While upholding the right to privacy in 2017, the Supreme Court overruled the decision in ADM Jabalpur v. Shivkant Shukla (1976). However, the recent decision in Vijay Madanlal Choudhary v. Union of India, upholding the constitutionality of the Prevention of Money Laundering Act (PMLA), is proof that the ghost of ADM Jabalpur has been resurrected. The old maxim of bail being the norm and jail the exception has been judicially cremated with this decision. Bail is now not even an exception; it is impossible.
Draconian preconditions for bail
First, consider the draconian preconditions for the grant of bail in Section 45 of the PMLA. To be eligible for bail, the arrested person must persuade the court that there are reasonable grounds for believing that he is not guilty of the money laundering offences brought by the Enforcement Directorate (ED). The onus is on the accused to prove that an event did not transpire. If he cannot do this, he will continue to languish in jail.
To justify this high bar, the court overturned its decision in Nikesh Tarachand Shah v. Union of India (2017) that had directed treating the offence of ‘money laundering’ as less heinous and therefore differently a crime from ‘terrorism’ under the Terrorist and Disruptive Activities (Prevention) Act (TADA). The court stated that the offence of money laundering was as heinous as a terrorist act and as great a danger to the sovereignty and integrity of our country. In doing so, it ignored the fact that under the PMLA, money laundering also covers monies associated with offences relating to infringement of copyrights and trademarks, arts and antiquities, securities, information technology, companies, and air and water pollution.
The court also declared that the ED does not need to share the Enforcement Case Information Report (ECIR) with the accused. This is bizarre because the same notion of secrecy is not applicable to equivalent documents (FIRs) for agencies like the police and the Central Bureau of Investigation. The ECIR contains the rationale for the ED to register the offence. However, the court chose not to equate the ECIR with an FIR.
According to the court, the fundamental fights of the accused are satisfied if he is informed of the grounds of arrest at the time of arrest. However, there is no definition of what qualifies as grounds for arrest and how detailed such grounds need to be. Typically, criminal arrest memos will only inform the accused of the Section(s) under which the alleged offence is committed. Now, with the ED informing the accused that the arrest is on account of an offence under one or more Sections of the PMLA, the court seems to have judged that the fundamental rights of the accused have been upheld.
Rendering bail impossible
Put together, this means that once a person has been arrested under the PMLA, in order to get bail, he will have to show that he has not committed the offence that he stands accused of and he will also be unaware of the specifics of the offence he is alleged to have committed. He is oblivious of the transactions being investigated or the assets being labelled proceeds of crime. This renders bail impossible.
No judge can ever take the view that an accused has prima facie shown that he has not done what the ECIR alleges because no accused will ever be able to prove this if he does not even know what the ECIR contains. The result is that no accused will ever be able to obtain bail under the PMLA once the ED decides that he has committed an offence. To add to it, the accused can be ‘persuaded’ to sign confessional statements while in custody. Since the judgment considers the confessional statement to be admissible evidence, such evidence can be presented to the judge at a bail hearing as well.
The problem is compounded by the decision in NIA v. Zahoor Watali (2019), in which the court was considering the bail standard under the Unlawful Activities (Prevention) Act. It held that at the stage of bail, the court cannot enter into an appreciation of evidence, but only has to see whether a prima facie case against the accused is made out. But it also effectively held that in considering the prima facie case, the prosecution’s version is sufficient, and that if the case diary or the charge sheet makes out sufficient grounds to deny bail (which it will, being a document created by the prosecution), it is reasonable to deny bail. Notwithstanding this, the UAPA accused is provided with a copy of the FIR, unlike the PMLA accused.
Comment | PMLA verdict — due process will be bulldozed
This means that when someone is arrested for an offence under the PMLA, he will be placed in prolonged incarceration without being told the specifics of why this is so. And no court will ever be able to reasonably conclude that the person is entitled to bail under the law as it now stands. ADM Jabalpur is dead. Long live ADM Jabalpur.
Prateek Chadha is an Advocate on Record at the Supreme Court. He appeared for some petitioners in Vijay Madanlal Choudhary v. Union of India
