Bail restrictions under money-laundering law fail constitutional scrutiny when they are arbitrary, discriminatory, and unfair.

Section 45(1) of the Prevention of Money Laundering Act imposed twin bail conditions that linked release on bail to the existence and punishment of a separate scheduled offence, rather than to the money-laundering offence itself. That classification lacked a rational connection with the Act's object of addressing money-laundering and proceeds of crime, and it produced unequal and anomalous treatment, including inconsistent treatment of anticipatory bail and regular bail. The provision also reversed the ordinary presumption of innocence by requiring the accused to show reasonable grounds for believing he was not guilty. For these reasons, the twin conditions were held unconstitutional as manifestly arbitrary, discriminatory, and incompatible with Articles 14 and 21.

---

---

Issues: Whether the twin conditions for grant of bail under Section 45(1) of the Prevention of Money Laundering Act, 2002 were constitutionally valid and could be sustained under Articles 14 and 21 of the Constitution of India.

Analysis: Section 45(1) made bail in money-laundering cases depend not on the offence of money laundering itself, but on the court's satisfaction regarding a separate scheduled offence under Part A of the Schedule. The classification turned on the sentence prescribed for the predicate offence, which had no rational connection with the object of the Act, namely, dealing with money laundering and proceeds of crime. The provision also produced anomalous and unequal results, because the same accused could be treated differently depending on whether a scheduled offence accompanied the money-laundering charge, and because anticipatory bail and regular bail were placed on inconsistent footing. The twin conditions further inverted the ordinary presumption of innocence by requiring the accused to show reasonable grounds for believing that he was not guilty, even though the enquiry should relate to the offence under the Act. These features rendered the provision manifestly arbitrary, discriminatory, and incompatible with fair procedure.

Conclusion: Section 45(1), insofar as it imposed the twin conditions for release on bail, was held unconstitutional as violative of Articles 14 and 21.

Ratio Decidendi: A bail restriction is unconstitutional if it makes liberty depend on a classification unrelated to the offence under the statute and imposes a procedure that is manifestly arbitrary, discriminatory, and not fair, just, and reasonable.

---