Bail under PMLA: interpretation by SC, HCs of the law on the exception for women

The court granted bail to the woman, a government school teacher named Shashi Bala.

PMLA and exception

Section 45 of the PMLA, which provides for bail, puts the onus on the accused seeking bail to prove that there is no prima facie case against them. This is similar to the stringent bail standard under the anti-terror law Unlawful Activities (Prevention) Act, 1967 (UAPA).

Section 45(1) reads: “No person…shall be released on bail or on his own bond unless (i) the Public Prosecutor has been given an opportunity to oppose the application…; 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 commit any offence while on bail.”

However, there is an exception to this bail standard, which applies to minors, women, and sick people:

“Provided that a person, who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail, if the Special Court so directs.”

This exception is similar to exemptions under the Indian Penal Code, 1860 (IPC) for women and minors.

Legal precedent

In 2023, Delhi High Court granted bail to Preeti Chandra, wife of Sanjay Chandra, who was the Director of M/s Unitech Group, underlining the exception for women. The HC rejected the ED’s argument that the accused was not entitled to the benefit of the exception because she was not a “household lady”.

“…To argue what kind of woman is entitled to fall within the proviso to section 45(1) PMLA by creating an ad-hoc illusionary sub-classification of educated women, business women, women belonging to high social strata, within the broader classification of “woman”….is misconceived,” the court said.

However, to be eligible for bail, the accused must not be a “flight risk” or “tamper witnesses”, the court said. (Preeti Chandra vs Directorate of Enforcement, June 14, 2023)

In April 2024, however, a trial court in Delhi denied interim bail to Bharat Rashtra Samithi (BRS) leader K Kavitha in the Delhi excise scam case, observing that it was not “obligatory” or “mandatory” for the court to follow the exception.

Judge Kaveri Baweja observed that Kavitha was “well-educated” and a “well-placed woman in the society”, and could not be considered a “vulnerable” woman for the purposes of the exception under the PMLA.

(Kavitha was subsequently given bail by the Supreme Court.)

Case of Shashi Bala

The ED is investigating alleged fraud by Shine City Group and its promoter Rasheed Naseem, who, according to a May 2024 release by the agency, “collected huge amount of money (approximately Rs 800-1000 Crore) from the public…and promised huge returns on such investment”.

“However, no such returns were given to the investors and they were cheated by the accused by way of committing fraud,” the ED said.

Shashi Bala is one of several individuals accused of assisting Naseem in money laundering and concealing the proceeds of crime. The ED has alleged that she was Naseem’s main confidant, and received more than Rs 36 lakh as a part of the money laundering exercise.

Shashi Bala was arrested in November 2023, and her plea for bail was denied by Allahabad High Court in September 2024.

The HC held that she was in contact with Naseem, who is absconding, and “coupled with the proportion of fraud committed”, she does not fall under the category of a “vulnerable woman” and would not be entitled to bail under the exception for women under Section 45 of the PMLA.

Shashi Bala appealed to the SC, and in December 2024, the ED argued before the court that the exception should not be available to her. On January 15, Justice Oka said: “If people who appear for the Union of India do not know basic provisions of law why should they appear in the matter?”