PMLA Interpretation - 2018 Amendment Has Revived The Twin Conditions For Bail Which Were Struck Down : Solicitor General Tells Supreme Court

The Supreme Court on Tuesday resumed hearing the string of petitions challenging the constitutionality of several provisions of the PMLA Act.When Solicitor General Tushar Mehta, on Tuesday, sought to address the bench on the validity of section 45 of the PMLA, Justice A. M. Khanwilkar indicated that the first question is whether the provision, which was struck down by the Supreme Court in Nikesh Tarachand Shah case in 2017, stands revived by virtue of the 2018 amendment.Section 45, when it was struck down, and as it stands today on being revived, imposes twin conditions on the grant of bail- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) 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 SG replied that he would make submissions on the law on the concept of taking away the basis of the judgment. "There are two grounds on which your lordships would declare a provision to be unconstitutional- one, that the legislature which enacted the law was not competent. For example, the Parliament legislates in list II or the state legislature legislates on the subject in list one. On this ground, if the legislation is declared unconstitutional, it cannot be cured by curing the defect. Suppose the Supreme Court declared a provision to be beyond the legislative competence of Parliament, then if subsequently the Parliament becomes competent, maybe by the amendment of the seventh schedule, will the provision revive? The Supreme Court says no. Because it is a stillborn law. Because you never had the power to give birth to that child. The second ground for declaring a provision to be unconstitutional is if it affects the provisions of Part III (of the Constitution; Fundamental Rights). Here, the provision does not get wiped off from the statute book, it only becomes inoperative or unimplementable. It remains on the statute book because the power of repeal is the power only conferred with the legislature. Your Lordships have held this. Therefore, the ground on which Your Lordships held it to be offending Part III can always be changed, the lacuna found by your lordships can be cured, and since it remains on the statute book, it can be revived", he submitted.The SG indicated the provision as it stood prior to Nikesh Tarachand Shah- "It was nobody's case that this provision lacked parliamentary competence, that was neither the challenge then nor now. The offending part in section 45(1), as it was then, was in as much as it said that Notwithstanding anything contained in the Cr. P. C., no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless- then the twin conditions. The offending part was that the provision required that he should be guilty, and guilty of not money laundering but of an offence which is punishable with an imprisonment of only three years or more. This is precisely what was found to be contrary to article 14 and 21 in Nikesh Tarachand Shah."Next, the SG indicated the position post-Nikesh Tarachand- "There has been curing of defect. The phrase 'Punishable for a term of imprisonment more than three years' goes. Now it reads 'under this Act'- that no person accused of an offence under this Act shall be released on bail or on his own bond unless…then the twin conditions. So the malignant part of the section, as it was so found in Nikesh Tarachand, goes."The SG indicated that the provision, as it exists today and which is under challenge, remains the same.The SG continuned to submit, "The argument in Nikesh Tarachand was based only on the fact that what attracts the twin conditions is 3 years or more imprisonment for Part A scheduled offences. The argument was that you club the twin conditions with the predicate offences and you are not even touching the offence under the money laundering act. The Court found that when the bill was introduced, you said that the twin conditions are for offences under this Act, but in the Act, you have linked twin conditions with the predicate offence, a part of predicate offence and only that part punishable with 3 years or more. Now we have cured the defect, we have removed predicate offenders who could be dealt under other law and confined it to money-launderers. The problem with 45 as it stood then was that you are not saying the person is guilty under this Act but that the person is guilty of a predicate offence, and that too a class within class that only those predicate offences which are punishable with three years or more of imprisonment. The applicability of 45 and its two conditions on a part of predicate offences was the issue before the court. The lacuna the court found, we have now cured. The court said that the twin...

PMLA Interpretation - 2018 Amendment Has Revived The Twin Conditions For Bail Which Were Struck Down : Solicitor General Tells Supreme Court

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