The Supreme Court Today (Jan 15) harshly criticized the Enforcement Directorate (ED) for presenting incorrect legal arguments against the statutory exemption for women under Section 45 of the PMLA, stating, “We will not accept actions by the Union of India that involve making arguments contrary to the law.” Granting bail to Shashi Bala, accused in a money laundering case, the court highlighted the importance of adhering to clear legal provisions and denounced the ED’s missteps in the case.
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NEW DELHI: The Supreme Court of India today criticized the Enforcement Directorate (ED) for presenting incorrect legal arguments regarding the Prevention of Money Laundering Act (PMLA). The court emphasized that it will not allow legal arguments that go against the law.
This strong response came during a hearing about the special bail conditions under Section 45 of the PMLA, which do not apply to women.
The Court made this harsh remark while rejecting the ED’s argument that the proviso to Section 45 of the PMLA does not apply to women. The bench stated,
“We will not accept actions by the Union of India that involve making arguments contrary to the law.”
The bench, led by Justice Abhay S. Oka and Justice Ujjal Bhuyan, expressed dissatisfaction after the Solicitor General of India, Tushar Mehta, admitted to a mistake made earlier.
Representing the ED, Mehta apologized, stating that the error came from internal miscommunication.
The Court said that such a stance of the government showed its belief that a person who is arrested under the PMLA has to be denied bail under any circumstance.
“This is a clear intention on the part of the government to see that under hook or crook, bail is denied and therefore such submissions are made,”
-Justice Oka said.
“If the counsel representing the Union of India do not know the basic provisions of law, why should they appear?”
-the Bench asked.
“If Union of India is to make submission contrary to its own statute…there is no question of communication gap. We will not tolerate such conduct on the part of Union of India to make submissions expressly contrary to statute. We will never appreciate such submission made by Union of India,”
-the Court said.
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Previously, the ED had argued that the strict bail conditions applied equally to women, contradicting the law.
In December 2024, the Supreme Court had already corrected another government counsel, the Additional Solicitor General, who had similarly argued that women were not exempt from the harsh bail rules. The Justices pointed out that the law clearly provides exemptions for women from the stringent conditions for bail. They said such errors in interpretation were unacceptable, especially from senior government lawyers.
Justice Oka also criticized the ED’s attempt to make a last-minute plea to file a reply in the case. He called out the government’s legal team for not understanding the basic provisions of the law and for bringing up new arguments late in the process. The court was particularly unhappy with the ED’s approach, which assumed the bench was unaware of the law.
The case involved Shashi Bala, a government school teacher who has been in custody since November 2023. She was accused of helping the Shine City Group of Companies with illegal financial transactions. The ED alleged that the group duped investors with fraudulent schemes and that Bala played a key role in these activities.
Despite the Allahabad High Court’s earlier decision to deny her bail due to the seriousness of her charges, the Supreme Court granted her bail. The court considered that her trial would likely take a long time, as there were 67 witnesses to be examined, and the evidence recording process had not even started. The court ruled in her favor because it believed it was unfair to keep her in custody indefinitely while waiting for the trial to proceed.
This decision highlights the Supreme Court’s commitment to following legal provisions exactly as written. It also sheds light on the challenges of handling complex financial crime cases without compromising the rights guaranteed by law.
The Supreme Court’s message was clear:
“Ignorance of the law or misinterpretation, especially from government counsel, will not be tolerated.”
PREVIOUSLY IN APEX COURT
The Supreme Court on Dec 19 expressed dissatisfaction with the Enforcement Directorate’s (ED) lawyer for presenting arguments that appeared to go against the Prevention of Money Laundering Act, 2002 (PMLA).
The ED argued that strict legal conditions under the law should apply even to vulnerable groups like women, minors, or those who are unwell or physically weak.
The Supreme Court questioned how the ED could argue in a way that contradicts the law’s provisions.
During the hearing, Justice AS Oka directed sharp remarks at the ED’s counsel:
“If the Union argues against the statute, we’ll call the Attorney General to appear. You’re suggesting the proviso won’t apply even to a woman accused. If that’s your stance, argue it now.”
The ED lawyer, however, requested additional time to prepare their arguments.
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This prompted Justice Oka to respond sternly:
“You need time even for your own submissions? We want to understand how you can argue against the statute. And then you’ll claim we didn’t let you argue—lawyers are increasingly making such allegations these days.”
The Additional Solicitor General (ASG), representing the ED, argued that the strict conditions under Clause (2) of Sub-section (1) of Section 45 of the PMLA would still apply. This includes cases involving:
- Women accused of crimes.
- Children under the age of 16.
- Individuals who are sick or physically weak.
The ASG maintained this position despite the proviso in Section 45, which offers exceptions for these vulnerable groups.
When the Supreme Court sought further clarification, the ED lawyer again requested more time.
The court, however, directed the ED to submit a detailed response, known as a counter-affidavit, by January 10, 2024.
CASE TITLE:
Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement | Petition for Special Leave to Appeal (Crl.) No. 16260/2024
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