TaxTMI 
TaxTMI 
2022 (1) TMI 1252
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.... the order dated 10.03.2021 and relegated the parties before this Court for reconsideration of Criminal Original Petitions to be decided in accordance with law. 3. Pursuant to the order passed by the Apex Court, the learned counsel on either side made their submissions in the bail petitions. 4. It is not in dispute that the petitioners were arrested by the respondent for the alleged offence under Section 3 of the Prevention of Money Laundering Act (hereinafter referred to as "PMLA") and punishable under Section 4 of PMLA. The petitioners filed petitions in Crl.O.P.Nos.673, 675 and 677 of 2021 seeking for bail. The said petitions were dismissed on 02.02.2021 on the ground that investigation was pending. The Economic Offences Wing of Tamil Nadu Police had registered a case in Crime No.6 of 2016 on 02.06.2016, for the alleged commission of offences under Sections 406, 420, 120B of IPC read with Section 5 of the Tamil Nadu Protection of Interest of Depositors (in Financial Establishment) Act, 1997 (TNPID Act) and they were granted Anticipatory Bail and subsequently, the Anticipatory Bail granted to them came to be cancelled and during their incarceration, the Committee of Adminis....
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....mendment in clause 3 (j), specifically provided: "(j) putting all the offences listed in Part A and Part B of the Schedule to the aforesaid Act into Part A of that Schedule instead of keeping them in two Parts so that the provision of monetary threshold does not apply to the offences." 30. By the Finance Act of 2015, by Section 145, the limit of Rs.30 lakhs in Section 2(y) was raised to Rs.1 crore and in the Schedule after Part A, Part B was populated with only one entry, namely Section 132 of the Customs Act. Certain other amendments were made, by the Finance Act of 2016, to the 2002 Act with which we are not directly concerned. 31. The statutory history of Section 45, read with the Schedule, would, thus show that in its original avatar, as Clause 44 of the 1999 Bill, the Section dealt only with offences under the Act itself. Section 44 of the 2002 Act makes it clear that an offence punishable under Section 4 of the said Act must be tried with the connected scheduled offence from which money laundering has taken place. The statutory scheme, as originally enacted, with Section 45 in its present avatar, would, therefore, lead to the same offenders in diffe....
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.... prosecuted for an offence under the 2002 Act and an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule. In this illustration, the Special Court/High Court would enlarge Mr. X on bail only if the conditions specified in Section 45(1) are satisfied and not otherwise. In the fourth illustration, Section 45 would apply in a joint trial of offences under the Act and under Part A of the Schedule because the only thing that is to be seen for the purpose of granting bail, under this Section, is the alleged occurrence of a Part A scheduled offence, which has imprisonment for over three years. The likelihood of Mr. X being enlarged on bail in the first three illustrations is far greater than in the fourth illustration, dependant only upon the circumstance that Mr. X is being prosecuted for a Schedule A offence which has imprisonment for over 3 years, a circumstance which has no nexus with the grant of bail for the offence of money laundering. The mere circumstance that the offence of money laundering is being tried with the Schedule A offence without more cannot naturally lead to the grant or denial of bail (by applying Section 45(1)) for the....
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....basis of which the Supreme Court had declared Section 45(1) of the PMLA to be unconstitutional was cured and consequently the twin conditions prescribed in Section 45(1) stood revived. 19. The declaration by the Supreme Court in Nikesh Tarachand Shah's case (supra) would render the twin conditions prescribed in Section 45(1) of the PMLA for release of an accused on bail to be void in toto; such conditions have to be disregarded of any legal force from its inception; they cease to be law; the same are rendered inoperative and that they are to be regarded as if they had never been enacted. That being so, the twin conditions for grant of bail under Section 45(1) of the PMLA as are now sought to be pressed into service by the ED cannot be considered to have revived or resurrected only on the prospective substitution of the words 13 of 19 "punishable for a term of imprisonment of more than three years under Part A of the Schedule" with the words "under this Act" especially without there being any amendment with regard to the twin conditions for grant of bail which had specifically been declared to be unconstitutional as also in the absence of any validating law in this rega....
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....nterim order. In these circumstances, the learned Special Public Prosecutor submitted that the amended provisions of section 45 is binding on the petitioners. 6.2 In support of his contention, the learned Special Public Prosecutor appearing for the respondent, has relied upon the following judgments:- (i) 2017(1) SCC 283 [ Cheviti Venkanna Yadav vs State Of Telangana ] wherein the Hon'ble Supreme Court held as follows:- 27. In State of Himachal Pradesh v. Narain Singh (2009) 13 SCC 165 while dealing with the validation of statute the Court ruled that:- "It is therefore clear where there is a competent legislative provision which retrospectively removes the substratum of foundation of a judgment, the said exercise is a valid legislative exercise provided it does not transgress any other constitutional limitation." 28. To arrive at the said conclusion, the two-Judge Bench reproduced from the decision in Constitution Bench in State of T.N. v. Arooran Sugars Ltd (1997) 1 SCC 326 which is to the following effect:- "It is open to the legislature to remove the defect pointed out by the court or to amend the definition or any other p....
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....hree years under Part A of the Schedule shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to Provided that a person, who, is under the age of sixteen there are reasonable grounds for years, or is a woman oris sick or infirm, may be released on bail, if the Special Court so directs: Section 45 - Post Nikesh Tarachand Shah Section 45. Offence to be cognizable and non-bailable. bailable. (2) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to....
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....terim bail till the bail application is decided. CATEGORY. B/D on appearance of the accused in Court pursuant to process issued bail application to b decided on merits, CATEGORY - C Same as Category B & D with the additional condition of compliance of the provisions of bail under NDPS S.37, 45, PMLA, 212(6) Companies Act 43(5) of UAPA, POSCO Act etc." Needless to say that the category A deals with both police cases and complaint cases. The trial courts and the High Courts will keep in mind the aforesaid guidelines while considering bail applications. The caveat which has been put by learned ASG is that where the accused have not cooperate din the investigation nor appeared before the Investigating officers, nor answered summons when the courts feels that judicial custody of the accused is necessary for the completion of the trial, where further investigation including a possible recovery is needed, the aforesaid approach cannot give them benefit, something we agree with. (iv) The order of the Hon'ble Supreme Court made in Miscellaneous Application No.1849 of 2021 in S.L.P. No.5191 of 2021 [Satender Kumar Antil v. Central Bureau....
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....t shall be released on bail or on his own bond". Thus, the contention raised by the petitioner with regard to Section 45 of the Act does not hold good. A similar sentiment has been echoed by the apex court in P. Chidambaram v. Directorate of Enforcement. (2019) 9 SCC 24 ..." (vi) Manu/WB/1498/2018 [Arun Mukherjee v. Enforcement Directorate ] wherein the Division Bench of Calcutta High Court held as follows: "..............14. Mr. Chanda raising serious objection to grant of bail to the petitioner, adverted to the provision of Section 45 of PMLA,2002 and the amendment brought in with effect from 19.4.2018 vide GSR 383 (E) in exercise of powers conferred under Section 207 of the Finance Act, 2018 (13 of 2018) which provisions are reproduced for profitable understanding as under- "S.45. Offences to be cognizable and non-bailable.- (1) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless-- (i) the Public Prosecutor has been given an o....
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.... Directorate of Enforcement] wherein the Division Bench of Delhi High Court held as follows: " ........12. The last limb of argument was qua twin conditions of 45 of the PMLA. Admittedly the Hon'ble Supreme Court in Nikesh Tarachand Shah (supra) declared the Section 45 of the PMLA as it stood then, as unconstitutional and violative of Articles 14 and 21 of the Constitution of India, but the defects pointed out by the Hon'ble Supreme Court in Nikesh Tarachand Shah (supra) were cured by the Legislature and an amendment to section 45(1) was made vide the Finance Act, 2018 (No.13 of 2018). Under the amendment Act, section 45(1) was revived and for the words "punishable for a term of imprisonment of more than three years under part A of the Schedule", the words "under this Act" were substituted in section 45(1) of the PMLA. 13. The Supreme Court in P. Chidambaram vs E.D. (2019) 9 SCC 24 has taken judicial note of such amendment:- 38. The twin conditions under Section 45(1) for the offences classified thereunder in Part A of the Schedule was held arbitrary and discriminatory and invalid in Nikesh Tarachand Shah v. Union of India (2018)11 SCC 1 . Insofar as the ....
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....r case. ......." 7. On a careful consideration of the materials available on record and the submissions made by the learned counsel on either side, it could be seen that the petitioners are the Directors of the Company, viz., M/s. Disc Assets Promoter India Ltd, who are the persons responsible for the affairs of the company and they had collected money from the public under various investment schemes from the year 2006 with a promise to pay attractive returns in the form of loan or cash, but, they had failed to pay the investors of the promised returns and defrauded the investors/public by the said company and caused pecuniary loss to the tune of Rs.1137 crores to the investors. 8. With regard to the investment mobilized from the public, the SEBI, by its interim order dated 20.08.2015 and final order dated 30.03.2016, directed the Company and its Directors to wind up the investment schemes and refund the money due to the investors. However, the Directors had failed to refund the money to the investors. Based on the reference from the SEBI and the complaints received from the investors/public, the Economic Offences Wing of the Tamil Nadu Police registered a case in Crime No.6 ....
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....han Singh vs. Directorate of Enforcement 2020 SCC OnLine Del 766, has also been stayed by the Hon'ble Supreme Court vide its order dated 31.07.2020 in SLP(Crl) No.3474 of 2020. 15. In the Judgment reported in 2018 (11) SCC-1 [cited supra], the Apex Court declared Section 45 of the PMLA as it stood then, as unconstitutional and violative of Articles 14 and 21 of the Constitution of India, but the defects pointed out by the Hon'ble Supreme Court in the said Judgment were cured by the legislature and an amendment to section 45(1) was made vide the Finance Act, 2018 (No.13 of 2018). Under the amendment Act, section 45(1) was revived and for the words "punishable for a term of imprisonment of more than three years under part A of the Schedule", the words "under this Act" were substituted in section 45(1) of the PMLA. 16. No doubt, the legislature has the power to cure the underlying defect pointed out by a Court, while striking down a provision of law and pass a suitable amendment. When such a law is passed, the legislature basically corrects the errors which have been pointed out in a judicial pronouncement. Resultantly, it amends the law, by removing the mistakes commi....