PMLA Provides Highest Benchmark For Arrest; Money Laundering Grave Offence As Victim Is National Economy, Says Supreme Court

The Supreme Court on Tuesday orally remarked that the fact that the PMLA Act contemplates a maximum punishment of 7 year' imprisonment for the offence of money-laundering does not take away from its gravity, and that the offence may well be "graver" in the sense that it does not affect just one individual but the victim is the national economy.A bench comprising Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar was hearing a batch of petitions challenging the constitutionality of provisions under the Prevention of Money Laundering Act relating to arrest, bail, search, attachment etc. The observation of the bench came when Senior Advocate Amit Desai, for the petitioners in the PMLA batch of cases, submitted that since section 4 of the Act caps the maximum sentence for the offence of money-laundering, as defined in section 3, at 7 years, from a legislative perspective, it is not a very grave crime. "The legislative intent in the general law is that if it is up to 7 years, then the ordinary principle is the grant of bail", he had submitted. It was his case that in view of the 7-year term, the twin conditions stipulated in section 45 of the Act restricting the grant of bail are disproportional. Section 45 provides that no person accused of an offence under this Act shall be released on bail unless (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."7 years alone would not be decisive of the gravity. The very purpose of the enactment is different. Merely because it has provided seven years, maybe because of various other factors, it does not take away the gravity part of it. The gravity, to say the very least- although there cannot be any comparison of gravity like this- but in a sense, the gravity might well be rather graver so far as this offence is concerned, particularly when it does not affect just one individual. The victim is the national economy and, therefore, every individual who belongs to the nation. The gravity would be very different. Prima facie we feel that seven years alone will not be decisive. There are several other factors", observed Justice Dinesh Maheshwari.Justice C. T. Ravikumar added, "The offence also affects the integrity and sovereignty of the country."Justice A. M. Khanwilkar also noted, "That argument of seven years is not impressing us...It is the legislative policy as regards the nature of the offence that matters."Justice Khanwilkar also observed, "If your argument is accepted and the legislature brings about a change and, instead of seven years, makes it life imprisonment, because of the nature of offence? The punishment being limited to 7 years does not automatically reduce the gravity of the offence."Justice Maheshwari added, "When you are articulating this line of thought, just one more area for you to ponder over- This proposition is that in a case of seven years, usually the bail is not to be denied. But have you taken into account that another facet of the punishment here is that a minimum three years is also prescribed?""There is a need in every society to deal with crime in law. I cannot stand and even argue for a moment to the contrary that bail is a matter of right in an offence punishable with seven years. If that were to be the case, they would have brought it under 436 (Cr. P. C.) and not 437. They would have made it a bailable offense, if that was the rule. I am not in that extreme proposition before Your Lordships. I cannot be, in the realm of criminal law. I am only canvassing a proposition that when we are dealing with a legislation where the punishment articulated is seven years, restrictions on bail, that were there for the offences in the terrorism and narcotics acts and MCOCA, have been put. And those Acts have a minimum sentence going from 10 years", Mr. Desai clarified."Section 45 takes away the discretion which is already vested under the CrPC with senior judges with experience in the criminal justice system as to when to grant or when to refuse bail. The question is should the legislature take away the discretion which is contemplated and has worked very well wholesomely for all the offences under so many legislations, many of them going up to the punishment in death? Can the legislature say that 'sorry, we will take away the discretion of the sessions court only because I say so, because it is an offence punishable with seven years'?", he continued.At this, Justice Khanwilkar asked, "Is discretion inherent in a court of record? I am asking whether grant of bail is inherent in a court of record or a constitutional court? You say legislation cannot make provision to take away jurisdiction of sessions courts. If we accept your argument that the trial court or the...

PMLA Provides Highest Benchmark For Arrest; Money Laundering Grave Offence As Victim Is National Economy, Says Supreme Court

Mehal Jain

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