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SC holds stringent bail condition in PMLA as unconstitutional

Modi govt had defended the conditions on the ground that it was an attempt to get back black money. But the court held that the law violates Articles 14 (right to equality) and 21(right to liberty).

india Updated: Nov 23, 2017 23:11 IST
Bhadra Sinha
Bhadra Sinha
Hindustan Times, New Delhi
Blackmoney,PMLA,Right to liberty
Lawyers outside Supreme Court. (Mint)

A controversial clause in the Prevention of Money Laundering Act that put stringent conditions while granting bail to accused has been struck down as unconstitutional by the Supreme Court on Thursday.

A bench of justices RF Nariman and Sanjay Kishan Kaul held section 45 (1) arbitrary and unjust because it allowed a judge to deny bail to an accused charged with an offence that is punishable with more than three years in prison.

As per section 45(1), an accused could get bail only after the public prosecutor is given an opportunity to oppose the application and if the court is satisfied that the person is neither guilty of the alleged offence nor likely to commit the crime again on his or her release.

The Modi government had defended the stringent conditions on the ground that it was an attempt by the Parliament to get back the black money siphoned off from the economy.

But the court held that the law leads to “manifestly arbitrary and unjust results and, therefore, violates Articles 14 (right to equality) and 21(right to liberty) of the Constitution.”

The SC judgement came on a clutch of petitions challenging the validity of section 45 (1) of PMLA.

Petitioners in the case moved the top court after they were denied bail following the twin conditions.

SC gave them liberty to approach the trial court afresh and said their bail petitions should be heard and decided expeditiously.

The Prevention of Money Laundering Act, 2002 was introduced, to make money laundering an offence, and to attach property involved in money laundering.

It was aimed to adequately deal with the serious threat to the financial system of India. Though the Act was passed by the Parliament in 2002, it was brought into force only on August, 2005.

Scheduled offences defined in PMLA comprise various offences, including some under Indian Penal Code (IPC), anti-drug law, Explosives Substances Act, Arms Act, Wildlife (Protection) Act, Immoral Traffic (Prevention) Act, Prevention of Corruption Act and Antiquities and Arts Treasures Act.

It was argued before the top court that the two conditions made grant of bail virtually impossible in money laundering cases.

Also, to satisfy them the accused will have to disclose their defence at a point in time when they are unable to do so.

On its part the government urged the court not to strike down the provision but read it down to make it constitutional. However, this was not accepted by the court, which said the provision had no rational relation with the grant of bail for the offence of money laundering.

First Published: Nov 23, 2017 23:11 IST