PMLA Arrest, Search, Remand and Defence Rights: The Punjab and Haryana High Court’s Procedural Safeguards

PMLA Arrest, Search, Remand and Defence Rights: The Punjab and Haryana High Court's Procedural Safeguards

The Prevention of Money-laundering Act, 2002 gives the Directorate of Enforcement substantial powers of summons, search, arrest and prosecution. Those powers are not unstructured. Article 20(3), Article 21 and Article 22 of the Constitution, Section 19 PMLA, the remand jurisdiction of the Special Court and the continuing requirements of fairness place enforceable limits on how an investigation may proceed.

A series of decisions of the Punjab and Haryana High Court between October 2023 and November 2024 illustrates those limits at different stages of a PMLA case. Read together, the decisions do not create immunity from investigation. They insist that coercive power be supported by the statutory record, exercised at the legally correct time and reviewed independently by the court.

Written grounds of arrest: Roop Bansal

In Roop Bansal v. Union of India, CWP-23005-2023, decided on 31 October 2023, neutral citation 2023:PHHC:138899-DB, the Division Bench applied the Supreme Court's decision in Pankaj Bansal v. Union of India, 2023 INSC 866.

The High Court found that the grounds of arrest had been read to Roop Bansal and signed by him and two witnesses, but no written copy had been furnished. Paragraphs 25 to 31 held that this was not sufficient compliance with Section 19 PMLA and Article 22(1). The Court rejected the contention that the written-grounds requirement applied only prospectively. It reasoned that Pankaj Bansal itself had invalidated the arrests before it and that the same defect could not be treated differently merely because the arrest in Roop Bansal preceded that judgment.

Paragraph 32 separately examined the first remand order. A remand court must do more than state generally that mandatory provisions were followed. It must examine the grounds and the material necessary to determine whether the authorised officer recorded the statutory reason to believe and complied with Section 19. The arrest and remand orders were set aside and release was directed unless custody was required in another case.

The governing Supreme Court rule remains precise. Paragraph 39 of Pankaj Bansal requires a copy of the written grounds of arrest to be furnished as a matter of course. The requirement gives practical content to Article 22(1) and allows the arrested person to seek bail with knowledge of the case that must be answered under Section 45 PMLA.

When restraint becomes arrest: Pranav Gupta

In Pranav Gupta v. Union of India, CWP-24787-2023 with CWP-25048-2023, decided on 7 December 2023, neutral citation 2023:PHHC:157511-DB, the dispute concerned the interval between the petitioners accompanying ED officials on 27 October 2023 and the formal arrest memos drawn on 28 October.

Paragraphs 12 to 16 treated the earlier involuntary restraint as the legally relevant point of arrest. The record did not establish that the petitioners had voluntarily travelled in private vehicles of their choice; they accompanied ED officers in seized or official vehicles. The Court held that a summons could not be used to give an appearance of voluntariness to actual restraint. Because the grounds of arrest and reasons to believe were not supplied when liberty was first curtailed, the statutory breach arose on 27 October itself.

Paragraphs 17 to 21 also rejected the suggestion that a later remand order cured the defect. Relying on V. Senthil Balaji, the Court held that remand requires judicial application of mind to Section 19 compliance. The arrests and remand orders were quashed, subject to bonds and protective conditions.

The decision is fact-sensitive. Attendance pursuant to a summons does not automatically become arrest. The decisive question is whether, in substance, the person remained free to leave. The investigation record should therefore clearly distinguish voluntary attendance from physical or practical compulsion.

Search cannot become unrecorded detention: Dilbag Singh

Dilbag Singh alias Dilbag Sandhu v. Union of India, CRM-M-2191-2024 with CRM-M-3385-2024, decided on 8 February 2024, neutral citation 2024:PHHC:017817, involved searches beginning on 4 January and formal arrests on 8 January 2024.

After examining the panchnamas, statements and custody record, the High Court concluded that the petitioners had been wrongfully restrained during the intervening period. Paragraph 76 identified four defects: non-application of mind by the Special Court; restraint from 4 to 8 January amounting to arrest and consequent non-production within twenty-four hours; breach of Section 19(2); and non-compliance with Section 19(1).

The judgment also distinguished a prima facie view from the statutory formulation. Paragraphs 64 to 66 found that the material described only a prima facie case and that the grounds were vague and general. Section 19 requires the authorised officer, on the basis of material in possession and for reasons recorded in writing, to believe that the person is guilty of an offence punishable under the Act. The Court set aside the arrest, remand and consequential orders and directed release unless custody was required elsewhere.

Dilbag Singh should not be read as preventing a lawful, continuing search or questioning during a search. Its central warning is against converting a search power into several days of undisclosed custody while postponing the constitutional and statutory safeguards attached to arrest.

Long interrogation and the dignity of the person: Surender Panwar

In Surender Panwar v. Directorate of Enforcement, CRM-M-41194-2024, decided on 23 September 2024, neutral citation 2024:PHHC:125421, the petitioner appeared pursuant to a Section 50 summons and was interrogated for approximately fourteen hours and forty minutes before being arrested after midnight.

The High Court treated the manner and duration of questioning as material to voluntariness, dignity and the legality of the arrest. Its analysis emphasised the cumulative Section 19 requirements: material in the officer's possession, a recorded reason to believe that the person is guilty, written reasons and communication of the grounds of arrest. Paragraph 20 set aside the arrest and remand orders.

The later appellate position is important. In Directorate of Enforcement v. Surender Panwar, SLP (Criminal) No. 17790 of 2024, order dated 2 January 2025, the Supreme Court declined to interfere with the finding that the arrest was illegal. It expressly confined the High Court's findings to the legality of arrest and stated that they would not affect the merits of the pending complaint under Section 44 PMLA. Procedural invalidity of arrest and adjudication of guilt therefore remain distinct questions.

Arvind Kejriwal v. Directorate of Enforcement, 2024 INSC 512, supplies the wider Supreme Court framework. Paragraphs 83 and 84 recognised the need for consistent standards governing when the Section 19 power should be exercised and referred larger questions concerning the necessity of arrest. The Supreme Court nevertheless held on the record before it that the statutory conditions for that arrest had been satisfied, while granting interim release and referring the questions to a larger Bench. The decision cautions against treating arrest as either automatically necessary or automatically impermissible once sufficient material exists.

Reason to believe is substantive, but the record controls: Neeraj Saluja

Neeraj Saluja v. Union of India, CRM-M-10124-2024, decided on 30 September 2024, explains the Section 19 standard without invalidating the arrest before the Court.

Paragraphs 19 to 24 state that an arrest contrary to Article 22 or the mandatory requirements of Section 19 is illegal. The reason to believe is a substantive safeguard requiring a qualitative assessment of material before liberty is taken away; it is not an empty recital.

The result, however, turned on the actual grounds. Paragraphs 26 to 28 held that the arresting officer had recorded and communicated the intention, reasons, grounds and necessity of arrest. The grounds addressed the alleged diversion and non-recovery of a very substantial sum. The Court found them self-sufficient and in conformity with Section 19. The judgment therefore demonstrates both sides of judicial review: strict scrutiny of the statutory record, without substituting a court's preference where the authorised officer has documented a legally sustainable basis.

The Special Court is not an extension of the investigating agency: Balwant Singh

Balwant Singh v. Directorate of Enforcement, CRWP-9783-2024, decided on 18 November 2024, neutral citation 2024:PHHC:149872, concerned custody after the accused appeared before the Special Court pursuant to summons on a complaint. ED had not arrested him during the investigation.

Paragraphs 20 to 24 examined whether the statutory preconditions and the need for custodial interrogation had been demonstrated. The High Court found neither an adequate custody foundation nor sufficient material showing why remand was required. It stressed that the Special Court must act judicially and cannot function as an extended arm of ED. The initial custodial order and subsequent judicial-remand orders were quashed, and release was directed subject to the bonds already furnished.

The principle is not that a Special Court can never authorise custody after cognizance. If ED seeks custody of a person who was not arrested during investigation, it must apply and demonstrate why custodial interrogation is required at that stage. The court must then record its own satisfaction.

Appearance on complaint and the reasons needed to deny bail: Gurinder Pal Singh

Gurinder Pal Singh alias Tinku v. Directorate of Enforcement, CRM-M-10892-2024, decided on 14 March 2024, neutral citation 2024:PHHC:036585, addressed apprehended custody when the investigating agency had chosen not to arrest the petitioner during investigation but a prosecution complaint and summoning order had followed.

The High Court drew on the Supreme Court's reasoning in Satender Kumar Antil and Siddharth. Paragraph 31 held that where the agency did not arrest during investigation but the trial court proposes judicial custody upon filing of the complaint, reasons must exist to deny bail. The Court granted bail subject to attendance, non-interference and other conditions.

This ruling does not erase Section 45 PMLA. It addresses the procedural significance of the agency's own decision that arrest was unnecessary throughout investigation. A court considering custody at appearance must identify the justification for changing that position and apply the controlling statutory and constitutional standards to the record.

Access to defence material in attachment proceedings: Narinder Khillan

Directorate of Enforcement v. Narinder Khillan, CRM-M-63322-2023, decided on 21 March 2024, neutral citation 2024:PHHC:042300, arose after the Special Judge arranged four days of escorted movement so that a person in custody could collect documents for a response to a Section 8(1) notice before the Adjudicating Authority.

The High Court held that escorted movement remained continuous custody and was neither bail nor interim bail. Paragraphs 20 to 22 approved the Special Court's attempt to enable an effective defence while controlling risks. ED's petition was dismissed, with liberty concerning any alleged violation of the conditions.

The decision recognises a practical component of procedural fairness. A right to answer attachment proceedings can become illusory if a detained person has no reasonable means to locate records, consult relevant persons or assemble the documentary response. A court may design proportionate arrangements without ordering an unconditional release.

The predicate offence remains foundational: Chetan Gupta

In Chetan Gupta v. Directorate of Enforcement, CRM-M-39214-2020 with connected petitions, decided on 29 April 2024, neutral citation 2024:PHHC:057900, the petitioners had been acquitted in the scheduled offence.

The Court applied Vijay Madanlal Choudhary and held that a prosecution for money-laundering cannot continue where the person is finally discharged or acquitted of the scheduled offence and there is no surviving criminal activity capable of generating proceeds of crime. Paragraphs 39 and 40 quashed the consequential PMLA proceedings, while clarifying that a reversal of acquittal could permit ED to proceed in accordance with law.

The judgment also described an ECIR as an internal ED record rather than a statutory equivalent of an FIR. The relief was granted under Section 482 of the Code of Criminal Procedure, 1973. The corresponding inherent-power provision is Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, subject to Section 531 BNSS and the procedural law applicable to the particular pending proceeding.

Section 50 attendance and Article 20(3): Gurpreet Singh Sabharwal

Gurpreet Singh Sabharwal v. State of Haryana, CRM-M-34235-2024, decided on 23 July 2024, neutral citation 2024:PHHC:091841-DB, concerned a request to avoid compulsory participation in an ED investigation after registration of a predicate corruption case.

The Division Bench did not excuse attendance. It directed the petitioner to appear and cooperate pursuant to the summons. At the same time, paragraphs 6 to 12 preserved the protection against compelled self-incrimination under Article 20(3). The petitioner was required to join the investigation but could invoke the constitutional protection in relation to answers that would expose him to a criminal charge.

That distinction matters. Section 50 creates enforceable duties of attendance and truthful response, while Article 20(3) protects a person accused of an offence from testimonial compulsion against himself. The protection is not a general licence to ignore a summons; its application depends on the question, the person's legal position and the incriminating tendency of the compelled response.

Practical implications

For investigators, the safest practice is contemporaneous documentation. The file should identify the material considered, record the authorised officer's reason to believe in the statutory terms, explain why arrest is exercised at that point, furnish written grounds promptly and preserve a clear chronology of voluntary attendance, questioning, search and any restraint.

For remand courts, the decisions require an independent audit rather than a formula. The court should examine whether Section 19 was satisfied, whether the person was produced within the constitutional and statutory period, whether the custody sought has a demonstrated investigative purpose and whether the order records reasons.

For the defence, challenges should be evidence-led. Attendance logs, summons, panchnamas, seizure records, CCTV preservation requests, travel details, arrest memos, written grounds, remand applications and the text of the remand order may establish when restraint began and whether the statutory safeguards operated in time. In attachment proceedings, counsel should document why access to particular records is necessary and propose controlled arrangements proportionate to any legitimate risk.

Conclusion

These judgments do not weaken a lawful PMLA investigation. They separate investigation from unreviewable coercion. Written grounds must be meaningful; search and summons cannot disguise detention; the reason to believe must exist in a contemporaneous statutory record; remand requires judicial application of mind; an effective defence may require controlled access to documents; and the scheduled offence remains the legal foundation for proceeds of crime.

The unifying principle is institutional discipline. ED must justify the exercise of coercive power under the statute, and the Special Court must test that justification independently. At the same time, Neeraj Saluja and Arvind Kejriwal show that judicial scrutiny does not mean automatic invalidation: an arrest supported by compliant, intelligible grounds may survive review.

This article provides general legal information and does not constitute legal advice. The result in any matter depends on the governing record, the procedural law applicable on the relevant date and later appellate developments.

Sources

Supreme Court of India, Pankaj Bansal v. Union of India, 2023 INSC 866, judgment dated 3 October 2023, especially paragraphs 35–40: https://webapi.sci.gov.in/supremecourt/2023/30275/30275_2023_16_1501_47281_Judgement_03-Oct-2023.pdf

Supreme Court of India, Arvind Kejriwal v. Directorate of Enforcement, 2024 INSC 512, Criminal Appeal No. 2493 of 2024, judgment dated 12 July 2024, especially paragraphs 60–84: https://api.sci.gov.in/supremecourt/2024/16350/16350_2024_2_1501_53587_Judgement_12-Jul-2024.pdf

Supreme Court of India, Directorate of Enforcement v. Surender Panwar, SLP (Criminal) No. 17790 of 2024, order dated 2 January 2025.

Punjab and Haryana High Court, Roop Bansal v. Union of India, CWP-23005-2023, 2023:PHHC:138899-DB, judgment dated 31 October 2023: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CWP&case_no=23005&case_year=2023&order_date=2023-10-31&order_type=FINAL

Punjab and Haryana High Court, Pranav Gupta v. Union of India, CWP-24787-2023 and CWP-25048-2023, 2023:PHHC:157511-DB, judgment dated 7 December 2023: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CWP&case_no=24787&case_year=2023&order_date=2023-12-07&order_type=FINAL

Punjab and Haryana High Court, Dilbag Singh alias Dilbag Sandhu v. Union of India, CRM-M-2191-2024 and CRM-M-3385-2024, 2024:PHHC:017817, judgment dated 8 February 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=2191&case_year=2024&order_date=2024-02-08&order_type=FINAL

Punjab and Haryana High Court, Gurinder Pal Singh alias Tinku v. Directorate of Enforcement, CRM-M-10892-2024, 2024:PHHC:036585, judgment dated 14 March 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=10892&case_year=2024&order_date=2024-03-14&order_type=FINAL

Punjab and Haryana High Court, Directorate of Enforcement v. Narinder Khillan, CRM-M-63322-2023, 2024:PHHC:042300, judgment dated 21 March 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=63322&case_year=2023&order_date=2024-03-21&order_type=FINAL

Punjab and Haryana High Court, Chetan Gupta v. Directorate of Enforcement, CRM-M-39214-2020 and connected matters, 2024:PHHC:057900, judgment dated 29 April 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=39214&case_year=2020&order_date=2024-04-29&order_type=FINAL

Punjab and Haryana High Court, Gurpreet Singh Sabharwal v. State of Haryana, CRM-M-34235-2024, 2024:PHHC:091841-DB, judgment dated 23 July 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=34235&case_year=2024&order_date=2024-07-23&order_type=FINAL

Punjab and Haryana High Court, Surender Panwar v. Directorate of Enforcement, CRM-M-41194-2024, 2024:PHHC:125421, judgment dated 23 September 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=41194&case_year=2024&order_date=2024-09-23&order_type=FINAL

Punjab and Haryana High Court, Neeraj Saluja v. Union of India, CRM-M-10124-2024, judgment dated 30 September 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRM-M&case_no=10124&case_year=2024&order_date=2024-09-30&order_type=FINAL

Punjab and Haryana High Court, Balwant Singh v. Directorate of Enforcement, CRWP-9783-2024, 2024:PHHC:149872, judgment dated 18 November 2024: https://livedb9010.phhc.gov.in/public/judgments/order-pdf?case_type=CRWP&case_no=9783&case_year=2024&order_date=2024-11-18&order_type=FINAL

The Prevention of Money-laundering Act, 2002, Sections 19, 44, 45 and 50: https://www.indiacode.nic.in/indiacode/handle/123456789/2036?view_type=browse

The Bharatiya Nagarik Suraksha Sanhita, 2023, Sections 528 and 531: https://www.indiacode.nic.in/handle/123456789/20099

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