Supreme Court Strikes down provision Imposing Twin Condition for granting Bail under Sec. 45 of PMLA [Read Judgment]

A two-judge bench of the Supreme Court today struck down the provisions of Section 45(1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions for release on bail, to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India.

As per section 45(1) of the Prevention of Money Laundering Act, bail can be granted upon fulfillment of two conditions, namely., the Public Prosecutor must be given an opportunity to oppose any application for release on bail and the Court must be satisfied, where the Public Prosecutor opposes the application, that there are reasonable grounds for believing that the accused is not guilty of such offence, and that he is not likely to commit any offence while on bail.

The petitioners urged that the provision violates Article 14 of the Constitution since it is discriminatory and “manifestly arbitrary”.

The bench comprising Justice R.F Nariman and Justice Sanjay Kishan Kaul noted that under this provision, a person who may have nothing to do with the offence of money laundering may yet be denied bail, because of the twin conditions that have to be satisfied under Section 45(1) of the 2002 Act.

Analyzing provisions in detail, the bench observed “that manifestly arbitrary, discriminatory and unjust results would arise on the application or non-application of Section 45, and would directly violate Articles 14 and 21, inasmuch as the procedure for bail would become harsh, burdensome, wrongful and discriminatory depending upon whether a person is being tried for an offence which also happens to be an offence under Part A of the Schedule, or an offence under Part A of the Schedule together with an offence under the 2002 Act. Obviously, the grant of bail would depend upon a circumstance which has nothing to do with the offence of money laundering. On this ground alone, Section 45 would have to be struck down as being manifestly arbitrary and providing a procedure which is not fair or just and would, thus, violate both Articles 14 and 21 of the Constitution.”

The bench further pointed out if a person is charged with extortion under Sections 386 or 388, (such sections being included in Part A of the Schedule) and Section 4 of the 2002 Act, the person prosecuted under these sections would only be able to obtain bail after meeting the stringent conditions specified in Section 45. According to the bench, this would also make the provision arbitrary.

After declaring the provision as unconstitutional, the bench added that “All the matters before us in which bail has been denied, because of the presence of the twin conditions contained in Section 45, will now go back to the respective Courts which denied bail. All such orders are set aside, and the cases remanded to the respective Courts to be heard on merits, without application of the twin conditions contained in Section 45 of the 2002 Act. Considering that persons are languishing in jail and that personal liberty is involved, all these matters are to be taken up at the earliest by the respective Courts for fresh decision.”