PMLA | Are Sec.45 Bail Conditions Applicable To Accused Who Appears Before Court As Per Summons? Supreme Court Reserves Judgment

The Supreme Court on Tuesday (April 30) reserved the Judgment on the issue whether an accused in a money laundering case is required to fulfil the twin conditions for bail under Section 45 of the Prevention of Money Laundering Act (PMLA) when he executes a bond for appearance before the Special Court in pursuance of a summons issued to him.

The Bench comprising Justices Abhay S. Oka and Ujjal Bhuyan heard the matter.

The crux of the issue before the Supreme Court is whether the execution of the bond by an accused for showing his presence before the court under Section 88 of Cr.P.C. would amount to applying for bail to make twin conditions of bail under Section 45 of the Prevention of Money Laundering Act, 2002 applicable.

According to Section 45 of the PMLA, bail can be granted to an accused in a money laundering case only if twin conditions are satisfied - there should be prima facie satisfaction that the accused has not committed the offence and that he is not likely to commit any offence while on bail.

To recapitulate, earlier the Court had framed two questions to be decided .

(I) If pursuant to the summons issued by the Special Court, the accused appears before the Special Court, whether he is required to apply for bail in terms of Section 437 CrPC?

(II) If the answer to the said issue is in affirmative, whether such a bail plea will be governed by the twin conditions imposed by Section 45 of the PMLA Act?

The Court had earlier expressed a prima facie view that when the Special Court has taken cognizance of the ED complaint, then the powers of arrest under Section 19 of the PMLA cannot be exercised.

In a money laundering case, the accused had appeared before the court in compliance of the summons issued to him. However, the proceedings of the bond executed by the petitioner/accused under Section 88 of Cr.P.C. for securing its presence was treated as a bail proceeding requiring the mandate of Section 45 of PMLA to be fulfilled.

While apprehending an arrest after the issuance of summons, the accused approached the High Court for the grant of anticipatory bail. Denying the anticipatory bail to the accused, the High Court granted interim protection from arrest in January, 2024, subject to condition that he would regularly appear before the Trial Court on dates fixed in the complaint. This protection stands extended by the order of March 1 till the next of hearing.

The High Court was of the view that the petitioner did not satisfy the second condition under Section 45 PMLA, as per which before granting bail, a Court must be satisfied that there are reasonable grounds for believing that the applicant is not guilty of such an offence and is not likely to commit any offence while on bail.

Against the decision of the High Court, the petitioner/accused approached the Supreme Court.

Today, while appearing on behalf of the petitioner, Senior Advocate Siddharth Luthra contended that once the accused appears before the court in compliance with the summons and submits a bond under Section 88 of Cr.P.C. for securing its presence in the court, then the bond executed under Section 88 wouldn't be treated as a bail to attract the twin conditions under Section 45 PMLA.

Whereas Additional Solicitor General SV Raju who appeared for the Directorate of Enforcement (ED) submitted that the High Court hasn't committed an error in denying the interim relief to the accused because whenever the powers under Section 88 of Cr.P.C. is exercised by the court regarding securing the bond for the presence of the accused then it would amount to securing bail and the provisions under Section 45 of PMLA would apply i.e., the bail would be granted only if the twin conditions are followed.

Countering ASG Raju's submissions, Mr. Luthra submitted that when the accused appears before the court in compliance with the summons and submits a bond under Section 88 of Cr.P.C. for securing its presence in the court, then the bond executed under Section 88 wouldn't be treated as a bail.

Continuing his submissions, Mr. Luthra explained the purpose behind securing the bond from the accused i.e., to secure the presence of the accused. He contended that securing the presence of the accused in the court could not be treated as granting bail.

Since there was no arrest or detention in the present case, Mr. Luthra placed reliance on the Souvik Bhattacharya case (2024) to contend that bail could be granted only when there is an arrest or detention.

“As such Section 437 of Cr.P.C. would come into play when the accused is arrested or detained or when the summons or warrant is issued against the accused for causing him to be brought or to appear before the Court.”, the court said in Souvik Bhattacharya as relied upon by Mr. Luthra.

Since the accused has appeared before the court in compliance with the summons issued by the court, therefore, there is no question of arresting or detaining the accused, and thus, the provisions for bail couldn't be applied, Mr. Luthra argued.

Upon hearing the parties, the court reserved the judgment.

Case Title: Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office, Special Leave to Appeal (Crl.) No(s). 121/2024 (and connected matters)