Powers of ED are Uphold under PMLA Act: SC

The Supreme Court ruled that the advantageous provision of Section 436A of the Criminal Procedure Code could be invoked by a defendant arrested for an offence punishable under the 2002 Prevention of Money Laundering Act.

Section 436A CrPC must be construed as a statutory bail provision similar to Section 167 CrPC, the bench of Justices AM Khanwilkar, Dinesh Maheshwari, and CT Ravikumar stated in a ruling upholding the constitutionality of "twin conditions" for bail under amended Section 45 PMLA.

In a case decided very recently, another Supreme Court bench [in Satender Kumar Antil vs Central Bureau Of Investigation | 2022 LiveLaw (SC) 577] held that Section 436A CrPC would apply to Special Acts in the absence of a specific provision.

In the present case, even though the issue of the applicability of Section 436A was not raised by the petitioners, the bench took note of it when determining whether the rigours of the twin conditions in Section 45 PMLA would apply to an application for anticipatory bail filed under Section 438 CrPC. This question was answered positively by the court. It held that the underlying principles and rigours of Section 45 must be applied regardless of the form the relief takes, including the nature of the proceedings, whether under Section 438 of the 1973 Code or by invoking the jurisdiction of the Constitutional Court.

In this context, the court observed that an exception may need to be carved out to the strict compliance of the twin conditions in the form of Section 436A CrPC. The court made the following observations about the provisions and the intent behind them:

Not proper to deny relief under Section 436A CrPC To PMLA Suspects

In their written submissions, the Union of India also acknowledged the right to a speedy trial and access to justice as fundamental rights, and thus argued that, in limited circumstances, the right to bail may be granted in cases of Article 21 violations. In addition, it should be noted that Section 436A of the 1973 Code was added after the 2002 Act was passed. Therefore, it would not be proper to deny the relief of Section 436A of the 1973 Code, which is a beneficial provision for a person charged under the 2002 Act. Nevertheless, Section 436A of the 1973 Code does not provide an absolute right to bail, as does Section 167 of the 1973 Code in the case of default bail. For, in a case's factual circumstances, the court may still deny relief on the basis of a valid reason, such as when the accused himself delayed the trial.

Recognition of the accused's right to a prompt trial under the Constitution

The court also noted that Section 436A is comparable to the statutory bail provision or, so to speak, the default bail, to be granted pursuant to Section 167 of the 1973 Code in the event that the investigating agency fails to file the chargesheet within the statutory period and, in the context of the 2002 Act, the complaint within the specified period after the arrest of the person concerned.

In accordance with Section 167 of the Code of 1973, an inalienable right accrues to the accused if the investigating agency fails to file the chargesheet/complaint within the prescribed time frame. The provision in the form of Section 436A of the 1973 Code, as it now exists, is in recognition of the constitutional right of the accused to a speedy trial under Article 21 of the Constitution. Indeed, it is the fervent wish of every accused, who is in custody in particular, that he/she be tried expeditiously — so as to uphold the principles of speedy justice. If the trial cannot proceed after the defendant has served one-half of the maximum period of imprisonment permitted by law, there is no reason to deny him this lesser relief of considering his request for release on bail or bond, as the case may be, with appropriate conditions, such as ensuring his/her presence during the trial.

The State is required by the Constitution to expedite the conclusion of all trials.

The court rejected the Solicitor General's argument that this interpretation may have an effect on the PMLA's objectives and is akin to the superimposition of Section 436A CrPC over Section 45 PMLA. These observations were made by the bench:

When strict bail provisions are in effect, it is the state's constitutional obligation to ensure that trials are concluded expeditiously and within a reasonable timeframe. If a person is detained for up to one-half of the maximum term of imprisonment specified by law and is still awaiting trial, the State has failed to protect the constitutional rights of its citizens, including the accused.

Section 436A of the 1973 Code is a healthy, beneficial provision for enforcing the right to a speedy trial guaranteed by Article 21 of the Constitution. It merely specifies the outer limits within which the trial is expected to be concluded; if these limits are not met, the accused should not be detained further. In fact, Section 436A of the 1973 Code contemplates that the relief under this provision cannot be granted mechanically, unlike Section 167's default bail. Under Section 436A of the 1973 Code, however, the Court is required to evaluate the relief on a case-by-case basis. As the provision itself recognises that, in a given case, the Court may extend the detention beyond one-half of the period, for which written reasons must be recorded, and by imposing such terms and conditions as to ensure that, after release, the accused makes himself/herself available for the speedy conclusion of the trial.

Unless the stringent conditions are met, it is the State's duty to ensure that such trials receive priority and are concluded within a reasonable time, at least before the accused is detained for up to one-half of the maximum term of imprisonment specified by law for the offence in question. [Note that this provision (Section 436A of the 1973 Code) is inapplicable to defendants charged with crimes punishable by death]

It is necessary to interpret Section 436A as a bail statute.

Consequently, in our view, Section 436A must be interpreted as a bail statute similar to Section 167 of the 1973 Code. Notably, the learned Solicitor General acknowledged during the oral arguments and reaffirmed in the written notes that the mandate of Section 167 of the 1973 Code would apply in full force to cases falling under Section 3 of the 2002 Act, which pertains to money laundering offences. Using the same reasoning, we must conclude that Section 436A of the 1973 Code could be invoked by an accused arrested for an offence punishable under the Act of 2002, which provides for statutory bail.

D.D: - 27-07-2022

VIJAY MADANLAL CHOUDHARY & ORS. VERSUS UNION OF INDIA & ORS.