TaxTMI 
TaxTMI 
2023 (11) TMI 157
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.... down by the Hon'ble Supreme Court in "Vijay Madanlal Choudhary Versus Union of India & Ors. 2022 SCC Online SC 929" hold that any transaction that may have occurred prior to the coming into existence of the Schedule/Predicate Offence, cannot be covered for the said offence under Prevention of Money Laundering Act, 2002 as "proceeds of crime" defined under Section 2 (1)(u) thereof are dependent on illegal gain of property as a result of criminal activity relating to such scheduled offence and cannot have any independent existence of its own; (ii) In consonance with the principles laid down by the Hon'ble Supreme Court vide order dated 3.10.2023 passed in Criminal Appeal No. 3051-3052 of 2023 in Pankaj Bansal Versus Union of India and others quash and set aside the arrest of the petitioner and consequential Arrest Order dated 8.6.2023 (Annexure P-15) as there has been grave violation of the mandatory postulates interdicting and governing the invocation of powers under Section 19 of Prevention of Money Laundering Act, 2022; (iii) As a sequel and consequence to the prayer supra this Hon'ble Court may be pleased to set aside and quash the remand orders dated 9.6.2023 ....
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....and the present petitioner Roop Bansal. Further surveys and searches were carried out and ultimately the present petitioner was arrested on 08.06.2023. He was produced before the Special Court PMLA, Panchkula on 09.06.2023. He was remanded to seven days ED custody which was later on extended by four days. Finally he was committed to judicial custody on 20.06.2023. At present, the petitioner is lodged in Central Jail, Ambala. A supplementary prosecution complaint was, therefore, filed on 04.08.2023 wherein the present petitioner was arraigned alongwith 51 other managerial persons/associates and corporate entitites of IREO Group and M3M Group. The said complaint is at the stage of cognizance. 3. It would be essential to refer here that apart from the first ECIR, another ECIR bearing No.ECIR/GNZO/17/2023 (hereinafter referred to as 'the Second ECIR') had been registered by the Enforcement Directorate on 13.06.2023 in which also Basant Bansal, Pankaj Bansal, Roop Bansal and other persons are accused. It would be further essential to notice that the second ECIR arises out of scheduled offences alleged to have been committed under Sections 7, 8, 11 and 13 of the Prevention of Corrupti....
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....Hon'ble Supreme Court vide judgment dated 03.10.2023. 9. The petitioner Roop Bansal, who is stated to have filed a regular bail application under Section 439 Cr.P.C. (in the first ECIR) before the Special Court, Panchkula, purportedly withdrew the same (as stated during the course of arguments on a query raised by this Court) and filed the present petition. Another application filed under Section 167 (2) Cr.P.C. for the grant of default bail is stated to be pending. 10. The present petition has now been filed praying for the reliefs referred to in the opening part of the petition and essentially laying challenge to his arrest on 08.06.2023 and the subsequent remand orders passed by the Vacation Judge/Addl. Sessions Judge, Panchkula. 11. We have heard learned counsel for the parties and have perused the petition, the reply submitted by the respondents as also other documents placed on record during the course of arguments. 12 Learned Senior Counsel representing the petitioner restricted the claim of the petitioner only to prayers No.(ii), (iii) and (iv) and submitted that the first prayer was not being pressed. 12(i) Sh.Abhishek Manu Singhvi, learned Senior counsel re....
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....Commissioner, Income Tax, Rajkot versus Saurashtra Kutch Stock Exchange Limited (2008) 14 SCC 171. It was submitted that since in the present case, the grounds of arrest were not conveyed to the petitioner in writing, the same would amount to noncompliance of the provisions of Section 19 of PMLA in terms of the ratio laid down by the Hon'ble Apex Court in Pankaj Bansal's case (supra). Reference was also made to the judgment of the Hon'ble Apex Court in the case of Vijay Madan Lal Chaudhary and others versus Union of India and others 2022 (10) Scale 577 and V.Senthil Balaji Versus State represented by Deputy Director and others, 2023 (3) Law Herald (SC) 2088; 2023 SCC Online SC 934 (Criminal Appeals No.2284-2285 of 2023, decided on 07.08.2023). 12(iv) Reference was also made to the judgment of the Hon'ble Apex Court in the case of Arnab Manoranjan Goswami versus State of Maharashtra and others (2021) 2 SCC 427 to contend that deprivation of liberty even for a single day is one day too many. It was contended that since the arrest is illegal, the petitioner deserves to be set free forthwith. Though a compilation with other judgments was also supplied, reference was made onl....
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....resent case, on information having been given to the petitioner about the grounds of arrest, he read the same and was also read over the same in the local language and further he alongwith two witnesses appended their signatures on the said documents containing the grounds of arrest. It was contended that under the circumstances, it cannot be said that there was violation of Section 19 of PMLA. 13(ii) Learned counsel referred to the judgments of the Hon'ble Supreme Court in Pankaj Bansal Versus Union of India and others (supra) and submitted that the Hon'ble Apex Court declared the arrest of Basant Bansal and Pankaj Bansal to be illegal on account of the manner in which they were arrested in the second ECIR after joining them investigation in the first case and not solely on account of the fact that the grounds of arrest had not been supplied to them in writing. 13(iii) Learned counsel submitted that the case of the petitioner would be covered by the ratio laid down by the Hon'ble Apex Court in the cases of Vijay Madanlal Choudhary Versus Union of India & Ors. and V. Senthil Balaji Versus State represented by Deputy Director and others and since the grounds of arrest had been....
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....r 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 (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 exclu....
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.... suit in respect of the following matters, namely:- (a) discovery and inspection; (b) enforcing the attendance of any person, including any officer of a ^1[reporting entity] and examining him on oath; (c) compelling the production of records; (d) receiving evidence on affidavits; (e) issuing commissions for examination of witnesses and documents; and (f) any other matter which may be prescribed. (2) The Director, Additional Director, Joint Director, Deputy Director or Assistant Director shall have power to summon any person whose attendance he considers necessary whether to give evidence or to produce any records during the course of any investigation or proceeding under this Act. (3) All the persons so summoned shall be bound to attend in person or through authorised agents, as such officer may direct, and shall be bound to state the truth upon any subject respecting which they are examined or make statements, and produce such documents as may be required. (4) Every proceeding under sub-sections (2) and (3) shall be deemed to be a judicial proceeding within the meaning of section 193 and section 228 o....
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....s violation of Article 21 of the Constitution of India since the ECIR was equivalent to an FIR. The ECIR, it was submitted, contained the grounds of arrest, details of offences etc. and without the knowledge of the ingredients of such a document, the ability of the accused to defend himself at the stage of bail could not be fully realized. It was urged that the same may also hamper the ability to prepare for the trial at a later stage. The constitutionality of Sections 17 and 18 of the PMLA was also challenged. The vires of almost all provisions including proviso of Section 5 (1), Section 8 of the PMLA and other provisions were challenged. 17. On behalf of the Union of India, it was submitted that at that time, around 4700 cases were being investigated by ED which was a small number as compared to the number of cases registered under the Money Laundering Act in other countries. It was also submitted that in the last five years, only 2086 cases had been taken up for investigation under the PMLA out of registration of approximately 33 lacs FIRs relating to predicate offences by the police and other Enforcement Agencies. It was submitted before the Hon'ble Apex Court that the valid....
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....horised officers, such as of recording reasons for the belief regarding the involvement of person in the offence of money-laundering. That has to be recorded in writing and while effecting arrest of the person, the grounds for such arrest are informed to that person. Further, the authorised officer has to forward a copy of the order, along with the material in his possession, in a sealed cover to the Adjudicating Authority, who in turn is obliged to preserve the same for the prescribed period as per the Rules. This safeguard is to ensure fairness, objectivity and accountability of the authorised officer in forming opinion as recorded in writing regarding the necessity to arrest the person being involved in offence of money-laundering. Not only that, it is also the obligation of the authorised officer to produce the person so arrested before the Special Court or Judicial Magistrate or a Metropolitan Magistrate, as the case may be, within twenty-four hours. This production is also to comply with the requirement of Section 167 of the 1973 Code. There is nothing in Section 19, which is contrary to the requirement of production under Section 167 of the 1973 Code, but being an express st....
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....n if interpreted to permit the authorised officer to arrest someone being involved in the commission of offence of money-laundering without a formal complaint against him, would be ex facie manifestly arbitrary and unconstitutional. 324. This argument clearly overlooks the overall scheme of the 2002 Act. As noticed earlier, it is a comprehensive legislation, not limited to provide for prosecution of person involved in the offence of money-laundering, but mainly intended to prevent money-laundering activity and confiscate the proceeds of crime involved in money-laundering. It also provides for prosecuting the person involved in such activity constituting offence of money-laundering. In other words, this legislation is an amalgam of different facets including setting up of agencies and mechanisms for coordinating measures for combating money-laundering. Chapter III is a provision to effectuate these purposes and objectives by attachment, adjudication and confiscation. The adjudication is done by the Adjudicating Authority to confirm the order of provisional attachment in respect of proceeds of crime involved in money-laundering. For accomplishing that objective, the authorit....
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....oms 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 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 obj....
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....t restated the position that where the discretion to apply the provisions of a particular statute is left with the Government or one of the highest officers, it will be presumed that the discretion vested in such highest authority will not be abused. Additionally, the Central Government has framed Rules under Section 73 in 2005, regarding the forms and the manner of forwarding a copy of order of arrest of a person along with the material to the Adjudicating Authority and the period of its retention. In yet another decision in Ahmed Noormohmed Bhatti, this Court opined that the provision cannot be held to be unreasonable or arbitrary and, therefore, unconstitutional merely because the authority vested with the power may abuse his authority. (Also see Manzoor Ali Khan). 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....
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....not 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 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 concern....
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....e expression "and" occurring in Section 3 has to be construed as "or", to give full play to the said provision so as to include "every" process or activity indulged into by anyone. Projecting or claiming the property as untainted property would constitute an offence of money -laundering on its own, being an independent process or activity. (c) The interpretation suggested by the petitioners, that only upon projecting or claiming the property in question as untainted property that the offence of Section 3 would be complete, stands rejected. (d) The offence under Section 3 of the 2002 Act is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence. It is concerning the process or activity connected with such property, which constitutes the offence of money-laundering. The Authorities under the 2002 Act cannot prosecute any person on notional basis or on the assumption that a scheduled offence has been committed, unless it is so registered with the jurisdictional police and/or pending enquiry/trial including by way of criminal complaint before the competent forum. If the person is finally discharged/acquitted of the sched....
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....with by the Court concerned and by the Authority concerned in accordance with the interpretation given in this judgment. (xiii)(a) The reasons which weighed with this Court in Nikesh Tarachand Shah for declaring the twin conditions in Section 45(1) of the 2002 Act, as it stood at the relevant time, as unconstitutional in no way obliterated the provision from the statute book; and it was open to the Parliament to cure the defect noted by this Court so as to revive the same provision in the existing form. (b) We are unable to agree with the observations in Nikesh Tarachand Shah distinguishing the enunciation of the Constitution Bench decision in Kartar Singh ; and other observations suggestive of doubting the perception of Parliament in regard to the seriousness of the offence of money-laundering, including about it posing serious threat to the sovereignty and integrity of the country. (c) The provision in the form of Section 45 of the 2002 Act, as applicable post amendment of 2018, is reasonable and has direct nexus with the purposes and objects sought to be achieved by the 2002 Act and does not suffer from the vice of arbitrariness or unreasonableness. ....
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....orities (ED officials), the department ought to explore the desirability of placing information on its website which may broadly outline the scope of the authority of the functionaries under the Act and measures to be adopted by them as also the options/remedies available to the person concerned before the Authority and before the Special Court. (xx) The petitioners are justified in expressing serious concern bordering on causing injustice owing to the vacancies in the Appellate Tribunal. We deem it necessary to impress upon the executive to take corrective measures in this regard expeditiously. (xxi) The argument about proportionality of punishment with reference to the nature of scheduled offence is wholly unfounded and stands rejected." 18(iv). The provisions of PMLA again came under the scanner of the Hon'ble Apex Court in V. Senthil Balaji Versus State represented by Deputy Director and others's case (supra). There was a difference of opinion by the Division Bench of the Madras High Court while dealing with a writ petition filed seeking a writ of habeas corpus in pursuance of an arrest made, followed by a remand to judicial custody and then to the authorit....
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.... (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 matter, 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 [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 [Special Court or] Magistrate's Court." 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 noncompliance of t....
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....Court restated the position that where the discretion to apply the provisions of a particular statute is left with the Government or one of the highest officers, it will be presumed that the discretion vested in such highest authority will not be abused. Additionally, the Central Government has framed Rules under Section 73 in 2005, regarding the forms and the manner of forwarding a copy of order of arrest of a person along with the material to the Adjudicating Authority and the period of its retention. In yet another decision in Ahmed Noormohmed Bhatti v. State of Gujarat, (2005) 3 SCC 647, this Court opined that the provision cannot be held to be unreasonable or arbitrary and, therefore, unconstitutional merely because the authority vested with the power may abuse his authority. (Also see Manzoor Ali Khan v. Union of India, (2015) 2 SCC 33)." (emphasis supplied) 41. The conclusion thus arrived is that the Legislature in its wisdom has consciously created the necessary safeguards for an arrestee, keeping in mind his liberty, and the need for an external approval and supervision. This provision is in compliance with Article 21 and 22(2) of the Constitution of Indi....
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....nsofar as they are not inconsistent with the provisions of the Act of 2002 in respect of arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings thereunder. It was noted that Section 19 of the Act of 2002 prescribes the manner in which the arrest of a person involved in money laundering can be effected. It was observed that such power was vested in high-ranking officials and that apart, Section 19 of the Act of 2002 provided inbuilt safeguards to be adhered to by the authorized officers, such as, of recording reasons for the belief regarding involvement of the person in the offence of money laundering and, further, such reasons have to be recorded in writing and while effecting arrest, the grounds of arrest are to be informed to that person. It was noted that the authorized officer has to forward a copy of the order, along with the material in his possession, to the Adjudicating Authority and this safeguard is to ensure fairness, objectivity and accountability of the authorized officer in forming an opinion, as recorded in writing, regarding the necessity to arrest the person involved in the offence of money laundering. The Bench a....
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....cer is at liberty to arrest the person concerned once he finds a reason to believe that he is guilty of an offence punishable under the Act of 2002, but he must also perform the mandatory duty of recording reasons. It was pointed out that this exercise has to be followed by the information of the grounds of his arrest being served on the arrestee. It was affirmed that it is the bounden duty of the authorized officer to record the reasons for his belief that a person is guilty and needs to be arrested and it was observed that this safeguard is meant to facilitate an element of fairness and accountability. Dealing with the interplay between Section 19 of the Act of 2002 and Section 167 Cr. P.C., this Court observed that the Magistrate is expected to do a balancing act as the investigation is to be completed within 24 hours as a matter of rule and, therefore, it is for the investigating agency to satisfy the Magistrate with adequate material on the need for custody of the accused. It was pointed out that this important factor is to be kept in mind by the Magistrate while passing the judicial order. This Court reiterated that Section 19 of the Act of 2002, supplemented by Section 167 C....
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....nd to all relevant matters and if the arrest suffered on the ground of violation of Article 22(1) of the Constitution, the order of remand would not cure the constitutional infirmities attaching to such arrest. 19. Viewed in this context, the remand order dated 15.06.2023 passed by the learned Vacation Judge/Additional Sessions Judge, Panchkula, reflects total failure on his part in discharging his duty as per the expected standard. The learned Judge did not even record a finding that he perused the grounds of arrest to ascertain whether the ED had recorded reasons to believe that the appellants were guilty of an offence under the Act of 2002 and that there was proper compliance with the mandate of Section 19 of the Act of 2002. He merely stated that, keeping in view the seriousness of the offences and the stage of the investigation, he was convinced that custodial interrogation of the accused persons was required in the present case and remanded them to the custody of the ED! The sentence - 'It is further (sic) that all the necessary mandates of law have been complied with' follows - 'It is the case of the prosecution....' and appears to be a continuation thereof, as indicated ....
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.... providing relevant information. It was however not brought out as to why Pankaj Bansal's replies were categorized as 'evasive' and that record is not placed before us for verification. In any event, it is not open to the ED to expect an admission of guilt from the person summoned for interrogation and assert that anything short of such admission would be an 'evasive reply'. In Santosh S/o Dwarkadas Fafat v. State of Maharashtra , this Court noted that custodial interrogation is not for the purpose of 'confession' as the right against self-incrimination is provided by Article 20(3) of the Constitution. It was held that merely because an accused did not confess, it cannot be said that he was not co-operating with the investigation. Similarly, the absence of either or both of the appellants during the search operations, when their presence was not insisted upon, cannot be held against them. 29. The more important issue presently is as to how the EDis required to 'inform' the arrested person of the grounds for his/her arrest. Prayer (iii) in the writ petitions filed by the appellants pertained to this. Section 19 does not specify in clear terms as to how the arrested pers....
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....ent, it would be essential for the arrested person to be aware of the grounds on which the authorized officer arrested him/her under Section 19 and the basis for the officer's 'reason to believe' that he/she is guilty of an offence punishable under the Act of 2002. It is only if the arrested person has knowledge of these facts that he/she would be in a position to plead and prove before the Special Court that there are grounds to believe that he/she is not guilty of such offence, so as to avail the relief of bail. Therefore, communication of the grounds of arrest, as mandated by Article 22(1) of the Constitution and Section 19 of the Act of 2002, is meant to serve this higher purpose and must be given due importance. 33. We may also note that the language of Section 19 of the Act of 2002 puts it beyond doubt that the authorized officer has to record in writing the reasons for forming the belief that the person proposed to be arrested is guilty of an offence punishable under the Act of 2002. Section 19(2) requires the authorized officer to forward a copy of the arrest order along with the material in his possession, referred to in Section 19(1), to the Adjudicating Auth....
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..... Conveyance of this information is not only to apprise the arrested person of why he/she is being arrested but also to enable such person to seek legal counsel and, thereafter, present a case before the Court under Section 45 to seek release on bail, if he/she so chooses. In this regard, the grounds of arrest in V. Senthil Balaji (supra) are placed on record and we find that the same run into as many as six pages. The grounds of arrest recorded in the case on hand in relation to Pankaj Bansal and Basant Bansal have not been produced before this Court, but it was contended that they were produced at the time of remand. However, as already noted earlier, this did not serve the intended purpose. Further, in the event their grounds of arrest were equally voluminous, it would be well-nigh impossible for either Pankaj Bansal or Basant Bansal to record and remember all that they had read or heard being read out for future recall so as to avail legal remedies. More so, as a person who has just been arrested would not be in a calm and collected frame of mind and may be utterly incapable of remembering the contents of the grounds of arrest read by or read out to him/her. The very purpose of....
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....rbitrary exercise of power. In effect, the arrest of the appellants and, in consequence, their remand to the custody of the ED and, thereafter, to judicial custody, cannot be sustained. 20(i). A perusal of the aforesaid reveals that the Hon'ble Apex Court held that the Magistrate was required to pass a reasoned order at the stage of giving remand to the Investigating Agency. The conditions laid down under Section 19 of the PMLA were discussed threadbare and while relying upon the previous decisions in the cases of Vijay Madanlal Choudhary Versus Union of India & Ors. and V.Senthil Balaji Versus State represented by Deputy Director and others (supra), the Hon'ble Apex Court further clarified the position and held that the grounds of arrest would have to be furnished to the accused in writing and failure to do so would render the arrest illegal. Since in Pankaj Bansal Versus Union of India and others's case (supra), the grounds of arrest had not been supplied in writing, the arrest and consequential remand to custody was set aside. 21. Reverting to the facts of the present case, it is now to be examined as to whether in the present case, the provisions of Section 19 of the ....
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....cation wherein details as mentioned in other documents produced before this Court were mentioned and 14 days custody was sought. In the order dated 09.06.2023, the officer concerned i.e. the Vacation Judge/Addl. Sessions Judge, Panchkula observed that a perusal of the record revealed that all the necessary mandates had been complied with. It was held that the arguments advanced by the counsel for the accused were not found to be tenable and that the request of ED for seeking remand was justified. The Court, therefore, granted remand of 07 days and further directed to produce the petitioner before it on 16.06.2023. Further remand of 04 days was granted and ultimately on 20.06.2023, the petitioner was remanded to judicial custody. As already observed, there was sufficient material in possession of the Officer concerned which gave him reason to believe that the petitioner was guilty of an offence punishable under the PMLA. Further, grounds of arrest were prepared in writing and were duly conveyed to the petitioner. The petitioner himself read out the same and appended his signatures also. The argument of learned Senior Counsel that the arrest was only on account of the petitioner givi....
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.... be sustained. 26. To arrive at this conclusion, the Hon'ble Apex Court noted that the mode of conveying information of the grounds of arrest must necessarily be meaningful so as to serve the intended purpose. Reference was made to Section 45 of the PMLA which enables the arrested person to seek release on bail. It was noticed that Section 45 prescribes twin conditions which are required to be satisfied in the absence of which, the arrested person would not be entitled to bail. The Hon'ble Apex Court held that to meet the requirement of Section 45 of the PMLA, it would be essential for the arrested person to be aware of the grounds of arrest and the basis for the officer's 'reason to believe' that the arrested person was guilty of offence punishable under the PMLA. Only if the arrested person has knowledge of these facts that he/she would be in a position to plead and prove before the Special Court that there are grounds to believe that he/she is not guilty of such offence, so as to avail the relief of bail. It was held that the communication of the grounds of arrest, as mandated by Article 22 (1) of the Constitution and Section 19 of the PMLA, is, therefore,....
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....at the same time, it declared the arrest and the consequential remand of Pankaj Bansal and Basant Bansal to be illegal. Had the intention been to make the condition only prospective, the Hon'ble Apex Court would not have declared the arrest of Pankaj Bansal and Basant Bansal to be illegal. 29. In the case of Assistant Commissioner, Income Tax, Rajkot versus Saurashtra Kutch Stock Exchange Limited (supra), the Hon'ble Apex Court held that a judicial decision acts retrospectively. It was held that according to the Blackstonian theory, it is not the function of the Court to pronounce a 'new rule' but to maintain and expound the 'old one'. It was held that Judges do not make law, they only discover or find the correct law. It was held that even where a subsequent decision alters the earlier one, the later decision does not make new law and it only discovers the correct principles of law which have to be applied retrospectively. The findings of the Hon'ble Apex Court were as under:- "35. In our judgment, it is also well settled that a judicial decision acts retrospectively. According to Blackstonian theory, it is not the function of the Court to pronounce a "new rule" but to....