In a major relief to thousands of undertrials, the Supreme Court on November 23, 2017 very rightly struck down a draconian provision which can deny a person bail even if there is reasonable ground to believe that he or she did not commit the offence of money laundering. We are living in a democratic country in which every person has the right to live a free life. The State has no right to deny any person the right to live a free life on the slightest pretext just on the suspicion of having committed the offence of money laundering.
Noting that the history of bail practices traces back to the Magna Carta, the Apex Court declared the draconian Section 45(1) of the Prevention of Money Laundering Act (PMLA) of 2002 violative of the fundamental rights to equality, life and personal liberty guaranteed under the Constitution. How can then it be allowed to continue? This alone explains why Supreme Court has very rightly dumped the draconian Section 45(1) of the PMLA which arbitrarily denies bail without any reasonable grounds whatsoever! There can be no denying this!
While craving for the exclusive indulgence of my esteemed readers, let me inform them that a Bench of Justices Rohinton Nariman and SK Kaul, in their judgment, passed a general direction to courts to take up thousands of cases of undertrials who have been languishing in prisons, unable to get bail, because they did not satisfy the twin conditions under Section 45(1) of the PMLA. By all accounts, this is a landmark order which will benefit thousands of undertrials who will thus be set free and live a normal live just like all others! It certainly deserves unqualified appreciation because if this order had not been passed, many undertrials especially those who are poor would have continued to languish in jail for a long time!
For my esteemed readers exclusive indulgence, let me also inform them that a Bench of Justices RF Nariman and Sanjay Kishan Kaul held Section 45(1) arbitrary and unjust because it allowed a Judge to deny bail to an accused charged with an offence that is punishable with more than three years in prison. It was held that, “We declare Section 45(1) of the Prevention of Money Laundering Act, 2002, in so far as it imposes two further conditions for release on bail, to be unconstitutional as it violates Article 14 and 21 of the Constitution of India”. As per Section 45(1), an accused could get bail only after the public prosecutor is given an opportunity to oppose the application and if the court is satisfied that the person is neither guilty of the alleged offence nor likely to commit the crime again on his or her release. Secondly, the court should reasonably believe that he is not guilty of the “predicate” offence for which he received the laundered money as proceeds of the crime. The Apex Court set aside all orders by which bail to an accused was denied due to the twin conditions and directed that such cases be remanded back to the respective courts to be heard on merits.
Going forward, let me also reveal here that “predicate” offences include a range of crimes from 26 different laws from waging war against the Government of India to offences under the Narcotic Drugs and Psychotropic Substances Act, the Indian Penal Code to Wildlife Protection Act, Prevention of Corruption Act, Child Labour Law, etc. The Modi government had stoutly defended the stringent conditions on the ground that it was an attempt by the Parliament to get back the black money siphoned off from the economy. But the Apex Court held explicitly that the law leads to “manifestly arbitrary and unjust results and, therefore, violates Articles 14 (right to equality) and 21 (right to liberty) of the Constitution.” Justice RF Nariman, who authored the verdict, said Section 45(1) was violative of Article 14.
Truth be told, the Supreme Court’s landmark judgment came on a clutch of petitions challenging the validity of Section 45(1) of the Prevention of Money Laundering Act. It must be noted here that the petitioners in the case had moved the top court after they were denied bail following the twin conditions. The petitioners argued that they were wrongly denied bail.
As it turned out, the Apex Court gave them the liberty to approach the trial court afresh and said their bail petitions should be heard and decided expeditiously thus bringing a fresh smile on their face. It must be recalled here that the Prevention of Money Laundering Act, 2002 was introduced to make money laundering an offence and to attach property involved in money laundering. It was aimed to adequately deal with the serious threat to the financial system of India.
To put things in perspective, though the PMLA Act was passed by the Parliament in 2002, it was brought into force only in August 2005. Thus, in other words, it started functioning only from August 2005. It must be borne in mind that the Scheduled offences defined in PMLA comprise various offences, including some under Indian Penal Code, anti-drug law, Explosive Substances Act, Arms Act, Wildlife (Protection) Act, Immoral Traffic (Prevention) Act, Prevention of Corruption Act and Antiquities and Arts Treasures Act.
Be it noted, it was argued before the top court by the petitioners that the two conditions made grant of bail virtually impossible in money laundering cases. Also, to satisfy them the accused will have to disclose their defence at a point in time when they are unable to do so. On its part the government urged the top court not to strike down the provision but read it down to make it constitutional.
However, the government’s argument was not accepted by the top court, which rightly said the provision had no rational relation with the grant of bail for the offence of money laundering. The two-Judge Bench of Apex Court pointed out a glaring anomaly pertaining to the bail provisions. Such stringent conditions of bail being granted only if the court is convinced that the accused is not guilty are not applicable when someone applies for anticipatory bail to prevent being taken into custody for charges of money laundering and what is worse is that once arrested, his sliver of hope of his/her chances of getting bail shall stand banished!
In hindsight, the Apex Court, while hearing a batch of petitions and appeals challenging the constitutional validity of Section 45 of PMLA termed it as a “drastic provision” which turns on its head the presumption of innocence which is fundamental to a person accused of any offence. It also said that, “Before applying such a Section which makes ‘drastic inroads’ into the fundamental right of a personal liberty under Article 21, we must be doubly sure that such provision furthers a compelling state interest for tackling serious crime.” It further went on to say that, “Without any such compelling state interest, the indiscriminate application of the provisions of Section 45 will certainly violate Article 21 of the Constitution. Provisions akin to Section 45 have only been upheld on the ground that there is a compelling state interest in tackling crimes of an extremely heinous nature. Merely ‘reading down’ the two conditions would not get rid of the ‘vice of manifest arbitrariness and discrimination’.”
Needless to say, the Apex Court also very rightly pointed to one of the anomalies in Section 45 and said that anticipatory bail could be granted to a person who is prosecuted for the offence of money laundering which may last throughout the trial of the case against him. It said if the person is arrested for the offence of money laundering, then in order to seek regular bail, Section 45 will apply, which was an anomalous situation. So it had to be set right which was done!
So, on a concluding note, it can well be rightly said that this landmark judgment validates what once legendary and most learned Judge of Supreme Court of India – Justice VR Krishna Iyer once famously said in a case that, “Bail shall be the rule and jail shall be the exception”! It must be welcomed with both hands by one and all! It will certainly ensure that thousands of undertrials don’t keep languishing in jail just because of this draconian PMLA clause Section 45(1) which has rightly been dumped by the highest court of India and are able to lead a normal life just like all other countryfellows! There is no reason why this landmark judgment should be not appreciated in most grandiloquent terms!
Sanjeev Sirohi, Advocate,
s/o Col BPS Sirohi,
A 82, Defence Enclave,
Sardhana Road, Kankerkhera,
Meerut – 250001, Uttar Pradesh.