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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 of crime'.

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 legislation.

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