2017 (7) TMI 1056 - SC - Money Laundering

Supreme Court Mandates PMLA Compliance for Bail in Economic Offenses

UNION OF INDIA Versus VARINDER SINGH @ RAJA & ANR.

The Supreme Court held that compliance with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) is mandatory when granting bail to ... Bail application - offence under PMLA - nature of offence - Held that:- It is the case where the appellant is not only involved in the PMLA but also in the Narcotic Drugs and Psychotropic Substances Act, 1985 (in short 'the NDPS Act'). Without complying with the requirements of Section 45 of the PMLA, the High Court should not have granted the bail. As such the impugned order is set aside. Issues: Compliance with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) while granting bail.In this judgment, the Supreme Court addressed the issue of compliance with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) when granting bail. The Court noted that the High Court failed to adhere to the requirements of condition (ii) of Section 45 of the PMLA while granting bail. The Court referred to the case of Gautam Kundu vs. Directorate of Enforcement, emphasizing the significance of Section 45 of the PMLA in dealing with money laundering offenses. The Solicitor General argued that money laundering is a serious economic offense, and bail should be an exception for money launderers. The Court highlighted that PMLA is a special statute enacted by Parliament to combat money laundering, and its provisions prevail over general provisions of the Criminal Procedure Code in case of conflict.Furthermore, the Court emphasized that Section 45 of the PMLA imposes two mandatory conditions for granting bail to individuals accused of offenses punishable for more than three years under Part-A of the Schedule to PMLA. These conditions include giving the prosecutor an opportunity to oppose bail and ensuring that the accused is not likely to commit further offenses while on bail. The Court underscored the overriding effect of PMLA's provisions over the general provisions of the Criminal Procedure Code, emphasizing the mandatory nature of complying with the conditions specified under Section 45 of the PMLA, even in bail applications made under Section 439 of the Criminal Procedure Code.Additionally, the Court highlighted that Section 45 of the PMLA prevails over general provisions of the Criminal Procedure Code, and the conditions specified under PMLA must be followed. The Court noted that the appellant was involved in offenses under the PMLA and the Narcotic Drugs and Psychotropic Substances Act, 1985. The Court set aside the High Court's order granting bail, emphasizing that without complying with the requirements of Section 45 of the PMLA, bail should not have been granted. Consequently, the Court allowed the appeal and directed the respondents to be arrested immediately.