SC junks PMLA tough bail clause

Dealing a blow to the Centre and its fight against black money, the Supreme Court (SC) on Thursday struck down a Section that imposed stringent provisions for bail under the Prevention of Money Laundering Act (PMLA), 2002.

The judgment came on the heels of a batch of petitions.

The bench comprised Justices Rohinton Nariman and Sanjay Kisan Kaul. The petitions challenged the validity of Section 45 under the PMLA that essentially said the accused was guilty until proven innocent and where jail was the rule, bail the exception.

"It is obvious that the twin conditions set down in Section 45 are a much higher threshold bar," it said.

In fact, the presumption of innocence, which is attached to any person being prosecuted of an offence, is inverted by the conditions specified in Section 45, whereas for grant of ordinary bail the presumption of innocence attaches… Under Section 45, the Court must be satisfied that there are reasonable grounds to believe that the person is not guilty of such offence and that he is not likely to commit any offence while on bail," the judgment read.

In the 78-page judgment, which will bring relief to those seeking bail under PMLA in the aftermath of demonetisation, the bench observed: "Section 45 is a drastic provision which turns on its head the presumption of innocence which is fundamental to a person accused of any offence."

The bench observed that the provisions under the now defunct Section 45 must be applied by the state only in compelling cases where it is tackling serious offences like organised crime or terrorism. "Before the application of a section, which makes drastic inroads into the fundamental right of personal liberty guaranteed by Article 21 of the Constitution of India, we must be doubly sure that such provision furthers a compelling State interest for tackling serious crime."

The court said, "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."

Appearing for the petitioners, senior advocate Mukul Rohatgi argued that Section 45 of the said Act imposes two further conditions before grant of bail is manifestly arbitrary, discriminatory and violative of the petitioner's fundamental rights under Article 14 (equality before law) read with Article 21(right to life) of the Constitution.

However, Attorney General K K Venugopal, appearing for the Centre, defended the provision, suggesting it was an effective tool against the menace of black money.

The bench opined that simply reading down section 45 would not be enough, it needed to be struck down.

The court then set aside the orders denying bail that relied on the twin conditions and directed the trial courts to revisit the case based on the merits of the file based on new conditions.

The top court relied on the US constitution's eighth amendment on bail jurisprudence to decide the matter at hand.

Justice Nariman -- who penned the judgment, was inspired by a sharply worded minority judgment of Justice Marshall, with whom Justice Brennan agreed, the minority held that the Bail Reform Act, which permitted pre-trial detention on the ground that the person arrested is likely to commit future crimes would violate substantive due process and the 8th amendment to the US Constitution.

The petitions said...

The present writ petitions and appeals raise the question of the constitutional validity of Section 45 of the Prevention of Money Laundering Act, 2002. Section 45(1) imposes two conditions for grant of bail where an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule to Act is involved. The conditions are that 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.