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Case Summary: Pankaj Bansal v. Union of India & Ors. (2023)

Case Stats

Court: Supreme Court of India
Bench: A.S. Bopanna & Sanjay Kumar, JJ. (Division Bench)
Citation: (2023) 10 SC CK 0001
Case Nos.: Criminal Appeal Nos. 3051–3052 & 3053–3054 of 2023
Date of Decision: 03-10-2023
Disposition: Allowed; arrests and remand orders set aside for non‑compliance with PMLA §19; written grounds of arrest mandated

[Judgment Source] https://www.courtkutchehry.com/Judgement/Search/t/2369340-pankaj-bansal-vs-union-of?s=&refine_search=&s_acts=

All Citations / References

Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929
Arnesh Kumar v. State of Bihar, (2014) 8 SCC 273
Satender Kumar Antil v. CBI, 2022 SCC OnLine SC 825

Facts of the Case

First ECIR (15.06.2021) against IREO Group; appellants (M3M Group) not named. Later, FIR No. 0006/2023 (ACB Panchkula) alleged favouritism by a Special Judge toward IREO/M3M promoters.
On this FIR, ED registered a second ECIR (13.06.2023). Summons issued late evening (13–14 June). While at ED office (14.06.2023), Basant Bansal was arrested at ~6:00 pm and Pankaj Bansal at ~10:30 pm under PMLA §19(1).
Produced before Vacation/ASJ, Panchkula; ED custody granted and extended; then judicial custody. P&H High Court rejected challenges to arrest/remand (20.07.2023; 26.07.2023).
On appeal, SC examined strict compliance with §19 PMLA (grounds of arrest, recording ‘reasons to believe’, forwarding to AA, production under CrPC §167).

Law Points Raised

Whether §19(1) PMLA mandates furnishing the ‘grounds of arrest’ in writing to the arrestee at the time of arrest.
Scope of court’s scrutiny at remand—duty to verify §19 compliance beyond mere production within 24 hours.
Interplay of PMLA §65 & CrPC §167; constitutional safeguards under Articles 20(3) & 22(1).
Effect of non‑compliance: does remand cure an illegal arrest?

Acts / Provisions / Articles Referred

Prevention of Money Laundering Act, 2002: §§ 19(1)–(3), 44, 45, 50, 62, 65; PMLA Arrest Rules, 2005 rr. 2(1)(g), 2(1)(h), 6.
Constitution of India: Arts. 20(3), 22(1).
CrPC, 1973: § 167; § 200.
IPC: § 120B; PC Act, 1988: §§ 7, 8, 11, 13.

Judgments Referred

Vijay Madanlal Choudhary v. Union of India (3‑J) — §19 safeguards; §65 PMLA.
Arnesh Kumar v. State of Bihar — necessity of arrest; reasons to record & communicate.
Satender Kumar Antil v. CBI — arrest/remand discipline.

Obiter Dicta (Notable Observations)

Transparency under §19 demands effective communication of grounds; oral intimation is insufficient for meaningful exercise of rights.
Mechanical remand orders cannot sanitize a §19‑defective arrest.

Ratio Decidendi

Under PMLA §19(1), ED must furnish the ‘grounds of arrest’ in writing at the time of arrest; failure vitiates arrest and subsequent remand.
Remand courts must satisfy themselves that §19 prerequisites are met; production within 24 hours alone is not enough.
Appeals allowed; arrests and remand orders quashed for non‑compliance with §19 PMLA.
Clarified that written grounds requirement applies; appellants benefit due to established non‑compliance on facts.

Relevant Paragraph Numbers (Quick Pointers)

2–12: Facts—FIR/ECIRs, arrest sequence, rival contentions.
14 onwards: §19/§65 PMLA safeguards, CrPC §167 interplay, constitutional context.
Closing paragraphs: operative directions (quashing arrest/remand; written‑grounds mandate).

Summary (One‑Paragraph)

The Supreme Court set aside the arrest and remand of Pankaj and Basant Bansal under the PMLA for breach of §19. It held that ED officers must record ‘reasons to believe’ and furnish the ‘grounds of arrest’ in writing to the arrestee at the time of arrest; oral intimation is inadequate. Remand courts must verify this compliance and cannot mechanically authorize custody. The ruling sharpens statutory safeguards and aligns PMLA arrest practice with Articles 20(3) and 22(1).