The Supreme Court on Thursday struck down a 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.
Noting that the history of bail practices traces back to the Magna Carta, the apex court declared 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.
A Bench of Justices Rohinton Nariman and S.K. Kaul, in their judgment, passed a general direction to courts in the land 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.
“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,” the Supreme Court directed.
Section 45(1) laid down twin draconian conditions for bail. One, the accused is worthy of bail only if the prosecutor opposes his plea. 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.
These twin conditions apply for an accused suspected of a predicate offence which attracts a punishment of over three years. These 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.
Justice Nariman pointed out that Section 45(1) can be used to deny bail to an accused under PMLA even if there were reasonable grounds to believe that he was not guilty of money laundering, but there were grounds to believe that he may be guilty of the predicate offence.
The court points out that even in the most draconian Acts like TADA, the decision to grant bail is based solely on the question whether the accused is guilty of the particular offence – that is terrorism – enumerated in that Act and not any other.
Justice Nariman, who authored the verdict, said Section 45(1) was violative of Article 14, both in its discriminatory aspect and its “manifestly arbitrary” aspect.
The court found that Section 45(1) does not serve the purpose of PMLA. That is, to return black or illegally earned money back to the society.
“...a classification based on sentence of imprisonment of more than three years would have no rational relation to the object of attaching and bringing back into the economy large amounts by way of proceeds of crime,” the court held.
