Seriousness Of UAPA Predicate Offence Can't Justify Prolonged PMLA Custody, Article 21 Not Eclipsed: Delhi High Court Grants Bail
The Delhi High Court has observed that the seriousness of allegations in a predicate case under the Unlawful Activities (Prevention) Act cannot, by itself, justify prolonged incarceration in a separate proceedings under the Prevention of Money Laundering Act (PMLA).“Seriousness cannot be the complete answer to the length of custody in the PMLA case,” Justice Sanjeev Narula observed. The...
The Delhi High Court has observed that the seriousness of allegations in a predicate case under the Unlawful Activities (Prevention) Act cannot, by itself, justify prolonged incarceration in a separate proceedings under the Prevention of Money Laundering Act (PMLA).
“Seriousness cannot be the complete answer to the length of custody in the PMLA case,” Justice Sanjeev Narula observed.
The Court made the observation while granting bail to alleged Naga insurgent Masasasong Ao in a money laundering case who had remained in custody for nearly four years in a PMLA case arising from a UAPA case over allegations of extortion and terror funding. He had been in custody in a PMLA case since October 2022.
“The two prosecutions are distinct, and the maximum punishment with which this Court is presently concerned remains seven years. Arvind Dham reiterates that Article 21 is not eclipsed by the nature of the accusation,” the Court said.
It also held that the rigours of Section 45 of the Prevention of Money Laundering Act (PMLA) cannot be permitted to result in indefinite pre-trial detention of an accused and that Article 21 of the Constitution of India remains the governing constitutional command.
The Court also observed that prolonged incarceration, particularly where the trial is unlikely to conclude within a reasonable time, may warrant grant of bail to protect the constitutional guarantee of personal liberty of the accused under Article 21 of the Constitution of India.
“…. where an accused has remained in custody for a substantial period and the trial is unlikely to conclude within a reasonable time, the restrictions under Section 45 may yield to the imperative of protecting conditional liberty. Pre-trial detention cannot be permitted to assume a punitive character; Article 21 remains the governing constitutional command,” the Court said.
The Court noted that while Section 45 of PMLA imposes stringent conditions for grant of bail, the enquiry at the bail stage is confined to assessing, on broad probabilities, whether there are reasonable grounds for believing that the accused is not guilty and is unlikely to commit an offence while on bail.
It added that the Court is not required to conduct a meticulous examination of evidence or return a final finding on innocence at this stage.
The Court further observed that the mere routing of allegedly tainted money through a bank account standing in the name of an accused does not, by itself, establish an offence under Section 3 of the PMLA.
“What the prosecution must ultimately establish is the Applicant's involvement, directly or indirectly, in a process or activity connected with proceeds of crime,” the Court said.
The ED had relied upon several financial transactions, including withdrawals and deposits allegedly undertaken by the applicant, transactions after the arrest of co-accused Alemla Jamir and a statement alleging that the applicant had directed transfer of funds.
Granting bail to the applicant, the Court held that the material did prima facie support the prosecution case but found that the applicant's explanation, that the accounts were substantially controlled and operated by Jamir, could not at the bail stage be dismissed as a bare denial.
“Whether these circumstances establish that he knew the criminal source of the funds and consciously participated in their laundering is not self-evident merely from the movement of money; that inference will have to be tested with the evidence at trial,” the Court said.
Further, the judge noted that the applicant had been in custody since October 18, 2022 and that against the maximum punishment of seven years prescribed under Section 4 of the PMLA, he had crossed one-half of the maximum sentence on April 18.
It also noted that as of July 23, he had undergone three years, nine months and six days in custody and was approaching four years of incarceration.
On this, the Court observed that Section 436A of the CrPC does not confer an absolute right to release on bail merely upon completion of half the maximum sentence. However, it is a beneficial provision founded upon the constitutional right to a speedy trial under Article 21 and assumes significance when an accused has undergone half of the maximum period of imprisonment while the trial remains pending.
The Court noted that the prosecution had cited 27 witnesses and of July, only five witnesses had been examined.
“Nothing on record suggests that the trial is nearing conclusion,” the Court observed. It further found that there was nothing to suggest that the delay was attributable to the applicant.
The Court accordingly held that while the ED had material requiring consideration at trial, the investigation against the applicant was complete, the relevant financial records had already been secured, and there was no material suggesting that he was likely to re-offend or that the trial could not be protected through conditions.
“To continue the Applicant's detention until an uncertain end of trial would allow pre-trial custody to assume a punitive character. Section 45 does not require that result, and Article 21 does not permit it,” the Court held.
Title: MASASASONG AO v. ED