SC underlines: Bail is the rule, jail exception even in PMLA cases, Article 21 higher right

Writing for the bench, Justice Viswanathan said in the Madanlal Choudhary judgment, the Court had “categorically held that while Section 45 of PMLA restricts the right of the accused to grant of bail, it could not be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail”.

He said “these observations are significant and if read in the context of the recent pronouncement of this Court dated 09.08.2024” granting bail to former Delhi Deputy Chief Minister Manish Sisodia in the CBI and ED cases against him, “it will be amply clear that even under PMLA, the governing principle is that ‘Bail is the Rule and Jail is the Exception’.”

In the Sisodia case, the Court had said that “on account of non-grant of bail even in straightforward open-and-shut cases, this Court is flooded with a huge number of bail petitions, thereby adding to the huge pendency. It is high time that the trial courts and the High Courts… recognize the principle that ‘bail is the rule and jail is the exception’.”

The bench, in its ruling Wednesday, said, “all that Section 45 of PMLA mentions is that certain conditions are to be satisfied. The principle that, ‘bail is the rule and jail is the exception’ is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law. Liberty of the individual is always a Rule and deprivation is the exception. Deprivation can only be by the procedure established by law, which has to be a valid and reasonable procedure”.

“Section 45 of PMLA, by imposing twin conditions, does not rewrite this principle to mean that deprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied,” it said.

The bench said that as has been held in many cases, “where the accused has already been in custody for a considerable number of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty”.

It said that as held in the Sisodia judgment, “keeping persons behind the bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution of India and that prolonged incarceration before being pronounced guilty ought not to be permitted to become the punishment without trial”.

It said while applying Section 45 of PMLA, “Article 21 being a higher constitutional right, statutory provisions should align themselves to the said higher constitutional edict”.

In Vijay Madanlal Choudhary, the Court held that the prosecution must establish at least three foundational facts. “First, that the criminal activity relating to a scheduled offence has been committed. Second, that the property in question has been derived or obtained, directly or indirectly, by any person as a result of that criminal activity. Third, the person concerned is, directly or indirectly, involved in any process or activity connected with the said property being proceeds of crime”.

Wednesday’s judgment said “in view of the importance of the three basic foundational facts that the prosecution needs to establish, the counter/response to the bail application in the original Court is very significant in PMLA bail matters”.

It said “in cases where the Public Prosecutor takes a considered decision to oppose the bail application, the counter-affidavit of the Investigating Agency should make out a cogent case as to how the three foundational facts set out hereinabove are prima facie established in the given case to help the Court at the bail application stage to arrive at a conclusion within the framework laid down in Vijay Madanlal Choudhary. It is only thereafter the presumption under Section 24 would arise and the burden would shift on the accused”.

“The counter to the bail application should specifically crystallize, albeit briefly, the material sought to be relied upon to establish prima facie the three foundational facts. It is after the foundational facts are set out that the accused will assume the burden to convince the court within the parameters of the enquiry at the Section 45 stage that for the reasons adduced by him there are reasonable grounds to believe that he is not guilty of such offence,” it said.

The bench also said, “We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice”.

It said “a person in judicial custody, being not a free person, cannot be summoned and any statement to be recorded will be after obtaining the permission of the Court which has remanded him to the judicial custody in the other case”.