| Feature |
Provisions and Background |
Supreme Court Verdict |
| On Grounds of Arrest |
- Provision: Section 19 of the PMLA gives the ED the power of arrest if the material it possesses gives it reason to believe an individual is guilty of money laundering.
- Vijay Madanlal Choudhary v. Union of India (2022): The ED is not bound to supply the accused with a copy of the Enforcement Case Information Report (similar to an FIR), and is only bound to inform them of the grounds for arrest.
- Pankaj Bansal v Union of India (2023): An accused has a fundamental right to be informed of the grounds of arrest under Article 20 of the Constitution of India.
- Written grounds of arrest must be given “as a matter of course and without exception”. Without this, the arrest would be illegal and invalid.
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- The accused must be informed of the grounds of arrest “as soon as may be”.
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| On Bail for Undertrials |
- Provision: Section 436A has since been replaced by Section 479 of the Bharatiya Nagarik Suraksha Sanhita.
- A new explanation in the section states that if multiple cases are pending against someone (in money laundering cases), the section on bail will not apply.
- Vijay Madanlal Choudhary v. Union of India (2022): The bench held that this would apply to PMLA as well.
- The court affirmed this in Ajay Ajit Peter Kerkar v Directorate of Enforcement.
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- The court extended the application of Section 436A of the Code of Criminal Procedure, 1973, to the PMLA, affirming that individuals detained for up to half the maximum period of imprisonment for the alleged offence must be released on bail.
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| On Need and Necessity to Arrest: |
- Provision: Section 19(1) provides that the ED must have “reason to believe” that the accused is “guilty”.
- Example: On July 12, the apex court granted interim bail to Delhi Chief Minister.
- He claimed that the material forming the basis of his arrest was available to the ED in July 2023, while the arrest only happened in March 2024.
- The court also referred the issue of whether “need and necessity to arrest” is a valid ground for challenging an arrest under the PMLA to a five-judge bench.
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- The court emphasised that the ED’s “reason to believe” that the accused is guilty must be backed by admissible evidence, setting a high threshold for justifying arrests.
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| On relaxing Twin Conditions |
- Provision: Section 45 of the PMLA provides stringent “twin conditions” for bail, requiring an accused to prove that he has not committed an offence under the PMLA (reversing the standard burden of proof in criminal cases) and is not likely to commit any offence while on bail.
- Example: A bench granted bail to former Delhi Deputy CM in the Delhi excise policy case.
- Since he was incarcerated for around 17 months without trial commencing.
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- The bench held that these conditions can be “relaxed” if the accused has undergone a long period of incarceration.
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| On Bail Exception for Women |
- Judgment by Delhi High Court: It denied bail to Kavitha in July because she was “well educated” and could not be considered a “vulnerable woman” under the exception.
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- The court granted bail to BRS leader K Kavitha on August 27 in the excise policy case and held that exception in Section 45 states that a woman “may be released on bail, if the Special Court so directs”.
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| On Confession to ED Officer |
- Provision: Section 50 of the PMLA allows the ED to summon “any person” and require them to make statements during an investigation.
- Under Section 25 of the Evidence Act, 1872 (now Section 23 of the Bharatiya Sakshya Adhiniyam, 2023), confessions made to police officers are not admissible as evidence during trial.
- Vijay Madanlal Choudhary v. Union of India (2022): The court held that this did not violate the right against self-incrimination under Article 20(3) of the Constitution.
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- In Prem Prakash v Union of India (2024), the bench held that a person in custody is “not a person who can be considered as one operating with a free mind”.
- Evidence through “compelled testimony”, obtained through coercive methods, would violate the right against self-incrimination.
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September 2, 2024
