PMLA twin test for bail not applicable to accused not arrested by ED during probe: Supreme Court

The Supreme Court on Thursday held that an accused who is not arrested by the Enforcement Directorate (ED) during money laundering probe but appears before the special court pursuant to the summons issued by such court under Prevention of Money Laundering Act (PMLA) need not satisfy stringent twin test for bail under Section 45 PMLA [Tarsem Lal v. Directorate of Enforcement]..Section 45 of the PMLA requires a court to provide the Public Prosecutor an opportunity to oppose the bail application of the accused. It also states that the court can release the accused only if satisfied that there are reasonable grounds for believing that he is not guilty of the offence and that he is not likely to commit any offence while on bail.These conditions make it difficult for a money laundering case accused to get bail."If the accused appears before special court by summons (by court) ,it cannot be treated that he is in custody," the Supreme Court said.Hence, such a person need not satisfy the twin condition for bail under PMLA, the Court made it clear."Accused who appeared before the court pursuant to the summons not required to apply for bail, and thus twin conditions of Section 45 of PMLA not applicable," the judgment stated..A Bench of Justices Abhay S Oka and Ujjal Bhuyan further said that in such a case where accused appears before court pursuant to summons, the ED will have to apply to the concerned court to get the custody of the accused."If ED wants custody of accused after the person appears after summons, ED can get custody after application to special court. Court will only grant custody with reasons satisfying that custodial interrogation is needed," the apex court held..The verdict came in a case dealing with the question of whether an accused in a money laundering case has to meet the stringent twin-test for bail even in cases where the special court takes cognisnace of the offence.The Supreme Court had on April 30 reserved its judgment in the matter.The Bench was examining whether an accused who is not arrested during the period of investigation under PMLA, would also be required to meet the law’s stringent conditions of bail if he appears before court after the trial court takes cognisance of ED complaint and summons such person.The top court raised the question of whether the accused can apply for bail under regular provisions of the Code of Criminal Procedure (CrPC) if he appears pursuant to the summons issued by the special court under the PMLA.During one of the hearings, Justice Oka had said that the ED cannot arrest a person once the complaint is filed..The legal questions before the apex court in the instant arose in relation to a Punjab and Haryana High Court order,The same had denied pre-arrest bail to several accused in a money laundering case connected to an alleged land scam involving revenue officials.The top court in January had granted the accused interim protection.In November 2017, the top court had struck down Section 45(1) of the PMLA to the extent it imposed the two additional conditions for grant of bail to money-laundering accused.The provision was revived later by the Centre after it made certain amendments to the PMLA.Pertinently, the 2017 decision of the top court was overruled in July 2022 by a Bench of Justices AM Khanwilkar, Dinesh Maheshwari and CT Ravikumar in the case of Vijay Madanlal Choudhary v. Union of India.The 2022 ruling invited vehement criticism and led to several review applications being filed.Retired Supreme Court judge Justice Rohinton Fali Nariman had in March last year termed the decision very unfortunate.Former Chief Justice of India (CJI) UU Lalit had also endorsed the same view and opined that in Indian criminal jurisprudence, the principle is not guilty until proven to be innocent.The Supreme Court in August 2022 issued notice to the Central government in review plea filed by Congress leader Karti Chidambaram challenging the Vijay Madanlal ruling..Senior Advocate Sidharth Luthra with Advocates Siddharth R Gupta and Mrigank Prabhakar, Harshit Sethi, Nikilesh Ramachandran, Mansi Tripathi, Manmeet Singh Bindra, Nikhil Jain, Divya Jain, Rhail Mahajan, Shubham Seth, Anuj Panwar, Kamal Verma and Lovekesh Aggarwal appeared for the accused.Additional Solicitor General SV Raju with Advocates Zoheb Hossain, Annam Venkatesh, Arkaj Kumar and Mukesh Kumar Maroria appeared for the ED..[Read judgment]