and evaluate
     the materials in his possession. Through such materials, he is expected
     to form a reason to believe that a person has been guilty of an offence
     punishable under the PMLA, 2002. Thereafter, he is at liberty to arrest,
     while performing his mandatory duty of recording the reasons. The
     said exercise has to be followed by way of an information being
     served on the arrestee of the grounds of arrest. Any non-compliance
     of the mandate of Section 19(1) of the PMLA, 2002 would vitiate the
     very arrest itself. Under sub-section (2), the Authorised Officer shall
     immediately, after the arrest, forward a copy of the order as mandated
     under sub-section (1) together with the materials in his custody,
     forming the basis of his belief, to the Adjudicating Authority, in a sealed
     envelope. Needless to state, compliance of sub-section (2) is also a
     solemn function of the arresting authority which brooks no exception.”
      13. In Pankaj Bansal case (supra), the two-Judge Bench after analyzing
the provisions contained in Section 19(1) of PMLA observed as under:-
     “39. On the above analysis, to give true meaning and purpose to the
     constitutional and the statutory mandate of Section 19(1) of the Act
     of 2002 of informing the arrested person of the grounds of arrest, we
     hold that it would be necessary, henceforth, that a copy of such
     written grounds of arrest is furnished to the arrested person as a
     matter of course and without exception. The decisions of the Delhi
756            SUPREME COURT REPORTS                          [2023] 16 S.C.R.


       High Court in Moin Akhtar Qureshi (supra) and the Bombay High
       Court in Chhagan Chandrakant Bhujbal (supra), which hold to the
       contrary, do not lay down the correct law.…”
       14. It hardly needs to be emphasized that as well settled, it is in order
to guard against the possibility of inconsistent decisions on the points of law
by different Division Benches that the Rule of precedent has been evolved.
It is in order to promote the consistency and certainty in the development
of law and its contemporary status that the statement of law by a Division
Bench is considered binding on a Division Bench of the same or lesser
number of Judges. In this regard, we may refer to the pronouncement of the
Constitution Bench judgment in Union of India and Another vs. Raghubir
Singh (Dead) by LRs. Etc.6
       “7. ……..The position is substantially different under a written
       Constitution such as the one which governs us. The Constitution of
       India, which represents the Supreme Law of the land, envisages three
       distinct organs of the State, each with its own distinctive functions, each
       a pillar of the State. Broadly, while Parliament and the State Legislature
       in India enact the law and the Executive Government implements it,
       the Judiciary sits in judgment not only on the implementation of the
       law by the Executive but also on the validity of the legislation sought
       to be implemented. One of the functions of the superior judiciary in
       India is to examine the competence and validity of legislation, both
       in point of legislative competence as well as its consistency with the
       Fundamental Rights. In this regard, the courts in India possess a power
       not known to the English Courts. Where a statute is declared invalid in
       India it cannot be reinstated unless constitutional sanction is obtained
       therefore by a constitutional amendment or an appropriately modified
       version of the statute is enacted which accords with constitutional
       prescription. The range of judicial review recognised in the superior
       judiciary of India is perhaps the widest and the most extensive known to
       the world of law. The power extends to examining the validity of even
       an amendment to the Constitution, for now it has been repeatedly held
       that no constitutional amendment can be sustained which violates the


6     (1989) 2 SCC 754
    RAM KISHOR ARORA v. DIRECTORATE OF                              757
      ENFORCEMENT [BELA M. TRIVEDI, J.]

basic structure of the Constitution. (See Kesavananda Bharati v. State
of Kerala [(1973) 4 SCC 225 : 1973 Supp SCR 1] , Indira Nehru
Gandhi v. Raj Narain [1975 Supp SCC 1 : (1976) 2 SCR 347] , Minerva
Mills Ltd. v. Union of India [(1980) 2 SCC 591] and recently in S.P.
Sampath Kumar v. Union of India [(1987) 1 SCC 124 : (1987) 1 SCR
435 : (1987) 2 ATC 82] .) With this impressive expanse of judicial
power, it is only right that the superior courts in India should be
conscious of the enormous responsibility which rest on them. This is
specially true of the Supreme Court, for as the highest Court in the
entire judicial system the law declared by it is, by Article 141 of the
Constitution, binding on all courts within the territory of India.
8. Taking note of the hierarchical character of the judicial system in
India, it is of paramount importance that the law declared by this Court
should be certain, clear and consistent. It is commonly known that
most decisions of the courts are of significance not merely because
they constitute an adjudication on the rights of the parties and resolve
the dispute between them, but also because in doing so they embody
a declaration of law operating as a binding principle in future cases.
In this latter aspect lies their particular value in developing the
jurisprudence of the law.
9. The doctrine of binding precedent has the merit of promoting a
certainty and consistency in judicial decisions, and enables an organic
development of the law, besides providing assurance to the individual
as to the consequence of transactions forming part of his daily affairs.
And, therefore, the need for a clear and consistent enunciation of legal
principle in the decisions of a Court.
10. to 26………….
27. What then should be the position in regard to the effect of the
law pronounced by a Division Bench in relation to a case raising the
same point subsequently before a Division Bench of a smaller number
of Judges? There is no constitutional or statutory prescription in the
matter, and the point is governed entirely by the practice in India of
the courts sanctified by repeated affirmation over a century of time. It
cannot be doubted that in order to promote consistency and certainty
in the law laid down by a superior Court, the ideal condition would
758            SUPREME COURT REPORTS                        [2023] 16 S.C.R.


       be that the entire Court should sit in all cases to decide questions of
       law, and for that reason the Supreme Court of the United States does
       so. But having regard to the volume of work demanding the attention
       of the Court, it has been found necessary in India as a general rule
       of practice and convenience that the Court should sit in Divisions,
       each Division being constituted of Judges whose number may be
       determined by the exigencies of judicial need, by the nature of the
       case including any statutory mandate relative thereto, and by such
       other considerations which the Chief Justice, in whom such authority
       devolves by convention, may find most appropriate. It is in order to
       guard against the possibility of inconsistent decisions on points of
       law by different Division Benches that the Rule has been evolved,
       in order to promote consistency and certainty in the development of
       the law and its contemporary status, that the statement of the law by
       a Division Bench is considered binding on a Division Bench of the
       same or lesser number of Judges. This principle has been followed in
       India by several generations of Judges. ……”
      15. Another Constitution Bench in Chandra Prakash and Others
vs. State of U.P. and Another7 highlighting the utmost importance of the
doctrine of binding precedent in the administration of judicial system and
following the decision in Raghubir Singh’s case (supra) observed as under: -
       “22. A careful perusal of the above judgments shows that this Court
       took note of the hierarchical character of the judicial system in India.
       It also held that it is of paramount importance that the law declared
       by this Court should be certain, clear and consistent. As stated in the
       above judgments, it is of common knowledge that most of the decisions
       of this Court are of significance not merely because they constitute
       an adjudication on the rights of the parties and resolve the disputes
       between them but also because in doing so they embody a declaration
       of law operating as a binding principle in future cases. The doctrine
       of binding precedent is of utmost importance in the administration of
       our judicial system. It promotes certainty and consistency in judicial
       decisions. Judicial consistency promotes confidence in the system,


7     (2002) 4 SCC 234
         RAM KISHOR ARORA v. DIRECTORATE OF                                759
           ENFORCEMENT [BELA M. TRIVEDI, J.]

     therefore, there is this need for consistency in the enunciation of legal
     principles in the decisions of this Court. It is in the above context, this
     Court in the case of Raghubir Singh [(1989) 2 SCC 754] held that a
     pronouncement of law by a Division Bench of this Court is binding
     on a Division Bench of the same or smaller number of Judges. It is in
     furtherance of this enunciation of law, this Court in the latter judgment
     of Parija [(2002) 1 SCC 1] held that : (SCC p. 4, para 6)
     “But if a Bench of two learned Judges concludes that an earlier
     judgment of three learned Judges is so very incorrect that in no
     circumstances can it be followed, the proper course for it to adopt is
     to refer the matter before it to a Bench of three learned Judges setting
     out, as has been done here, the reasons why it could not agree with
     the earlier judgment. If, then, the Bench of three learned Judges also
     comes to the conclusion that the earlier judgment of a Bench of three
     learned Judges is incorrect, reference to a Bench of five learned Judges
     is justified.
                                                        (emphasis supplied)”
      16. In Sundeep Kumar Bafna vs. State of Maharashtra (supra) also
the above stated jurisprudence has been followed: -
     “19. It cannot be overemphasised that the discipline demanded by
     a precedent or the disqualification or diminution of a decision on
     the application of the per incuriam rule is of great importance, since
     without it, certainty of law, consistency of rulings and comity of courts
     would become a costly casualty. A decision or judgment can be per
     incuriam any provision in a statute, rule or regulation, which was not
     brought to the notice of the court. A decision or judgment can also
     be per incuriam if it is not possible to reconcile its ratio with that of a
     previously pronounced judgment of a co-equal or larger Bench; or if
     the decision of a High Court is not in consonance with the views of
     this Court. It must immediately be clarified that the per incuriam rule is
     strictly and correctly applicable to the ratio decidendi and not to obiter
     dicta. It is often encountered in High Courts that two or more mutually
     irreconcilable decisions of the Supreme Court are cited at the Bar. We
     think that the inviolable recourse is to apply the earliest view as the
     succeeding ones would fall in the category of per incuriam.”
760            SUPREME COURT REPORTS                      [2023] 16 S.C.R.


      17. In view of the afore-stated proposition of law propounded by
the Constitution Benches, there remains no shadow of doubt that the law
laid down by the Three-Judge bench in Vijay Madanlal Choudhary case
(supra) that Section 19(1) of the PMLA has a reasonable nexus with the
purposes and objects sought to be achieved by the PML Act and that the
said provision is also compliant with the mandate of Article 21(1) of the
Constitution of India, any observation made or any finding recorded by the
Division Bench of lesser number of Judges contrary to the said ratio laid
down in Vijay Madanlal Choudhary (supra) would be not in consonance
with the jurisprudential wisdom expounded by the Constitution Benches in
cases referred above. The Three-Judge Bench in Vijay Madanlal Choudhary
case (supra) having already examined in detail the constitutional validity
of Section 19 of PMLA on the touchstone of Article 22(1) and upheld the
same, it holds the field as on the date.
      18. It is true that the expression “as soon as may be” has not been
specifically explained in Vijay Madanlal Choudhary (supra). Even the
said expression has not been interpreted in either V. Senthil Balaji or in
Pankaj Bansal case. In V. Senthil Balaji, it is held inter alia that after
forming a reason to believe that the person has been guilty of an offence
punishable under the PMLA, the concerned officer is at liberty to arrest
him, while performing his mandatory duty of recording the reasons, and
that the said exercise has to be followed by way of an information being
served on the arrestee of the grounds of arrest. In Pankaj Bansal case
also the court after highlighting the inconsistent practice being followed
by the respondent-ED about the mode of informing the person arrested,
held that it would be necessary henceforth, that a copy of such written
grounds of arrest is furnished to the arrested person as a matter of course
and without exception.
      19. In view of the above, the interpretation of the expression “as soon
as may be” assumes significance. In our opinion, the interpretation of the
said expression should not detain us more in view of the Constitution Bench
Judgment in case of Abdul Jabar Butt and Another vs. State of Jammu &
Kashmir.8 In the said case, the Constitution Bench while interpreting Section


8     AIR 1957 SC 281
         RAM KISHOR ARORA v. DIRECTORATE OF                                 761
           ENFORCEMENT [BELA M. TRIVEDI, J.]

8 of Jammu & Kashmir Preventive Detention Act 2011, had an occasion to
interpret the expression “as soon as may be” and it observed thus:-
     “6. Sub-section (1) imposes on the Government two duties, namely, (i)
     the duty of communicating to the detenue the grounds on which the order
     has been made, and (ii) the duty of affording him the earliest opportunity
     of making representation against the order to the Government. The first
     duty is to be performed “as soon as may be”. Quite clearly the period
     of time predicated by the phrase “as soon as may be” begins to run
     from the time the detention in pursuance of the detention order begins.
     The question is — what is the span of time, which is designated by the
     words “as soon as may be”? The observations of Dysant, J. in King’s Old
     Country, Ltd. v. Liquid Carbonic Can. Corpn., Ltd. [(1942) 2 WWR 603,
     606] quoted in Stroud’s Judicial Dictionary 3rd Edn., Vol. 1, p. 200 are
     apposite. Said the learned Judge, “to do a thing ‘as soon as possible’ means
     to do it within a reasonable time, with an understanding to do it within the
     shortest possible time”. Likewise to communicate the grounds ‘as soon
     as may be may well be said to mean to do so within a reasonable time
     with an understanding to do it within the shortest possible time. What,
     however, is to be regarded as a reasonable time or the shortest possible
     time? The words “as soon as may be” came for consideration before this
     Court in Ujagar Singh v. State of the Punjab [1951 SCC 170 : (1952) SCR
     756] . At pp. 761-62 this Court observed that the expression meant with a
     “reasonable despatch” and then went on to say that “what was reasonable
     must depend on the facts of each case and no arbitrary time limit could
     be set down”. In Keshav Nilakanth Joglekar v. Commissioner of Police,
     Greater Bombay [ Supreme Court Petition No. 102 of 1956, decided on
     September 17, 1956] the word “forthwith” occurring in Section 3(3) of the
     Indian Preventive Detention Act (4 of 1950) came up for consideration.
     After observing that the word “forthwith” occurring in Section 3(3) of that
     Act did not mean the same thing as “as soon as may be” used in Section
     7 of the same Act and that the former was more peremptory than the
     latter, this Court observed that the time that was allowed to the authority
     to communicate the grounds to the detenue and was predicated by the
     expression “as soon as may be” was what was “reasonably convenient”
     or “reasonably requisite”.
762            SUPREME COURT REPORTS                          [2023] 16 S.C.R.


     20. Again, a three-judge bench in Durga Pada Ghosh vs. State of
West Bengal9 while considering the scheme of Article 22 of the Constitution
held as under: -
       “8. The scheme underlying Article 22 of the Constitution highlights
       the importance attached in our constitutional set-up to the personal
       freedom of an individual. Sub-articles (1) and (2) refer to the protection
       against arrest and detention of a person under the ordinary law. Persons
       arrested or detained under a law providing for preventive detention are
       dealt with in sub-articles (4) to (7). Sub-article (5) says that when a
       person is detained in pursuance of an order under a law providing for
       preventive detention the grounds on which the order is made have to
       be communicated to the person concerned as soon as may be and he
       has to be afforded earliest opportunity to represent against the order.
       The object of communicating the grounds is to enable the detenu to
       make his representation against the order. The words “as soon as may
       be” in the context must imply anxious care on the part of the authority
       concerned to perform its duty in this respect as early as practicable
       without avoidable delay.”
      21. In view of the above, the expression “as soon as may be” contained
in Section 19 of PMLA is required to be construed as- “as early as possible
without avoidable delay” or “within reasonably convenient” or “reasonably
requisite” period of time. Since by way of safeguard a duty is cast upon the
concerned officer to forward a copy of the order along with the material in
his possession to the Adjudicating Authority immediately after the arrest of
the person, and to take the person arrested to the concerned court within 24
hours of the arrest, in our opinion, the reasonably convenient or reasonably
requisite time to inform the arrestee about the grounds of his arrest would
be twenty-four hours of the arrest.
     22. In Vijay Madanlal Choudhary (supra), it has been categorically
held that so long as the person has been informed about the grounds of
his arrest, that is sufficient compliance of mandate of Article 22(1) of
the Constitution. It is also observed that the arrested person before being
produced before the Special Court within twenty-four hours or for that


9     (1972) 2 SCC 656
          RAM KISHOR ARORA v. DIRECTORATE OF                               763
            ENFORCEMENT [BELA M. TRIVEDI, J.]

purposes of remand on each occasion, the Court is free to look into the
relevant records made available by the Authority about the involvement of
the arrested person in the offence of money-laundering. Therefore, in our
opinion 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.
      23. As discernible from the judgment in Pankaj Bansal Case also
noticing the inconsistent practice being followed by the officers arresting
the persons under Section 19 of PMLA, directed to furnish the grounds of
arrest in writing as a matter of course, “henceforth”, meaning thereby from
the date of the pronouncement of the judgment. The very use of the word
“henceforth” implied that the said requirement of furnishing grounds of
arrest in writing to the arrested person as soon as after his arrest was not the
mandatory or obligatory till the date of the said judgment. The submission
of the learned Senior Counsel Mr. Singhvi for the Appellant that the said
judgment was required to be given effect retrospectively cannot be accepted
when the judgment itself states that it would be necessary “henceforth” that
a copy of such written grounds of arrest is furnished to the arrested person as
a matter of course and without exception. Hence non furnishing of grounds
of arrest in writing till the date of pronouncement of judgment in Pankaj
Bansal case could neither be held to be illegal nor the action of the concerned
officer in not furnishing the same in writing could be faulted with. As such,
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, as held in Vijay Madanlal (supra).
      24. In so far as the facts of the present case are concerned, it is not
disputed 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 “I have been informed
and have 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
764          SUPREME COURT REPORTS                      [2023] 16 S.C.R.


learned Senior Counsel, Mr. Singhvi is that he was not furnished a copy of
the document containing the grounds of arrest at the time of arrest. Since
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, we hold 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.
     25. In that view of the matter, the Appeal being devoid of merits is
dismissed.


Headnotes prepared by:                                    Appeal dismissed.
Ankit Gyan