Bail, jail and a troubling pattern in PMLA cases

Abhir Datt

Securing bail in cases under the PMLA has hitherto been an uphill task for an accused. The point of discord lies in a specific provision of the Act: Section 45. The provision lays down conditions, more popularly known as the “twin conditions”, which an accused needs to meet in order to secure bail. One of the conditions mandates that an accused person in PMLA cases can be granted bail only when he is able to show that he is innocent of the allegations of money laundering. The other condition requires that he is not likely to commit any offence while on bail and that the concerned prosecutor be heard before bail can be granted. These conditions have generally been considered as onerous, as they cast a huge burden on the accused who at the stage of arrest (pending investigation) has minimal knowledge of the prosecution’s case and insufficient material to proffer his innocence. The aforesaid provision is directly at variance with the general bail jurisprudence in India. Prolonged incarceration pending trial would be considered anathema to the constitutional right to life and personal liberty as envisaged by our Constitution.

Section 45, therefore, proved to be a potent tool in the hands of the Enforcement Directorate’s (ED) officers and prosecutors. Several bail applications in money-laundering cases have been dismissed over the years. One such case is that of Rohit Tandon v The Directorate of Enforcement (2017), where the Supreme Court said that while deciding bail applications of undertrials in cases under PMLA, the test of Section 45 has to primarily be met, and other considerations such as delay in trial, long incarceration, and the otherwise prevalent bail jurisprudence, were irrelevant.

However, with time, the strict interpretation of Section 45 was gradually diluted and rightfully so. In this regard, one can refer to the dictum of the Supreme Court in Vijay Madanlal Chaudhary v Union of India (2022), which while considered to be a judgment upholding the expansive powers of the ED, also has a few useful nuggets for the defence. The Supreme Court opined that there is no absolute restraint for grant of bail in PMLA cases and that the test of Section 45 has to be met on broad parameters, that is to say that an accused has to broadly show his innocence, without the Court having to extensively examine the evidence relied upon by the ED. The said view was based on judgments delivered by the apex court on prior occasions, wherein it took a similar view in other legislation involving similar onerous conditions for bail, such as the Maharashtra Control of Organised Crime Act, 1999, the Narcotic Drugs and Psychotropic Substances Act, 1985, etc.

The judgement in Vijay Madanlal Chaudhary provided a precedent for courts to grant bail. For instance, the High Court of Bombay, after relying on Vijay Madanlal, granted bail to Nationalist Congress Party’s Anil Deshmukh in a detailed and well-reasoned order (2022). The High Court of Delhi granted bail on several occasions such as in Ramesh Manglani v The Directorate of Enforcement (2023), Raman Bhuraria v The Directorate of Enforcement (2023), Avtar Singh Kocchar v The Directorate of Enforcement (2023), Sanjay Jain v The Directorate of Enforcement (2024). Progressive judgments and orders in favour of an accused started becoming the trend, and the interpretation of Section 45 as laid down in Vijay Madanlal became the norm.

Subsequently, a further shift came in the bail jurisprudence with the Supreme Court granting bail to ex-Deputy CM of Delhi Manish Sisodia (in Manish Sisodia v The Directorate of Enforcement), where it held that in cases where there is an apparent delay with no likelihood of completion of trial in the near future, bail ought to be granted to the accused, despite the rigours of Section 45. The apex court held, and rightly so, that Article 21 of the Constitution of India which deals with the fundamental right to life and liberty, includes within itself the right of an accused to a speedy trial, and in case of prolonged incarceration, where the trial is unlikely to conclude expeditiously, bail ought to be granted. The Court heavily relied on Union of India v K A Najeeb (2021) where the grant of bail to an accused in a case under the Unlawful Activities (Prevention) Act, 1967 (which has a provision similar to Section 45 of the PMLA) was upheld, and was granted on the basis of delay in trial and in the spirit of Article 21 of the Constitution.

The right to speedy trial coupled with a substantial period of incarceration as an undertrial, being valid considerations for grant of bail, started becoming the norm. In multiple cases such as Prem Prakash v Union of India (2024), V Senthil Balaji v The Directorate of Enforcement (2024), and Ramkripal Meena v The Directorate of Enforcement (2024), the Supreme Court gave the benefit of bail, primarily on the basis of delay in trial and infringement of Article 21. For instance, in V Senthil Balaji, their Lordships held that inordinate delay in conclusion of the trial and the higher threshold provided under Section 45 cannot co-exist and the same cannot become a tool used to incarcerate an accused without trial for an unreasonably long time

Hopefully, the decision in Kanhaiya Prasad will be taken to have passed keeping in mind the peculiar facts of that case and not a definitive view on the interpretation of Section 45 of the PMLA, so as to not deter courts from exercising discretion in favour of an accused person. The recent positive exposition and interpretation of Section 45 in V Senthil Balaji and Manish Sisodia, as discussed above, ought to be welcomed and uniformly applied by the Supreme Court and the various courts subordinate thereto in future.

The writer is a lawyer practicing in Delhi