Is PMLA twin test applicable to those seeking bail after cognisance is taken? Supreme Court reserves verdict

The Supreme Court on Tuesday reserved its judgment on the question of whether an accused in a money laundering case has to meet the stringent twin test for bail even after the special court takes cognisnace of the offence [Tarsem Lal v. Directorate of Enforcement]..During the course of the hearing, the Bench of Justices Abhay S Oka and Ujjal Bhuyan orally observed that the powers of a criminal court are 'all-pervasive' in this regard."If you appear after summons, there is no question of arrest. But if you don't then court can issue warrants...Our rider is if further investigation or remand is needed, it can only be through special court. Once cognisance is taken, all power rests with the criminal court, all pervasive powers including remand," Justice Oka remarked. .The Bench is examining whether an accused who is not arrested during the period of investigation under the Prevention of Money Laundering Act (PMLA), would also be required to meet the law’s stringent conditions of bail if arrayed as an accused after the trial court takes cognisance of the Enforcement Directorate (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.It will consider whether accused can be arrested by the ED under Section 19 of the PMLA after cognizance of the complaint has been taken by the special court..The counsel for ED today contended that the agency's right to arrest remains in such cases, as more material may continue to be discovered in a case.Advocates Siddharth R Gupta and Mrigank Prabhakar, appearing for an accused, argued that the power to arrest under Section 19 PMLA becomes subservient to the directions of the special court after filing of the complaint under Section 44/45 PMLA Act."No arrest can be made post filing of complaint without the leave of the Court in exercise of the powers u/s 19 ... If the accused has not been arrested during investigation and cooperated with the same, on mere filing of complaint before Special Court, he cannot be taken into custody, nor can ED insist upon the custody on mere filing of the said complaint", Gupta submitted.He, thus, argued that the twin test will not apply to such accused, who are then also entitled to apply for pre-arrest bail once summons are issued.During an earlier hearing, Justice Oka had gone on to say that the ED cannot arrest a person once the complaint is filed."Once complaint is filed, ED does not have power to arrest, only court can. ED cannot arrest in our view, so there can be no power or apprehension, that is all. Without order of the court, once complaint is filed, no one can arrest. Suppose ED summons, 437 (Criminal Procedure Code) prima facie will not apply, so court at most direct them to furnish bond. Limited issues here.".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.The legal questions before the apex court arose in relation to a Punjab and Haryana High Court order denying 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.Senior Advocate Sidharth Luthra with advocates 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 main accused.Additional Solicitor General SV Raju and advocates Zoheb Hossain, Annam Venkatesh, Arkaj Kumar and Mukesh Kumar Maroria appeared for the ED..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.

Is PMLA twin test applicable to those seeking bail after cognisance is taken? Supreme Court reserves verdict

Related Stories