Cancelling two arrests in a money-laundering case, the Supreme Court, in a sharp rebuke for the Enforcement Directorate, said the probe agency could not be vindictive and must be seen to act with the highest degree of fairness.

The Supreme Court on Tuesday set aside the arrest of Basant Bansal and Pankaj Bansal, directors of Gurugram-based realty group M3M, in a money laundering case. The Bansals had approached the court against a Punjab and Haryana High Court order dismissing their request for bail in June.

The top court noted that the Bansals were summoned on June 14 for questioning and were arrested in another case registered by the Enforcement Directorate on the same day.

“Every action of the ED is expected to be transparent, above board and conforming to pristine standards of fair play in action,” the Supreme Court said in its judgment, uploaded today.

In this case, the facts demonstrated that the probe agency “failed to discharge its functions and exercise its powers”, said the court.

“ED is not expected to be vindictive in its conduct and must be seen to be acting with utmost probity and with the highest degree of dispassion and fairness,” said the judges.

The failure of the accused to respond to questions put to them could not be sufficient grounds for arrest by the Enforcement Directorate, they asserted.

The Enforcement Directorate, they said, had to specifically find reason to believe that the accused are guilty of an offence under the Prevention of Money Laundering Act, the Supreme Court said, adding: “Mere non-cooperation in response to the summons would not be enough to arrest anyone. It is not open to the ED to expect an admission of guilt from the person summoned for interrogation.”

Basant and Pankaj Bansal were arrested by the Enforcement Directorate in an alleged bribery case against a former special judge for ED, Sudhir Parmar and his nephew Roop Kumar Bansal, a third director of the reality firm.

The Enforcement Directorate said there was “reliable information” that Sudhir Parmar was showing favouritism to Roop Kumar Bansal, and his brother Basant Bansal.

Basant and Pankaj Bansal were summoned in connection with the investigation, and later arrested.