[Section 45 PMLA] Twin conditions for bail stand revived after 2018 amendment: Bombay High Court

The Nagpur Bench of the Bombay High Court recently held that the twin conditions for bail under Section 45(1) of the Prevention of Money Laundering Act (PMLA) declared unconstitutional by the Supreme Court stood revived in view of the legislative intervention through the PMLA Amendment of 2018. [Ajay Kumar v. ED].The twin conditions which now stand revived are:the public prosecutor must be given an opportunity to oppose bail;after such opposition the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence or is not likely to commit any offence while on bail..A Bench of Justices VM Deshpande and Vinay Joshi said that it is for the legislature to give effect to the amending provisions prospectively or retrospectively.The Court opined that “the section as it stood after amendment has to be read as it stands” and “has to be read as a whole”.“Unless the amended provision is struck down by the Courts, it cannot be watered down. Since after the amendment the entire complexion of section 45 has been changed, we are not in agreement with the contention that the entire section has to be re-enacted by way of amendment after decision in the case of Nikesh Shah,” the Court said.The Court opined that the twin conditions would revive and operate by virtue of the amendment act that is in force.In view of this, the Court answered the reference by stating that “the twin conditions in section 45(1) of the 2002 Act, which was declared unconstitutional by the judgment of the Apex Court in Nikesh T.Shah Vs. Union of India, stand revived in view of the legislative intervention vide Amendment Act.”.The amendment of 2018 was brought by way of an ordinance, where the offences were now referred to “under the Act” instead of offences referred to “under Part A of the Act”.In view of this amendment, in cases with charges of money-laundering but not scheduled offence under Part A, the accused is now required to satisfy the twin conditions before any grant of bail..The decision by the High Court came after a reference was made to the Division Bench due to conflicting views expressed by single-judges regarding the effect of the amended Section 45 of PMLA.Essentially, the reference arose out of the bail application of Ajay Kumar, accused in a money-laundering case.During the course of hearing, Kumar’s counsel canvassed that the rigour of complying with duel conditions under Section 45 would not apply in view of the Supreme Court decision in Nikesh Tarachand Shah v. Union of India.The ED opposed the submission stating that due to subsequent amendment, twin conditions would revive, as it cured the defects pointed out in the Supreme Court judgment.After examining the rival submissions, the single-judge expressed his inability to concur with the view taken in two decisions of the High Court which is Sameer Bhujbal v. Assistant Director, Directorate of Enforcement and Union of India v. Yogesh Narayanrao Deshmukh and referred the matter to larger Bench..Notes on PMLA Act : Section 45 and the “twin conditions” post amendment.Senior Advocate SV Manohar with Advocates DV Chavan and GS Gour appeared for Kumar.Additional Solicitor General Anil Singh along with Advocates Aditya Thakkar, Mugdha Chandurkar and Divya Gontia appeared for ED.[Read Judgment]

[Section 45 PMLA] Twin conditions for bail stand revived after 2018 amendment: Bombay High Court

Neha Joshi

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