March 1, 2024

Lukmaan IAS

A Blog for IAS Examination




CONTEXT:  The Supreme Court (SC) in its recent judgment has ruled that its October 3 judgment, requiring the Enforcement Directorate (ED) to provide a copy of the grounds of arrest at the time of an accused being arrested under money laundering charges, does not apply retrospectively. This new judgement, pronounced by the bench led by J.Bela Trivedi has restricted the scope of Bansal verdict.


  • Several petitions have been filed across courts, alleging illegal arrests by the ED on grounds that it only orally intimated grounds of arrest to the accused.
  • The Bench held that non-furnishing of grounds of arrest till the date of pronouncement in Pankaj Bansal case cannot be held to be illegal.
  • The apex court Bench further said that the accused need to be informed of the grounds of the arrest in writing within 24 hours and not necessarily at the time of arrest. But, oral communication is necessary.
  • This, in effect, dilutes its earlier dictum.
  • Provision of written communication about the grounds of arrest within 24 hours of arrest is in compliance with Section 19 of the Prevention of Money Laundering Act, 2002 and also with Article 22 (1) of the Indian constitution.


  • The Directorate of Enforcement is a multi-disciplinary organisation mandated with investigation of offences of money laundering and violations of foreign exchange laws.

The statutory functions of the ED are:

  • The Prevention of Money Laundering Act, 2002 (PMLA):
  • Under this, the ED has been given the responsibility to enforce the provisions of the PMLA by conducting investigation to trace the assets derived from proceeds of crime, to provisionally attach the property and to ensure prosecution of the offenders and confiscation of the property by the Special court.
  • The Foreign Exchange Management Act, 1999 (FEMA):
  • Under this, the ED conducts investigation into suspected contraventions of foreign exchange laws and regulations, to adjudicate and impose penalties on those adjudged to have contravened the law.
  • The Fugitive Economic Offenders Act, 2018 (FEOA):
  • The Directorate is mandated to attach the properties of the fugitive economic offenders who have escaped from the India warranting arrest and provide for the confiscation of their properties to the Central Government.


  • After the October 3 judgment, several PMLA undertrials had challenged their arrests based on Bansal’s three principles – first, the non-supply of written grounds; second, the absence of grounds other than mere “evasiveness”; and third, the presence of mala fides.
  • Now, since the judgment cannot be applied retrospectively, those cases will no longer be valid.

CONCLUSION: The Pankaj Bansal judgment was a valuable step in terms of setting institutional accountability of the ED. But the current judgment by the SC seems to dilute the safeguard provided by Bansal case and hence requires reconsideration.

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