JUDGEMENT OF THE HON’BLE SUPREME COURT OF INDIA IN THE CASE TITLED “NIKESH TARACHAND SHAH VS. UNION OF INDIA & ANR., (2017) 11 SC CK 0060” CONCERNING OFFENCES UNDER PREVENTION OF MONEY LAUNDERING ACT
Nikesh Tarachand Shah
vs. Union of India & Anr., (2017) 11 SC CK 0060
PARA NO. 2 & 28
2. The present writ petitions and appeals raise
the question of the constitutional validity of Section 45 of the Prevention of
Money Laundering Act, 2002. Section 45(1) imposes two conditions for grant of
bail where an offence punishable for a term of imprisonment of more than 3 years
under Part A of the Schedule to the Act is involved. The conditions are that
the Public Prosecutor must be given an opportunity to oppose any application
for release on bail and the Court must be satisfied, where the Public
Prosecutor opposes the application, 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.
28. Another interesting feature of Section 45 is that the
twin conditions that need to be satisfied under the said Section are 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. The expression "such offence" would be relatable only to an
offence in Part A of the Schedule. Thus, in an application made for bail, where
the offence of money laundering is involved, if Section 45 is to be applied,
the Court must be satisfied that there are reasonable grounds for believing
that he is not guilty of the offence under Part A of the Schedule, which is not
the offence of money laundering, but which is a completely different offence.
In every other Act, where these twin conditions are laid down, be it the
Terrorist and Disruptive Activities (Prevention) Act, 1987 or the Narcotic
Drugs and Psychotropic Substances Act, 1985, the reasonable grounds for
believing that the accused is not guilty of an offence is in relation to an
offence under the very Act in which such section occurs. (See for example, Section
20(8) of TADA and Section 37 of the NDPS Act). It is only in the 2002 Act that
the twin conditions laid down do not relate to an offence under the 2002 Act at
all, but only to a separate and distinct offence found under Part A of the
Schedule. Obviously, the twin conditions laid down in Section 45 would have no
nexus whatsoever with a bail application which concerns itself with the offence
of money laundering, for if Section 45 is to apply, the Court does not apply
its mind to whether the person prosecuted is guilty of the offence of money
laundering, but instead applies its mind to whether such person is guilty of
the scheduled or predicate offence. Bail would be denied on grounds germane to
the scheduled or predicate offence, whereas the person prosecuted would
ultimately be punished for a completely different offence -namely, money
laundering. This, again, is laying down of a condition which has no nexus with
the offence of money laundering at all, and a person who may prove that there
are reasonable grounds for believing that he is not guilty of the offence of
money laundering may yet be denied bail, because he is unable to prove that
there are reasonable grounds for believing that he is not guilty of the
scheduled or predicate offence. This would again lead to a manifestly
arbitrary, discriminatory and unjust result which would invalidate the Section
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