Understanding PMLA Bail: Treated as Guilty Until Proven Innocent

The Twin Conditions Dilemma

The presumption of innocence, a fundamental human right enshrined in Article 21 of the Constitution of India, faces a profound challenge under the Prevention of Money Laundering Act, 2002 (PMLA). The ongoing review by the Supreme Court of its decision in Vijay Madanlal Choudhary v. Union of India raises critical questions about the constitutionality of Section 45 of the PMLA. This section, governing bail conditions pending trial, deviates from the core principle of criminal law that an accused is innocent until proven guilty. Section 45 introduces the controversial “twin conditions,” demanding the accused to prove both their innocence and their likelihood to avoid committing offenses while on bail.

Deciphering the Twin Conditions

The twin conditions stipulate that for a court to grant bail, it must be convinced of two aspects:

1. There are reasonable grounds to believe the accused is “not guilty of such offense.”
2. The accused is “not likely to commit any offense while on bail.”

A critical scrutiny reveals that the initial condition places an onerous burden on the accused, conflicting directly with the hallowed presumption of innocence.

Unraveling Legal Complexity

1. Presumption Reversal: Section 45’s first condition places an unprecedented burden on the accused, shifting the responsibility to demonstrate their innocence. This reversal directly clashes with the presumption of innocence, causing a legal conundrum.
2. Comparative Legal Perspectives: While similar provisions exist in laws concerning drug trafficking and terrorism, each legislation’s constitutional validity must undergo independent scrutiny. This article focuses on whether the twin conditions can withstand constitutional scrutiny within the PMLA framework.
3. Vijay Madanlal Choudhary Case: The Supreme Court’s decision in the Vijay Madanlal Choudhary case upheld Section 45’s constitutionality, relying on the “purposes and objects of the PMLA” and India’s international commitments. However, the authors argue that such reliance, especially concerning Section 45, warrants reconsideration. The twin conditions lack support in the PMLA’s objectives and find no mention in international recommendations, such as those from the Financial Action Task Force (FATF).
4. Nikesh Tarachand Shah Case: In 2017, the Supreme Court, in the Nikesh Tarachand Shah case, declared Section 45 unconstitutional. The provision, as it stood before 2018 amendments, required proving innocence of a different offense, rendering it arbitrary and in violation of the right to life under Article 21. The court emphasized the need for a “compelling State interest” for such drastic provisions, a requirement it found lacking in the context of PMLA offenses.

Legislative Evolution

1. 2018 Amendments: In response to the Nikesh Tarachand Shah ruling, Parliament amended the PMLA in 2018, addressing specific defects. The accused, under the revised Section 45, no longer need to prove innocence of the “scheduled offense” but must establish innocence regarding money laundering.
2. 2022 Revisit: The constitutional validity of Section 45 faced scrutiny again in the 2022 Vijay Madanlal Choudhary case. A three-judge bench asserted that Parliament rectified previous defects, aligning the provision with constitutional principles.

Legal Arguments

1. Petitioner’s Stand: The petitioners argue that even post-amendments, the presumption of innocence reversal remains arbitrary, violating fundamental rights. The twin conditions, they contend, impose disproportionate and excessive burdens on securing bail.
2. Union of India’s Defense: The Union of India defends the PMLA’s provisions, emphasizing the need to judge them in the light of international obligations. Stringent bail conditions, it asserts, align with FATF recommendations, providing an effective mechanism to combat money laundering.

Supreme Court’s Verdict

1. Disagreement with Previous Observations: The Supreme Court disagreed with the earlier notion that PMLA offenses lacked a compelling State interest, citing the international concern over money laundering. It upheld the “twin conditions,” citing the PMLA’s unique nature as legislation dealing with transnational money-laundering activities.
2. Reliance on Purpose and FATF Recommendations: The Court leaned on the purposes and objects of the PMLA, coupled with FATF recommendations and India’s international commitments, to justify Section 45’s constitutionality. It deemed the provision reasonable and directly aligned with the PMLA’s objectives.

Unveiling the Legal Void

1. Legislative Silence: Examination of the PMLA’s preamble, objectives, and legislative debates reveals no specific discourse on the harsh bail conditions under Section 45. Questions on its severity in parliamentary debates remain unanswered.
2. FATF Contradictions: Despite Union of India’s reliance on FATF recommendations, the FATF acknowledges misapplications impacting human rights. International treaties like the ICCPR affirm the right to be presumed innocent until proven guilty.

A Call for Reconsideration

In the authors’ respectful view, neither the PMLA’s objectives nor India’s international commitments necessitate such rigorous bail conditions. The constitutional validity of Section 45, as upheld in the Vijay Madanlal Choudhary case, might require a reassessment by the Supreme Court.

Conclusion

The intricate dance between legal principles and international commitments reveals a complex web surrounding Section 45 of the PMLA. As the Supreme Court stands by its decision, the authors propose a revisitation, urging a fresh look at the constitutional implications of the “twin conditions.”