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Synopsis

The Delhi High Court ruled that oral communication of grounds for arrest suffices as proper compliance with Section 19(1) of the Prevention of Money Laundering Act (PMLA), 2002, particularly considering the prospective nature of the Supreme Court's directions in the Pankaj Bansal case.

The court's decision upheld the Enforcement Directorate's (ED) arrest of former Bhushan Steel Managing Director Neeraj Singal on June 8, 2023.

The bench of Justice Vikas Mahajan, in the judgment pronounced on January 8, clarified that the directions issued by the Supreme Court in the Pankaj Bansal case, making it mandatory to communicate the arrest grounds in writing, are prospective.

The court stated, "At the time of petitioner’s arrest, oral communication of the grounds of arrest was proper compliance of the provisions of Section 19(1) of the PMLA.”

Neeraj Singal, challenging his arrest, argued that he was only provided with the 'arrest memo' during search proceedings.

On the contrary, the ED contended that the grounds of arrest were orally communicated and bore Singal’s signature, along with the time when his wife was informed.

Court, after considering the arguments and examining related documents, concluded that at the time of Singal's arrest, the law laid down in Moin Akhtar Qureshi was applicable, wherein it was held that oral communication of arrest grounds was proper compliance with Section 19(1) of the PMLA.

It said that merely because each page of the ‘ground of arrest’ was not signed by the petitioner, it could not be a reason to disbelieve the existence of the said document or to negate the fact that the grounds of arrest were shown and informed to him. 

“The above position is also fortified by the observation of the Supreme Court in Ram Kishor Arora (supra), wherein the Court held that non-furnishing of grounds of arrest in writing till the date of pronouncement of judgment in the 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," the court said.

Justice Mahajan noted, "The petitioner stood informed of grounds of arrest in terms of Section 19(1) of the PMLA when he was produced before the special judge."  Conclusively, court ruled that Singal's arrest could not be deemed illegal and also rejected his bail application. 

"It cannot be said that the arrest of the petitioner is illegal. Under the circumstances, I am of the view that the CRLMC 4376/2023 (plea against arrest) as well as BAIL APPLN 2356/2023 deserve to be dismissed and are accordingly dismissed," the court ordered.

Case Title: Neeraj Singal v. Directorate of Enforcement