"Money-Laundering A Heinous Crime ; Twin Conditions For Bail Not Unreasonable": Supreme Court Upholds Section 45(1) PMLA

The Supreme Court upheld the Constitutional validity of "twin conditions" for bail under amended Section 45 of the Prevention of Money Laundering Act, 2002 Act.Money-laundering is one of the heinous crimes, which not only affects the social and economic fabric of the nation, but also tends to promote other heinous offences, such as terrorism, offences related to NDPS Act, etc., the three judges bench headed by Justice AM Khanwilkar observed.The bench comprising Justices Dinesh Maheshwari and CT Ravikumar added that irrespective of the nature of proceedings, including those under Section 438 CrPC or even upon invoking the jurisdiction of Constitutional Courts, the underlying principles and rigours of Section 45 may apply. Section 45(2) before and after 2018 amendmentThe two conditions under Section 45 are: (i) Prosecutor is given opportunity to oppose the bail application and (ii) 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. Presently, after 2018 amendment, the relevant part of Section 45(2) reads thus : Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond 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:.....Prior to 2018 amendment, instead of 'under this Act', it was 'punishable for a term of imprisonment of more than three years under Part A of the Schedule'. In Nikesh Tarachand Shah vs. Union of India (2018) 11 SCC 1, the Supreme Court declared such conditions to be unconstitutional being violative of Articles 14 and 21 of the Constitution.It cannot be said that twin conditions does not get revivedThe first issue raised in this case was whether the twin conditions, in law, continued to remain on the statute book post decision of this Court in Nikesh Tarachand Shah? The petitioners relied on an observation in State of Manipur & Ors. vs. Surajkumar Okram & Ors 2022 LiveLaw (SC) 112 that owing to the declaration by a Court that the statute is unconstitutional obliterates the statute entirely as though it had never been passed.The bench referring to various judgments including that of Constitution Bench observed:It is, therefore, clear from above that if by amending the provision retrospectively, the Parliament has removed the defect or has taken away the basis on which the provision was declared void then the provision cannot be said to be in conflict with Article 13 of the Constitution. In other words, if the very premise on which the judgment of the Court declaring the provision to be void has been uprooted by the Parliament, thereby resulting in the change of circumstances, the judgment could not be given effect to in the altered circumstances, then the provision cannot be held to be void. In this case, as has been stated above, the anomalies noted in Nikesh Tarachand Shah have been removed by way of Act No. 13 of 2018. Further, it has been clarified by way of Finance (No.2) Act, 2019 that amendment shall operate retrospectively. Thus, it cannot be said that twin conditions under Section 45 of the 2002 Act does not get revived.The court also note that even after declaration of unconstitutionality on the ground of violating provisions of Part III of Constitution, it is open to the Parliament/Legislature to cure the defect reckoned by the Constitutional Court in relation to the concerned provision whilst declaring it as unconstitutional.It was open to the Parliament to cure the defect noted The court noted that in Nikesh Tarachand Shah, the provision was declared unconstitutional on these grounds (1) the provision, as it existed at the relevant time, was founded on a classification based on sentencing of the scheduled offence and it had no nexus with objectives of the 2002 Act; and (2) the twin conditions were restricted only to a particular class of offences within the 2002 Act, such as offences punishable for a term of imprisonment for more than three years under Part A of the Schedule, and not to all the offences under the 2002 Act.By the 2018 amendment , the defects have been duly cured by deleting the words "punishable for a term of imprisonment of more than three years under Part A of the Schedule" in Section 45(1) of the 2002 Act and substituted by words "under this Act", the court noted. It further observed:"On a fair reading of the judgment, we must observe that although the Court declared the twin conditions as unconstitutional, but it was in the context of the opening part of the sub-section (1) of Section 45, as it stood then, which resulted in discrimination and arbitrariness as ...

"Money-Laundering A Heinous Crime ; Twin Conditions For Bail Not Unreasonable": Supreme Court Upholds Section 45(1) PMLA

Ashok KM

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