Name: Kajal Jain
Edited by- Biraj Kumar Sarkar
INTRODUCTION
“The issue of bail is one of liberty, justice, public safety and burden of the public treasury, all of which insist that a developed jurisprudence of bail is integral to a socially sensitized judicial process”[1]
Recently on June 21, the ED (Enforcement Directorate) moved to Delhi court opposing Kejriwal’s release, and the High Court dismissed his bail application. Kejriwal was arrested by the ED on 21 March on the grounds of violation of Section- 19 of PMLA 2002. [2]and after that, he was granted interim bail in the Liquor Policy case till June 1, 2024, to campaign for Lok Sabha elections, currently, he is still jail.
Meaning, Definition & Explanation
Bail is a temporary release of an accused of a crime in exchange for Security (money etc). There are commonly three types of bail- Regular, Interim, and Anticipatory. Regular bail is for a person who is under arrest or in the custody of the police, it’s under sections “437 and 439 of CrPC”[3]. Interim bail is granted for a short period and is granted before the regular and anticipatory bail. Anticipatory bail is given either by session court or High court and is filed by the person who is perceived that he may get arrested.
Kejriwal was granted Interim bail and it’s almost impossible for someone to get bail under PMLA due to its twin conditions, an accused can still get bail if he can produce evidence proving that he is not guilty and that he is not likely to commit any offense during the period of bail. Section 45 of PMLA
Prevention of Money Laundering Act, 2002 was enacted in 2003, it came into existence to combat money laundering cases. It has three main objectives- to control and prevent money laundering, to seize and confiscate property obtained by money laundering, and to deal with other issues related to money Laundering.
Section 45 of PMLA (Prevention of Money Laundering Act)-
- Bail is not a rule but an exception under PMLA and it states that only the apex court can grant bail in such a provision.
- It is mandatory to hear the public prosecutor in all bail applications when the prosecutor opposes the bail.
Section 45:” According to Section 45 of the PMLA, -bail can be granted to an accused in a money laundering case only if twin conditions are satisfied- there should be prima facie satisfaction that the accused has not committed the offense and that he is not likely to commit any offense while on bail”[4]
The conditions of the Bail Provision of PMLA are stated under Section 453 which states conditions for bail and there are stringent norms applied in it. The two conditions are also known as the twin test. Section 45
Legal challenges
- 2017 ruling “Nikesh Tarachand Shah vs Union of India”[5]– the court held the twin test provision as unconstitutional as it failed the test of reasonable classification
- Finance Act, 2018 [6]( Reintroduction of this provision)- The twin test provision was re-introduced which resulted in more legal challenges.
Cases–
- Nikesh Tarachand Shah vs. UOI & ANR
In this case Supreme Court struck down section 45(1) of PMLA,2002, and added the two conditions under Part A schedule of PMLA on the offenses that have imprisonment of 3 or more years. The conditions under this provision were that opportunity will be provided to the prosecutor to oppose any application for bail, the court while giving bail must be satisfied that there are reasonable grounds for believing that the accused is not guilty of such offenses and he is not likely to commit any offense while being on bail period.
The court held that the twin conditions under Section45(1) were discriminatory and arbitrary in nature and should not be applied while granting bail.
Application of section 45(1) states that the same offense has been tried under different cases which end up with different results. And while granting bail presumption of innocence is always there, whereas there is no such presumption mentioned in section 45 and it has also inverted the conditions.
- Vinod Bhandari v. Assistant Director, Directorate of Enforcement, 2018 [7]–
It was held that “the contention advanced by the learned ASG cannot be accepted. It is to be further noted here that, the original Sub-section 45(1) (ii) has therefore neither been revived nor resurrected by the Amending Act and, therefore, as of today there is no rigor of said two further conditions under the original Section 45(1)(ii) of PMLA Act for releasing the accused on bail under the said Act.”4 (Challenges the applicability of twin conditions under section 45(1) PMLA post amendment.
- Vijay Mandanlal Choudhary vs. UOI,2022[8]
The court emphasized the perception of parliament regarding the seriousness of money laundering and its threats to national sovereignty and integrity. The court upheld a special provision of PMLA, including the “twin bail condition” under Section- 45 of the Act, which was struck down.
- Chidambaram vs. ED, 2019[9]
In this case, the Court laid down the guidelines that must be considered while refusing or granting bail. Triple Test- (i) Presence of Accuse, (ii) Nature of Evidence, and (iii) Deep roots.
- Current Position- The twin test must be strictly applied to all courts in both regular and anticipatory bail.
Anti-Money Laundering Provisions worldwide
Money Laundering is a global concern that affects both society and the economy and to prevent this, these countries globally have anti-money laundering provisions –
- In the US, to combat money laundering cases “FinCEN (Financial Crime Enforcement Network)” was established, and “AML (anti-money laundering )” laws are very stringent in the US.
- In Singapore, AML is governed by” the MAS (Monetary Authority of Singapore)” and it is committed to combating money laundering
- In the Philippines, Anti-money laundering regulations are governed by “AMLA (Anti Money Laundering Act)” and there is a separate council “AMLC (Anti-money Laundering Council)” to investigate and prosecute money.
- In Australia, there is the “(AML/CTF Act) Anti Money Laundering and Counter-Terrorism Financing Act” which governs Money Laundering provisions in Australia
- In the Middle East, countries are strengthening their Money Laundering provisions. In UAE, it is governed by the “(FIU) Financial Intelligence Unit” and this regulates reporting and other related things to money laundering.
- In the UK, there is a “(POCA) Proceeds of Crime Act and Money Laundering” Regulation to govern this law and there is a separate agency/ authority- the National Crime Agency for investigating.
CONCLUSION & COMMENTS
To conclude Bail under PMLA is almost impossible to get but it is still possible to get and courts have made various amendments and changes in the bail provisions throughout many years and changes are still going on. Indian laws have this flexible structure and at the same time, it’s rigid which makes it possible for them to change and amend the provisions. It is a complex mixture and interplay of imperative financial crimes and individual rights and liberty, and all forms of government need to equally play their roles in these cases. PMLA has stringent provisions so applying bail provision should be balanced. This balance will enhance the legal framework and also reinforce public confidence.
REFERENCES
- Online Articles / Sources Referred
- Indian Kanoon
- Live law
- Bar and bench
- Cases Referred
- Chidambaram vs. ED, 2019
- Vijay Mandanlal Choudhary vs. UOI,2022
- Vinod Bhandari v. Assistant Director, Directorate of Enforcement, 2018
- Nikesh Tarachand Shah vs. UOI & ANR
- Statutes Referred
- PMLA ( Prevention of Money Laundering Act)
- CrPC now BNSS
ENDNOTES
[1] https://main.sci.gov.in/jonew/judis/5183.pdf
[2]https://indiacode.nic.in/handle/123456789/2036?sam_handle=123456789/1362
[3]https://www.indiacode.nic.in/bitstream/123456789/15272/1/the_code_of_criminal_procedure,_1973.pdf
[4] https://www.livelaw.in/supreme-court/pmla-accused-need-not-fulfill-s45-conditions-when-furnishing-bond-after-appearing-before-trial-court-as-per-summons-supreme-court-258075#:~:text=According%20to%20Section%2045%20of,any%20offence%20while%20on%20bail.
[5] https://main.sci.gov.in/supremecourt/2017/13393/13393_2017_Judgement_23-Nov-2017.pdf
[6] https://dea.gov.in/sites/default/files/frbm_amendment_acts_2018.pdf
[7] https://indiankanoon.org/doc/149592740/
[8] https://indiankanoon.org/doc/14485072/
[9] https://indiankanoon.org/doc/42679608/
