EVOLUTION OF JURISPRUDENCE: CONSTITUTIONAL SAFEGUARDS GOVERNINGARREST UNDER SECTION 19 OF THE PREVENTION OF MONEY LAUNDERING ACT,2002
The power to arrest under the Prevention of Money Laundering Act, 2002 (“PMLA”), lies at the intersection of the State’s authority to investigate economic offences and an individual’s constitutionally guaranteed right to personal liberty. This tension assumes particular significance in the context of Section 19 of the PMLA, which empowers a Director, Deputy Director, Assistant Director or any other officer authorized under the Act to arrest a person on the basis of material in their possession, provided they have reason to believe that such person is guilty of an offence punishable under the Act. However, the seriousness of the offence under investigation cannot, in itself, justify the dilution of the constitutional safeguards governing the exercise of this power. The central question, therefore, extends beyond the existence of the power to arrest to whether its exercise conforms to the constitutional limitations that circumscribe it.
This article intends to trace the evolution of arrest jurisprudence under the PMLA through three interrelated constitutional safeguards: (i) the communication of the grounds of arrest to the arrested person in writing; (ii) production of the arrested person before the nearest Magistrate within 24 hours of arrest; and (iii) protection against prolonged incarceration, particularly where the trial is unlikely to conclude within a reasonable period.
By examining the judicial interpretation and enforcement of these safeguards in the context of Section 19 of the PMLA, this article highlights on how constitutional courts have sought to balance the responsibilities of law enforcement with the cardinal constitutional guarantees on a case-to-case basis whilst upholding the rule that such exercise of power to deprive an individual’s personal liberty would remain circumscribed by constitutional safeguards.
MANDATORY COMMUNICATION OF GROUNDS OF ARREST TO THE ARRESTED PERSON
Article 22 of the Constitution provides that no person who is arrested shall be detained in custody without being informed, as soon as may be, of the grounds of such arrest. The rationale behind prescribing such a safeguard is to enable the arrested person to effectively challenge the legality of such arrest before the competent Court and consequently seek for appropriate reliefs i.e., bail. Particularly, Section 19(1) of the Act has succinctly extracted the pith of Article 22 so much so that communication of the grounds of arrest is seen not as a mere procedural formality. Suffice to mention that the Hon’ble Courts have tested its effectiveness by ascertaining if the arrested person has understood the grounds of arrest, any failure thereof would ex facie vitiate such arrest.
In Pankaj Bansal v. Union of India, the Enforcement Directorate (‘ED’) issued summons to the appellants which consequently led to the registration of the 1st ECIR. Since the appellants were apprehending arrest by the ED, the appellants had secured an anticipatory bail from the Hon’ble High Court of Delhi in relation to the 1st ECIR registered as against them. While the interim protection was in force, the ED had arbitrarily issued another summons and consequently registered a 2nd ECIR pursuant to which the appellants were arbitrarily arrested within a span of 24 hours by the ED. It is critical to observe that there was no material on record whatsoever to evince that the ground of arrest was adequately communicated to one of the appellants by the ED. Therefore, the arrest by ED demonstrated a flagrant deviation from the safeguard granted under Article 22 of the Constitution.
The significance of Pankaj Bansal lies in the Supreme Court’s treatment of the communication of grounds prior to or at the time of such arrest, thereby ensuring that the essence of the constitutional protection guaranteed under Article 22(1) is meaningfully preserved and that the arrested person is placed in a position to effectively challenge the legality of such arrest. The Apex Court mandated that the grounds of arrest be furnished to the arrested person in writing and that such communication be meaningful, as a matter of course and without exception. This requirement places the legality of the arrest within a broader constitutional framework wherein the power conferred upon the ED under Section 19 cannot be exercised independently of the arrested person’s ability to understand and contest the basis for such deprivation of their liberty.
The consequence of ED’s non-compliance in the instant case was equally significant as the Supreme Court allowed the appeals and set aside the consequential actions of the High Court and Trial Court whilst directing the release of the accused persons from custody. This decision therefore demonstrates that the power of arrest under Section 19 operates subject to a substantive limitation i.e., mandatory compliance with Article 22(1) vis-à-vis communication of grounds of arrest in an effective manner. In this sense, Pankaj Bansal marks an important stage in the evolution of Section 19 jurisprudence, by requiring the exercise of the statutory power of arrest to remain accountable to the constitutional right of an individual to know, and meaningfully challenge, the reasons for his detention.
SAFEGUARD TO THE ARRESTED PERSON POST ARREST- THE 24 HOUR RULE
The exercise of ED’s executive power of arrest cannot override the constitutional mandate of producing an arrested person before the competent Magistrate within 24 hours of arrest. In this regard, Section 19(3) of the Act, expressly mandates such production before the Special Court or Magistrate having jurisdiction. The provision thus embodies the underlying spirit of Article 22 of the Constitution, serving as a crucial safeguard against the arbitrary exercise of executive power and ensuring timely judicial intervention of such arrest and detention.
The significance of this safeguard is particularly evident in Directorate of Enforcement v. Subhash Sharma[2], wherein the Hon’ble Apex Court held the arrest of the accused to be illegal and violative of Article 22(2), as the accused was not produced before the nearest Magistrate within 24 hours of being taken into custody by the ED. The decision demonstrates that the validity of an arrest under the Act does not depend solely upon the existence of statutory authority to arrest by the ED, the subsequent production of the arrested person taken into custody must also remain within the prescribed procedural limits. Therefore, the 24-hour requirement operates as another substantive limitation on Section 19 of the PMLA, rather than as a procedural formality that can be overlooked once an arrest has been effected. The consequence of such non-compliance further attacks the validity of such arrest.
Upon ascertaining the arrest to be violative of Article 22(2), the Hon’ble Apex Court upheld the order of the High Court granting bail to the accused. The decision thus illustrates that judicial scrutiny under Article 22(2) extends beyond examining the initial exercise of the power of arrest and traverses in the manner in which custody is continued thereafter. In this sense, the 24-hour rule forms the second stage of constitutional protection for an arrest under Section 19. Although communication of the grounds of arrest enables the arrested person to understand and challenge the basis of the deprivation of liberty, while, non-production before the Magistrate enables the arrested person to challenge the arrest on an independent ground altogether.
LIMITS OF A PROLONGED DETENTION
The constitutional safeguards governing an arrest under Section 19 do not cease to operate once the arrested person has been produced before a Magistrate. Article 21 imposes a continuing obligation to ensure that the deprivation of personal liberty remains constitutionally justified throughout the period of incarceration. The Hon’ble Apex Court has held that incarceration of an undertrial accused for an unreasonably long period, particularly where the trial is not likely to be completed within a reasonable period, would amount to a violation of Article 21 of the Constitution. The judicial inquiry, therefore, extends beyond the legality of the initial arrest and requires consideration of whether the continued detention of the accused remains justified basis the circumstances of a case.
In V. Senthil Balaji v. The Deputy Director, Directorate of Enforcement[3], the appellant, a former Transport Minister of Tamil Nadu, was alleged to have collected substantial amounts in collusion with other accused persons on the pretext of securing employment in the Transport Department. The allegations were investigated by the ED, which consequently led to the arrest and detention of the appellant. The significance of V. Senthil Balaji lies in the Court’s recognition that the statutory restrictions governing the grant of bail cannot be applied in a manner that renders the constitutional protection of personal liberty under Article 21 ineffective. The Court emphasised on the duty of constitutional courts to safeguard the liberty of an accused person and held that such intervention cannot be curtailed merely because the offence is governed by stringent bail provisions. Thus, the existence of a restrictive statutory
bail regime does not, by itself, provide justification for indefinite or disproportionate incarceration.
More significantly, the judgment introduces a temporal dimension to the assessment of judicial custody. Where there is no reasonable likelihood of the trial being completed within a reasonable period and the period of incarceration has already constituted a substantial portion of the maximum sentence prescribed for the offence, continued detention may cease to serve the legitimate purposes of pre-trial incarceration and become violative of Article 21. The focus therefore shifts from whether the accused could initially be detained to whether the State can continue to justify such detention for a prolonged period as the proceedings remain pending.
The decision consequently represents a further development in the judicial scrutiny of arrests under the Act. While the communication of grounds of arrest under Article 22(1) safeguards the accused at the commencement of custody, and production before the Magistrate under Article 22(2) subjects executive detention to prompt judicial oversight, Article 21 operates as a continuing safeguard against incarceration becoming disproportionately prolonged. These three safeguards, when viewed together, demonstrate that constitutional scrutiny under Section 19 of the Act extends across the entire continuum of deprivation of liberty from the legality of the arrest, to the continuation of custody, and ultimately to the justification for prolonged detention.
BETWEEN ENFORCEMENT AND LIBERTY: WHERE THE SAFEGUARDS HOLD AND WHERE THEY STRAIN
Viewed cumulatively, these decisions demonstrate that the Hon’ble Apex Court has sought to calibrate the stringent architecture of the PMLA against Articles 21 and 22 of the Constitution, rather than strike at the power of arrest itself. This approach, however, has its limits. Firstly, the three safeguards do not carry equal doctrinal weight. While a breach of the first two vitiates the arrest, the third, drawn from Senthil Balaji, demonstrates that prolonged incarceration without trial may justify the grant of bail notwithstanding the twin conditions under Section 45, albeit subject to the stringent conditions imposed by the Hon’ble Court.
Secondly, the “meaningful communication” standard in Pankaj Bansal might not discourage the ED from placing reliance on conventional usage of generic or boilerplate grounds thereby satisfying the letter of such requirement while regrettably defeating its purpose as envisaged under Article 22 of the Constitution. Thirdly, release on account of a procedural breach does not preclude a fresh arrest that complies with Section 19. In this sense, these safeguards merely discipline the manner of the ED’s power more than its extent. Ultimately, the effective constitutional check on Section 19 lies not merely in the observance of statutory safeguards by the ED, but in the willingness of constitutional courts to scrutinise the exercise of its arrest powers.
CONCLUSION
The power of arrest under Section 19 of the PMLA is no longer an isolated statutory authority. Pankaj Bansal, Subhash Sharma and Senthil Balaji together show that its exercise must answer to Articles 21 and 22 at every stage, when such arrest is made, when such judicial custody is undertaken, and while such detention continues. Yet these safeguards are only as strong as and when they are subject to scrutiny, and thus regulate how the ED exercises its power. The task for constitutional courts is to ensure that the grounds of arrest are meaningfully communicated, that production before the Magistrate is prompt, and that prolonged custody is justified, thereby ensuring that the prosecution of serious economic offences is not undermined in the course of safeguarding personal liberty.
The authors of the article are- Rishitha Kishan (Senior Associate), Sanskruti Jinwal (Associate-II)
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