Bail under the PMLA, 2002: Why is it so Difficult to Obtain?

Arvind Kejriwal's Bail Highlights the Stringent and Unjust Provisions of Section 45 of PMLA: Is It Time for its Repeal?

Introduction— Bail for Kejriwal

The incarceration and eventual bail of the Delhi Chief Minister, Arvind Kejriwal, have brought into sharp focus the exceedingly stringent provisions of bail under the Prevention of Money Laundering Act (PMLA), 2002. While the lay reader might be aware of the rejection of bail applications for his colleagues, like Manish Sisodia and Satyendar Jain, even up to the Supreme Court, they may not fully appreciate the reasons behind these decisions in the context of the PMLA. Let’s delve deep into this aspect for the benefit of of ours readers, who may or may not be legal experts.

Bail Provisions under Ordinary Laws

Under the normal law, including for heinous offences that attract life imprisonment or even the death penalty, the accused is entitled to bail if the investigating agency fails to file a chargesheet within the stipulated time. This period is generally 90 days for non-heinous offences and 180 days for heinous offences.

Conditions for Bail

Even when this period has not expired, bail is normally granted if three conditions are satisfied:

The accused will not abscond and evade the process of law.

The accused will not intimidate witnesses.

The accused will not tamper with evidence.

The first condition can be met by depositing the passport and imposing sufficient securities to ensure appearance. The remaining conditions are also easy to monitor, with bail being liable to cancellation upon any violation. The court can impose additional conditions, such as restricting the accused from visiting certain areas.

Stringent Provisions of PMLA

In contrast, the PMLA, 2002 framework makes obtaining regular bail exceedingly difficult. it inter alia states: “Where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail.”

Thus section 45 of the PMLA imposes stringent conditions, requiring the judge to be satisfied that:

The accused is prima facie not guilty of the offence of money laundering.

The accused will not commit such an offence in the future.

These conditions are almost impossible to meet. At the bail stage, with the entire material, including the chargesheet and prosecution arguments, the judge must be convinced of the accused’s innocence, which is an unreasonable expectation unless the case is exceedingly weak.

Challenges at Different Stages

If the investigation is at an initial stage, the prosecution will argue that forming an opinion about the accused's innocence is premature. Conversely, if a chargesheet is filed, the prosecution will insist that the trial should proceed without any premature judgement on innocence. Thus, obtaining bail under the PMLA, 2002, becomes nearly impossible during the trial, which often extends for years.

Supreme Court Rulings

Although the Supreme Court upheld the constitutional validity of the PMLA, 2002, in the Vijay Madanlal Chaudhary case, it held that the threshold for arrest under Section 19 is high¹. This section requires, among other things, the investigating agency to serve the grounds of arrest in writing within 24 hours. However, the Enforcement Directorate (ED) often resorts to arrest without adhering to these stringent conditions, making it very difficult to establish the illegality of the arrest within the legal procedure.

Limited Relief from Supreme Court

The Supreme Court has provided some relief in PMLA cases, such as granting bail if the accused’s incarceration exceeds half of the maximum punishment (3.5 years for a 7-year sentence). Additionally, if the ED does not arrest an accused during the investigation and the accused cooperates, bail, rather bond for appearance during the trial, can be granted by the Court upon filing the chargesheet, without attracting section 45.

Insufficiency of Relief

However, these rulings offer limited relief. The reverse burden of proof at the bail stage contradicts the principle that a person is presumed innocent until proven guilty. Section 45 of the PMLA infringes on personal liberty, leading to indefinite incarceration without a time limit for investigation or trial completion. The process itself becomes the punishment.

Need for Legislative Change

The honourable Supreme Court may have upheld Section 45’s constitutional validity, but its fairness, justice, and equity remain questionable. As the world's largest democracy, India should aspire to the highest democratic standards. Provisions like Section 45 should be removed from the statute book. While the ED can attach and freeze “proceeds of crime”, ensuring that the accused remains in jail does not facilitate investigation or trial. Opposing bail in all such cases is unjustified.

Call to Action— Scrap Section 45

To achieve justice and fairness, Parliament must adopt an enlightened view and remove this contentious provision from the law. The recent bail granted to Arvind Kejriwal might catalyse public opinion to highlight these unjust provisions. The time for change is now, and those who advocate for due process and personal liberty should unite to lobby for the removal of Section 45 from the PMLA.

The text of Section 19 of the Prevention of Money Laundering Act (PMLA), 2002:

Section 19: Power to Arrest

If the Director, Deputy Director, Assistant Director or any other officer authorised in this behalf by the Central Government by general or special order, has on the basis of material in his possession reason to believe (the reason for such belief to be recorded in writing) that any person has been guilty of an offence punishable under this Act, he may arrest such person and shall, as soon as may be, inform him of the grounds for such arrest.

Every person arrested under sub-section (1) shall, within twenty-four hours, be taken to a Judicial Magistrate or a Metropolitan Magistrate, as the case may be, having jurisdiction: Provided that the period of twenty-four hours shall exclude the time necessary for the journey from the place of arrest to the Magistrate’s court.

Subject to the provisions of this Act, every person arrested under sub-section (1) shall be forwarded without unnecessary delay to the nearest Judicial Magistrate or Metropolitan Magistrate, as the case may be, having jurisdiction.

This section outlines the authority and procedure for arrest under the PMLA, specifying the responsibilities of the arresting officer and the rights of the arrested individual.