Supreme Court Judgments On Bail Under Section 45 Of The Prevention Of Money Laundering Act, 2002, In The Post Vijay Madanlal Era

I. INTRODUCTIONThe present Article analyzes the judgments passed by the Hon'ble Supreme Court on regular bail under Section 45 of the Prevention of Money Laundering Act, 2002 (“PMLA”), subsequent to its decision in Vijay Madanlal Choudhary v. Union of India & Ors. (“Vijay Madanlal Judgment”). While the decision in the Vijay Madanlal Judgment stipulated certain principles to be taken into account for grant of bail, the present Article tests the consistency with which such principles are being applied in the post Vijay Madanlal era. II. SUPREME COURT'S FINDINGS ON BAIL IN THE VIJAY MADANLAL JUDGMENT By way of the Vijay Madanlal Judgment, the Hon'ble Supreme Court set out the following principles for grant of regular bail under Section 45 of the PMLA: 1. The burden of proof lies on the accused to prove that the accused fulfills the twin test stipulated under Section 45 of the PMLA, i.e. there are reasonable grounds for believing that the accused is not guilty of the offence of money laundering and that the accused is not likely to commit any offence while on bail (“Twin Test”). 2. The Courts are neither required to record a positive finding that the accused has not committed an offence under the PMLA, nor required to weigh the evidence meticulously or delve into the merits of the case. Instead, the Courts should arrive at a finding based on broad probabilities on the material collected during investigation. The Courts should see if there is a prima facie case against the accused. 3. Section 436-A of the Code of Criminal Procedure, 1973 (“Cr.P.C.”) is an exception to the strict compliance of the twin test. As such, if the trial cannot proceed and the accused has undergone one-half of the maximum period of imprisonment provided under the PMLA, the Courts may enlarge the accused on bail. However, the Courts should not grant the said relief mechanically and instead consider the relief on a case-to-case basis and may even impose appropriate conditions to secure the presence of the accused during trial. 4. The Supreme Court noted that the learned Solicitor General had fairly accepted that the mandate of Section 167 of the Cr.P.C. would apply to cases under Section 3 of the PMLA. As consistently held by the Supreme Court, in terms of Section 167 of the Cr.P.C., if the chargesheet is not filed within 60 days of the Magistrate authorizing remand of the accused, the accused would be entitled to default bail. III. SUPREME COURT JUDGMENTS GRANTING REGULAR BAIL 1. Directorate of Enforcement v. Madhukar G. Angur Factors taken into consideration: (a) The accused had spent 2.5 months in custody. (b) The accused had been granted bail in the predicate offence and anticipatory bail in the connected matters. Key Takeaways: (a) The Supreme Court upheld the order granting bail to the accused despite the Enforcement Directorate's submission that the accused had made an attempt to influence witnesses after being released on bail. 2. Ramchand Karunakaran v. Directorate of Enforcement & Anr. Factors taken into consideration: (a) The accused had spent more than 3 years in custody. (b) The Court was yet to take cognizance and frame charges in the proceedings under PMLA. (c) The accused was a senior citizen. (d) The co-accused had not yet been arrested. 3. Sanjay Agarwal v. The Directorate of Enforcement Factors taken into consideration: (a) The accused had undergone custody for a period of 1 year. (b) The investigation for the offence under PMLA was still pending. 4. Sanjay Kumar Tiwari v. Union of India Factors taken into consideration: (a) The accused had undergone 15 months in custody which is nearly 50% of the minimum sentence that could be imposed for the offence under the PMLA. (b) The accused undertook to repay the funds to the public sector bank. 5. Ram Pratap Verma v. The State through Directorate of Enforcement Factors taken into consideration: (a) The chargesheet had been filed without arresting the accused. (b) The conclusion of trial was likely to take time. (c) The co-accused had been enlarged on bail. 6. Manoj Kumar Pattanaik v. DVS Kishore Factors taken into consideration: (a) The accused had undergone incarceration for a period of 9 years and 2 months (for the predicate offence and the offence under the PMLA). 7. Enforcement Directorate v. Kapil Wadhawan & OrsFactors taken into consideration: (a) The accused persons were remanded to custody on 14.05.2020. As such, the right to default bail under Section 167 of the Cr.P.C. accrued on 13.07.2020 at 12:00 AM (60th day of custody). On that very day, the accused persons filed their applications seeking default bail at 8:53 AM. The Directorate of Enforcement filed chargesheet at 11:15 AM (61st day of custody).Key Takeaways:(a) The accused can avail the benefit of default bail U/s. 167 of the Cr.P.C. if chargesheet is not filed within 60 days of the Magistrate authorizing remand of the accused. (b) The first day on which the Magistrate...

Supreme Court Judgments On Bail Under Section 45 Of The Prevention Of Money Laundering Act, 2002, In The Post Vijay Madanlal Era

Divya Jhalani

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