Today, 30th April, The Supreme Court ruled that the twin tests under the Prevention of Money Laundering Act (PMLA) can indeed affect the grant of bail to the accused. These tests involve a prima facie case and the existence of credible evidence. The decision reinforces the stringent nature of bail considerations in cases involving economic offenses under the PMLA.
New Delhi: The Supreme Court of India on Tuesday concluded its session on the debate regarding whether the stringent bail conditions under the Prevention of Money Laundering Act (PMLA) should still apply after a special court acknowledged the offence. During the hearing, Justices Abhay S Oka and Ujjal Bhuyan shared their preliminary views, emphasizing the comprehensive authority of a criminal court in these matters.
Justice Oka articulated,
“If you respond to the summons, arrest isn’t on the table. However, failure to appear could prompt the court to issue a warrant. Our condition is that if further investigation or remand is necessary, it should be managed exclusively through the special court. Once the offence is recognized, all jurisdiction, including the power to remand, is vested in the criminal court.”
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The Supreme Court scrutinizing whether an individual, not arrested during the preliminary investigation under the PMLA but later charged following a special court’s recognition of the Enforcement Directorate’s (ED) complaint, obliged to satisfy the PMLA’s rigorous bail conditions.
A significant query raised by the court is whether such an accused can seek bail under the standard provisions of the Code of Criminal Procedure (CrPC) following their appearance in response to the special court’s summons. The possibility of the ED arresting the accused post-complaint acknowledgment is another issue under review.
Representing the ED, the counsel argued that the agency retains the authority to arrest if further evidence emerges.
Highlighting the agency’s limitations once a complaint is filed, Justice Oka previously noted,
“Upon filing of the complaint, the ED loses the power to arrest; that authority rests solely with the court. In such instances, without a court order, arrests cannot be made.”
Section 45 of the PMLA mandates a court to consider the Public Prosecutor’s opposition to a bail request, allowing the release of the accused only if it believes there, reasonable grounds for not being guilty and that the individual is unlikely to commit any further offences while on bail.
This legal discourse stems from a decision by the Punjab and Haryana High Court, which refused pre-arrest bail to several individuals implicated in a money laundering case tied to a supposed land scam involving revenue officials. The Supreme Court previously granted these accused interim protection in January.
In a landmark move, the Supreme Court invalidated Section 45(1) of the PMLA in November 2017, concerning the additional conditions for bail. This decision later reversed by an amendment from the Centre, and further confirmed by the Supreme Court in July 2022 in the case of Vijay Madanlal Choudhary v. Union of India, a decision that sparked substantial debate and led to numerous review petitions.
Reflecting on this controversy, retired Supreme Court judge Justice Rohinton Fali Nariman last year termed the 2022 decision “very unfortunate,” a sentiment echoed by former Chief Justice of India UU Lalit, who reaffirmed the principle of presumed innocence in Indian criminal jurisprudence.