Right to Bail in Money Laundering Cases
The Prevention of Money Laundering Act, 2002 being the parent and sole
definite law that engages with offences pertaining to Money Laundering in India,
was brought to Indian statutes after the repeal of the Foreign Exchange
Regulation Act, 1973. The '73 Act was considered draconian for its rigid and
stringent regulations, and the government considered two fundamental bills (FERA
and PMLA) to deal with the menace of foreign exchange and its management control
in the country.
The PMLA Act after coming to force in 2002, provided for the prosecution of
wrongdoers and criminal punishments if found guilty, however, even in the light
of the 2019 amendments, the act still does not provide a straight-jacket answer
to various provisions, especially in coping with the increasing menace of money
laundering elopements from the country. One of the important questions that lack
an interpretation is relating to the prerogative of an accused to avail the
option of Bail.
Bail being the right of an arrested person shall be at the option of every
individual in question. The act, however, in its interpretation and read along
with the explanation added by way of 2019 amendments, under Section 45 provides
for all offences relating to money laundering to be 'non-bailable cognisable'.
This however does not mean that the accused in no circumstances shall be
provided with an opportunity of bail, rather in such cases, it is the court
which while exercising its discretion, decides if the accused may be provided of
this window to avail such a benefit. This shifts power in the hands of the court
to determine the criteria to arbitrate on the usage of its prerogative based on
the objects and interpretation of the act, and the facts and circumstances
relied upon by the accused. If we observe the pattern of Courts in deciding such
cases it comes to note that the courts haven't relied on a set test to assess
the grant of bail.
This situation was on the contrary before 2017 wherein the provisions were such
that the public prosecutor's discretion determined if the accused shall be
granted bail. The conditions were so stringent that the release of an arrested
person almost became impossible. The twin conditions laid – first, that no
person could be granted bail if the public prosecutor is not provided with an
opportunity to oppose bail of the arrested.
And if after his opposition court wishes to grant bail, the court needs to be
satisfied of his innocence in addition to the conditions laid under Cr.P.C. for
such a grant, and if these conditions were not fulfilled, the accused couldn't
avail the benefit of bail. In the usual stages of a preliminary inquiry, this
would have raised basic allegations, on the basis of which the court would not
be able to return in affirmative about the non-guilt of the accused.
The court considering these regressive terms in Nikesh Tarachand Shah vs
Union Of India, struck off the conditions, ruling them to be too excessive
and violative of Articles 14 and 21 of the Constitution. It was held that this
drastic provision was contrary to the fundamental right to liberty and the
cardinal rule of presumption of innocence of an accused.
With these conditions waived off, the court is now left with the triple test
laid down in the Code of Criminal Procedure which is followed for the grant of
bail in offences of all nature, not considering the special nature of the money
laundering act and the treatment that should be accorded with respect to 'proceeds
The triple test comprises of three basic conditions- that the accused must not
pose a flight risk of evading from the country i.e. he must be available at all
times at the court's disposal, he would not evade the process of law that there
is no scope of tampering with the evidence that might be of use to court and;
that he has deep roots in society and he is not previously involved in any
criminal activity. The court on reaching an affirmative about the position of
the accused may grant him bail.
The issue here lies in the treatment given to the interpretation of such
offences which lays no emphasis on the gravity and the importance of bail while
dealing with money laundering matters. This not only leaves us with no stern
condition for bail but also disregards the fundamental principle of categorising
all offences in the act as being 'non-bailable'.
Special emphasis should have been accorded for treatment given to bail,
considering the fact that even after Nirav Modi and Vijay Malaya evaded law
there hasn't been any change in the provisions of PMLA in this respect. There
lies is an inherent need in the existing provisions to take into consideration
compelling state interest to get grips with serious offences like these. Grave
money laundering matters put to peril the country's financial institutions while
also destroying the economy, and therefore must be analysed and put to force
with uncompromising criteria, to not let such offenders evade the process of law
in a country.
It may be argued that the introduction of such provisions in the law would
override the rights of an accused to be granted bail, and the courts may try to
avoid the vengeful and arbitrary use of the provisions of special legislation by
reading off the parts that might seem to do away with the some of the
Fundamental Rights, but one must consider the intentions of such amendment to do
away with black money, and the gravity and implications of such offences on an
average man must also be considered while ensuring constitutionally harmonious
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