Introduction
Section 45 of the Prevention of Money Laundering Act, 2002, imposes a higher threshold for the grant of bail in money-laundering cases. It does not, however, create an absolute or non-negotiable bar. The provision remains subject to the fundamental guarantees under Article 21 of the Constitution—personal liberty and the right to a speedy trial. Courts therefore continue to exercise judicial discretion, guided by the twin conditions of Section 45 and the overarching constitutional principles that protect against indefinite pre-trial detention.
The Twin Conditions Under Section 45
Before granting bail, the Special Court must give the Public Prosecutor an opportunity to oppose the application. Where opposed, the Court must record satisfaction on two mandatory counts:
- There are reasonable grounds for believing that the accused is not guilty of the offense of money laundering.
- The accused is not likely to commit any offense while on bail.
These conditions apply to regular bail, anticipatory bail, and post-cognizance bail applications under the Bharatiya Nagarik Suraksha Sanhita. The inquiry is limited to a prima facie assessment of the available material; courts are not required to conduct a mini-trial or demand proof beyond reasonable doubt.
Important Clarification: Tarsem Lal, 2024 INSC 434
Under the Tarsem Lal (2024) ruling, an accused who was not arrested during the investigation and appears before the Special Court solely in response to a summons is not considered to be in custody. Consequently, such an individual is not required to apply for bail, exempting them from the stringent “twin conditions” prescribed under Section 45 of the Prevention of Money Laundering Act (PMLA). Simply showing up to court in obedience to a judicial summons does not equate to being detained or surrendering into custody.
Simultaneously, once the Special Court takes cognizance of the complaint under Section 44(1)(b), the Enforcement Directorate (ED) forfeits its statutory authority under Section 19 to make an arrest. The power to arrest exists only during the investigation phase; after cognizance, the matter enters the judicial stage, transferring all authority over the accused’s custody and liberty exclusively to the court. Thereafter, the ED cannot arrest the accused without a specific direction or warrant from the judge.
Also Read: World Inequality Report 2026: India’s Wealth Gap, Top 1%, and Economic Inequality
The twin conditions apply when the accused is in custody (or treated as such).
Key Judicial Precedents
| Landmark Case | Core Principle |
|---|---|
| Nikesh Tarachand Shah (2018) | Struck down the original twin conditions as unconstitutional (later re-enacted in amended form). |
| Vijay Madanlal Choudhary (2022) | Upheld the amended Section 45. Twin conditions restrict but do not abolish judicial discretion to grant bail. |
| Tarun Kumar (2023) | Twin conditions are mandatory; courts cannot bypass them without examining the prima facie material. |
| Tarsem Lal (2024) | Appearance pursuant to summons after cognizance does not amount to custody; Section 45 is not attracted. ED cannot arrest post-cognizance under Section 19. |
| Manish Sisodia (2024) | Article 21 (speedy trial) can override statutory restrictions. Prolonged pre-trial incarceration without a realistic prospect of early trial commencement justifies bail. |
| Prem Prakash (2024) | “Bail is the rule, jail is the exception” remains a vital constitutional principle even under PMLA. Section 45 does not rewrite this principle. |
| Kanhaiya Prasad (2025 INSC 210) | High Courts cannot grant bail in a “casual or cryptic” manner without recording satisfaction on both conditions (Kanhaiya Prasad 2025 INSC 210 confirms this firmly). |
| Subsequent 2025–2026 rulings | Reaffirm that prolonged incarceration + delayed trial (especially where evidence is largely documentary and the number of witnesses is high) continues to attract Article 21 considerations. The proviso for women has also been clarified: twin conditions do not apply when the applicant is a woman. |
Statutory Exceptions and Counter-Arguments
Proviso to Section 45(1)
The twin conditions may be relaxed (or need not be satisfied) for a woman, a person under 16 years of age, a sick or infirm person, or where the alleged proceeds of crime are less than ₹1 crore. The Supreme Court has expressly held that the stringent twin conditions do not apply to women applicants.
Prolonged Incarceration and Trial Delay
Indefinite detention, where the trial is unlikely to conclude within a reasonable time (due to voluminous documents, a large number of witnesses, or delays attributable to the prosecution), violates Article 21. Section 436A CrPC / corresponding BNSS provisions and the principle that bail is the rule remain relevant.
No Mini-Trial
Scrutiny at the bail stage is confined to a prima facie evaluation of the material on record.
Parity
Bail on the ground of parity is not automatic. The applicant must demonstrate substantially identical roles, evidence, and circumstances relative to the co-accused already enlarged on bail.
Foundational Facts and Presumption Under Section 24
When the prosecution opposes bail, it must prima facie establish the foundational facts of money laundering. The presumption under Section 24 arises only after those facts are shown.
Practical Checklist for PMLA Bail Pleadings
1. No Direct Link to Crime Money
Show that the accused never handled, owned, or used any money generated from the crime as defined under Section 3.
2. Main Case Status
Point out if the original main crime (scheduled offense) has been dropped, quashed, or cleared by a court, which destroys the money laundering case.
3. Time Already Spent in Jail
Highlight how many days the accused has been locked up compared to the maximum sentence, and show that the trial will take a very long time to finish.
4. Pass the 3 Basic Bail Conditions
- Not a flight risk: Show local roots, family ties, and a willingness to surrender their passport.
- Cannot destroy evidence: Point out that all key documents are already collected and safe with the Enforcement Directorate.
- Cannot threaten witnesses: Show that the accused holds no official power or influence over any witnesses.
5. Special Grounds for Easy Bail
Mention if the applicant qualifies for special exceptions, such as being a woman, a minor, or sick/elderly, or if the money involved is under the legal limit (₹1 crore).
6. Right to a Speedy Trial Under Article 21
Explain that the trial is taking too long due to massive evidence or delays by the agency, violating the fundamental right to liberty.
Conclusion
Section 45 imposes a high but not insurmountable threshold. Courts must apply the twin conditions rigorously, yet constitutional guarantees under Article 21 — particularly the right to a speedy trial — continue to operate as a meaningful check against indefinite pre-trial detention.
