S.45 PMLA: Twin Conditions For Bail That Were Declared Unconstitutional By SC Stand Revived By 2018 Amendment Act: Bombay High Court

In a recent case, a two-judge bench of the Bombay High Court noted that the twin conditions for bail in section 45(1) of the Prevention of Money Laundering Act, 2002 which were declared unconstitutional by the judgment of the Apex Court in Nikesh T.Shah Vs. Union of India (2018) 11 SCC 1, stand revived in view of the Legislative intervention vide Amendment Act 13 of 2018. In doing so, the division bench has departed from the view earlier expressed by a single bench of the Bombay High Court in Sameer M. Bhujbal Vs. Assistant Director, Directorate of Enforcement. It may be noted that a Supreme Court bench of Justices Sanjay Kishan Kaul and M.M.Sundaresh had recently reiterated that twin conditions for the grant of Bail under Section 45 were inapplicable. While hearing application seeking clarification to its order dated 07.10.2021, issuing guidelines on the aspect of the grant of bail to accused who are not arrested during the investigation on charge sheet being filed, the Supreme Court clarified that the twin conditions for grant of bail specified in Section 45 of Prevention of Money Laundering Act (PMLA) have been struck down.The two conditions are:the Public Prosecutor has been given an opportunity to oppose the application for such release; and where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:…The division bench of the Bombay High Court was hearing a reference from a single-judge bench's decision which held that the basis and foundation of the declaration of unconstitutionality stood removed in view of the Legislative intervention and therefore expressed his inability to concur with the view expressed by the learned Single Judges of the Court in the cases of Sameer Bhujbal and Yogesh Deshmukh.The Question referred to the Division Bench was:"Whether the twin conditions in section 45(1) of the 2002 Act, which was declared unconstitutional by the judgment of the Apex Court in Nikesh T.Shah Vs. Union of India (2018)11 SCC 1, stand revived in view of the Legislative intervention vide Amendment Act 13 of 2018?"The applicants had argued that the rigor of complying with the duel conditions in Section 45 (1) of the PMLA would not apply in view of the decision of the Apex Court in Nikesh Shah. They further argued that the Legislative amendment of the year 2018 has not cured the entire defects pointed out by the Supreme Court and therefore the twin conditions would not revive and that the Parliament cannot nullify the effect of the judgment of the Supreme Court by introducing the said amendment.The applicants placed reliance on the Bombay High Court decisions in the case of Sameer M. Bhujbal Vs. Assistant Director, Directorate of Enforcement, (B.A. No.286/2018 – Bombay High Court) and the case of Union of India Vs. Yogesh Narayanrao Deshmukh (2021) SCC Online Bom 2905. In Sameer Bhujbal, the Bombay High Court had expressed that even after amendment original section 45(1)(ii) has neither been revived or resurrected by the Amending Act. Moreover, the notification dated 29.03.2018 thereby amending section 45(1) of the PML Act was silent about its retrospective effect, therefore, there is no rigor of said twin conditions. In Yogesh Deshmukh, the Bombay High Court retierated the stand taken in Sameer Bhujbal. To the contrary, the respondents argued that due to the subsequent amendment introduced vide Act No.13 of 2018, the twin conditions have been revived and therefore the statutory mandate would apply while considering the bail application. In that regard she relied on the decision of the Supreme Court in P. Chidambaram v Directorate of Enforcement (2020) 12 SCC 791 and the Delhi High Court in cases of Bimal Kumar Jain Vs. Director of Enforcement, 2021 SCC Online Del 3847. Answering the reference, the judgment authored by Justice Vinay Joshi observes that while the legislature cannot by way of amendment undo the decision of the Court, it has the power to rectify the through amendment the defect noticed of highlighted by the decision of the Court. It further observes that the constitutional validity of the Amendment is not under challenge before the High Court. In fact, pending its constitutional validity before the Supreme Court, it must be presumed to be constitutionally valid. It notes: "The issue whether the Amendment Act 13 of 2018 has cured all the defects directly connects to the aspect of validity of the Amendment Act 13 of 2018, which is not the matter for consideration nor can be dealt under this reference arising out of bail application filed under the statutory provision." (Para 39) "After decision of Nikesh Shah (supra) the Parliament has introduced an amendment to Section 45 of the Act, which has changed the entire complexion. Merely because the entire section is not re-enacted, has no consequence. Admittedly, the Amending Act is...

S.45 PMLA: Twin Conditions For Bail That Were Declared Unconstitutional By SC Stand Revived By 2018 Amendment Act: Bombay High Court

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