BAIL FOR WOMAN UNDER PREVENTION OF MONEY LAUNDERING ACT, 2002

Section 45 of the Prevention of Money Laundering Act, 2002, (‘Act’ for short) provides for granting bail to the accused who committed offences under the Act.
Section 45(1) of the Act provides that no person accused of an offence under this Act shall be released on bail or on his own bond unless-

• 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.

Section 45 is a drastic provision which turns on its head the presumption of innocence which is fundamental to a person accused of any offence as held in ‘Nikesh Tarachand Shah v. Union of India and another’ – 2017 AIR 5500.

Bail to woman

The first proviso to Section 45(1) of the Act provides that a person, who, is
under the age of 16 years, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money-laundering a sum of less than Rs.1 crore may be released on bail, if the Special Court so directs. The second proviso to Section 45(1) provides that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by-

• the Director; or
• any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.

Thus, a woman has a chance of getting a bail for the offences under the Act, under the first proviso to Section 45(1).

In ‘Saumya Chaurasia v. Directorate of Enforcement’ – (2024) 6 SCC 401, the appellant was arrested on 02.12.2022 in connection with the Crime No. ECIR/RPZ0/09/2022 dated 29.09.2022, registered at the Police Station/Investigating Agency – Directorate of Enforcement, Zonal Office Raipur, Chhattisgarh, for the offences punishable under Sections 186, 204, 353, 384, 120-B of IPC read with Sections 3 and 4 of Act. The appellant filed a bail application
before the High Court of Chhattisgarh, Bilaspur under Section 369 of Criminal
Procedure Code. The said application was dismissed by the High Court on 23.06.2023.

Against the order of the High Court, the appellant filed the present appeal before the Supreme Court. The Supreme Court considered the question as to whether the appellant being a woman should be given the benefit of the first proviso to Section 45(1) of the Act. The Supreme Court held that the use of the expression ‘may be’ in the first proviso to Section 45 clearly indicates that the benefit of the said proviso to the category of persons mentioned therein may be extended at the discretion of the Court considering the facts and circumstances of each case, and could not be construed as a mandatory or obligatory on the part of the Court to release them. Similar benevolent provision for granting bail to the category of persons below the age of 16 years, women, sick or infirm has been made in Section 437
Cr.P.C. and many other special enactments also, however by no stretch of
imagination could such provision be construed as obligatory or mandatory in
nature, otherwise all serious offences under such special Acts would be
committed involving women and persons of tender age below 16 years.

The Supreme Court observed that there is sufficient evidence collected by the respondent Enforcement Directorate to prima facie come to the conclusion that the appellant who was Deputy Secretary and OSD in the Office of the Chief Minister, was actively involved in the offence of Money Laundering as defined in Section 3 of the Act. As against that there is nothing on record to satisfy the
conscience of the Court that the appellant is not guilty of the said offence
and the special benefit as contemplated in the proviso to Section 45 of the Act
should be granted to the appellant who is a lady. In the instant case, there is neither discharge nor acquittal nor quashing of the criminal case by the court of
competent jurisdiction against Suryakant Tiwari in the predicate/ scheduled
offence.

Therefore, the Supreme Court did not find any merit on the appeal and dismissed the appeal.

In ‘Kalvakuntla Kavitha v. Directorate of Enforcement’ – 2024 INSC 632, the appellant was arrested under the Act and she applied for bail before the High Court, Delhi.
The High Court refused to grant bail to the appellant. The High Court observed that the appellant is a highly qualified and well accomplished person, having made significant contributions to politics and social work as enlisted by her in her
pleadings. However, the High Court observed that the appellant was one of
the chief conspirators in the entire conspiracy relating to formulation and
implementation of new Excise Policy of Delhi. In fact, some other accused
persons were working on behalf of the applicant and as per her instructions. Therefore, the High Court held that the appellant is not entitled to the benefit of proviso to Section 45 of Act.

Against the order of High Court, the appellant filed the present appeal before the Supreme Court. The appellant contended that no proceeds of crime have been recovered from the appellant.
The appellant is a woman and is therefore entitled to special treatment
under proviso to Section 45(1) of the Act.

The Directorate of Enforcement submitted the following before the Supreme Court-

• The statements of various witnesses as well as co-accused would clearly show that the present appellant was a kingpin in arranging the deal between the co-accused-Arvind Kejriwal and the south lobby.
• the statements of the witnesses clearly show that the proceeds of the crime have passed through, or at least at her instance.
• not only the statements recorded under Section 50 of the Act but also the statements recorded under Section 164 of the Code of Criminal Procedure, 1973 before the learned Magistrate would clearly implicate the present appellant in the trial.
• The Trial Judge has rightly refused to grant the benefit of the proviso to Section 45(1) of the Act on the ground that the appellant is a woman, inasmuch as she has indulged herself into tampering with the evidence and influencing the witnesses.
• The appellant has formatted her mobile set in order to destroy the evidence which was against her.
• The statement of Arun Pillai under Section 50 of the Act was recorded on 10.11.2022 after a period of more than three months, he has retracted the statement on 09.03.2023.
• The first summons was issued to the present appellant on 07.03.2023 i.e., two days prior to the day Arun Pillai retracted his statement.
• Therefore, the Court will have to draw an inference that the appellant is indulging in influencing the witnesses.

The Supreme Court considered the submissions of the parties to the present appeal. The Supreme Court observed that in CBI case charge-sheet has been filed and in ED case complaint has been filed. As such, the custody of the appellant herein is not necessary for the purpose of investigation.
The appellant was in jail for the past 5 months. The prolonged incarceration before
being pronounced guilty of an offence should not be permitted to become punishment without trial.

The Supreme Court reiterated the well-established principle that ‘bail is the rule and refusal is an exception’. The Supreme Court further observed that the
fundamental right of liberty provided under Article 21 of the Constitution is
superior to the statutory restrictions.

The Supreme Court, then, analysed the provisions of Section 45(1) of the Act. The Supreme Court was of the view that the proviso to Section 45(1) of the Act would entitle a woman for special treatment while her prayer for bail is being considered. The accused even if a woman may not be automatically entitled to benefit of the said proviso and it would all depend upon the facts and circumstances of each case.
When a statute specifically provides a special treatment for a certain category of accused, while denying such a benefit, the Court will be required to give specific reasons as to why such a benefit is to be denied.

The Supreme Court further observed that the Single Judge in the present case, while denying the benefit of the proviso to Section 45(1) of the Act, came to a ‘heartening conclusion’ that the appellant is highly qualified and a well-accomplished person. The Single Judge further observed that the appellant has made significant contributions to politics and social work. The Single Judge further
observed that while deciding her bail application, the Court may appreciate her accomplishment, however, it cannot lose sight of the serious allegations levelled by the prosecution and the evidence collected during the course of the investigation and presented before the Court.

The Supreme Court observed that the Single Judge of the High Court has totally misdirected herself while denying the benefit of the proviso to Section 45(1) of the Act. Therefore, the Supreme Court allowed the appeal directing the following-

• The impugned judgment and order dated 01.07.2024 passed by the learned Single Judge of the High Court of Delhi at New Delhi in Bail Application Nos.1675 and 1739 of 2024 are quashed and set aside;
• The appellant is directed to be released forthwith on bail in connection with Complaint Case No.31 of 2022 arising out of ECIR/HIUII/14/2022 dated 22.08.2022, P.S. HIU, Directorate of Enforcement and RC-0032022A0053 dated 17.08.2022, P.S. CBI, ACB, on furnishing bail bonds in the sum of Rs.10,00,000/- in each of the cases;
• The appellant shall not make any attempt to tamper with the evidence or influence the witnesses;
• The appellant shall deposit her passport with the Trial Judge; and
• The appellant shall regularly attend the Trial Court and cooperate with the expeditious disposal of the trial.

Conclusion

As observed by the Supreme Court in ‘Saumya
Chaurasia’ case (supra) the courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 of the Act and similar provisions in the other Acts, as the persons of tender age and women who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements.