By Vijay Pal Dalmia, Advocate
Supreme Court of India & High Court
Email id: firstname.lastname@example.org Mobile No.: +91 9810081079
And Rajat Jain, Advocate
Mobile No. 9953887311
That the Hon'ble Supreme Court in the case of Nikesh Tarachand Shah vs. Union of India & Anr., Writ Petition (Criminal) No. 67 OF 2017 (https://www.sci.gov.in/supremecourt/2017/13393/13393_2017_Judgement_23-Nov-2017.pdf), had struck down Section 45(1) of the Prevention of Money Laundering Act, 2002 (hereinafter also referred as "PMLA"), insofar as it imposes two further conditions for release on bail, for the offences punishable for a term of imprisonment of more than 3 years under Part A of the Schedule to the PMLA is involved, to be unconstitutional as it is violative of the fundamental rights.
The 2 conditions provided under the said section are as under:
- the Public Prosecutor has been given an opportunity to oppose the application for such release; and
- 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:
That pursuant to this judgment, the Government of India with effect from 19-04-2018 has amended Section 45(1) of the PMLA Act by adding the words "under this Act" to Sub-section (1) of Section 45 of the PMLA Act and deleting the words "punishable for a term of imprisonment of more than 3 years under Part A of the Schedule", as one of the grounds for striking down the section in the said judgment was that the appropriate Court while deciding the bail application should have reasonable grounds for believing that the accused is not guilty of a predicate offence instead of an offence under PMLA.
The amended section 45 of the PMLA reads as under:
Section 45 - Offences to be cognizable and non-bailable
Notwithstanding anything contained in the Code of Criminal Procedure, 1973(2 of1974), 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:
Provided that a person, who, is under the age of sixteen years, or is a woman or is sick and infirm [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees], may be released on bail, if the Special Court so directs:
Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by--
(i) the Director; or
(ii) any officer of the Central Government or a State Government authorized in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.
(1A)Notwithstanding anything contained in the Code of Criminal Procedure, 1973, or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorized, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed
(2) The limitation on granting of bail specified in [***] sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail.
However, in the case of Vinod Bhandari vs. Assistant Director, Directorate of Enforcement, IV(2018)C C R178(MP) (https://indiankanoon.org/doc/149592740/), the Hon'ble Madras Court has held that despite the amendment in the provision of Section 45 of the PMLA in the year 2018, the original Section 45(1)(ii) has not been revived. The relevant extract is as under:
"It is to be noted here that, after effecting amendment to Section 45(1) of the PMLA Act the words "under this Act" are added to Sub-section (1) of Section 45 of the PMLA Act. However, the original Section 45(1)(ii) has not been revived or resurrected by the said Amending Act. The learned Counsel appearing for the applicant and the learned ASG are not disputing about the said fact situation and in fact have conceded to the same. It is further to be noted here that, even Notification dated 29.3.2018 thereby amending Section 45(1) of PMLA Act which came into effect from 19.4.2018, is silent about its retrospective applicability. 1 4 . In view of thereof, the contention advanced by the learned ASG cannot be accepted. It is to be further noted here that, the original Sub-section 45(1)(ii) has therefore neither revived nor resurrected by the Amending Act and, therefore, as of today there is no rigor of said two further conditions under original Section 45(1)(ii) of PMLA Act for releasing the accused on bail under the said Act."
Therefore, in the PMLA matters at the time of seeking bails, it can be contended that rigors provided under Section 45(1) of the PMLA for the grant of the bail are not applicable as the said section has not been revived and only the provisions of Section 437 of the Code of Criminal Procedure, 1973 would be applicable for deciding the bail of the accused.
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