Summary
A former Tamil Nadu minister charged with money laundering arising from a cash-for-jobs scam was granted bail by the Supreme Court. The Court found a prima facie case against him, but he had spent over 15 months in custody, and with more than 2000 accused and over 600 witnesses in the uncharged scheduled offences, neither those trials nor the PMLA trial could end within a reasonable time. Continued detention would breach his Article 21 right to a speedy trial, so bail was granted on stringent conditions.
Issues
- Whether, on the material relied on by the Enforcement Directorate, there was a prima facie case against the appellant for the offence under Section 3 of the PMLA.
- Whether the stringent bail conditions under Section 45(1)(ii) of the PMLA bar bail where the accused has been held a long time and the trial of the scheduled offences and the PMLA offence cannot end within a reasonable time.
- Whether the risk that the appellant, an influential politician, would influence witnesses justified refusing bail or could be met by conditions.
Provisions considered
- Section 3, Prevention of Money Laundering Act, 2002The Court quoted the definition of money laundering and held that proceeds of crime must exist for the offence; their existence can be proved at the PMLA trial only if the scheduled offence is established. (¶¶ 19, 20, 21)
- Section 2(1)(u), Prevention of Money Laundering Act, 2002The definition of proceeds of crime, quoted by the Court, ties them to criminal activity relating to a scheduled offence, making a scheduled offence a sine qua non; hence the PMLA case cannot be finally decided until the scheduled-offence trials end. (¶¶ 20, 21)
- Section 4, Prevention of Money Laundering Act, 2002The punishment is three to seven years, or up to ten years where the scheduled offence falls under paragraph 2 of Part A of the Schedule. As no such offence was alleged, the appellant faced at most seven years, against which his custody of over 15 months was weighed. (¶¶ 14, 27)
- Section 45(1)(ii), Prevention of Money Laundering Act, 2002Treated as a higher bail threshold that overrides the ordinary bail provisions of the CrPC. The Court held it gives the State no power to detain an accused for an unreasonably long time and does not displace the constitutional courts' power to grant bail for violation of Part III. (¶¶ 7, 24, 25, 26, 27)
- Section 44(1)(c) and (d), Prevention of Money Laundering Act, 2002Noted that sessions-trial procedure applies to the PMLA prosecution, that the scheduled-offence trials can be transferred to the Special Court, and that no charge had yet been framed in the PMLA case. (¶ 18)
- Article 21, Constitution of IndiaContinued detention when the trial is unlikely to finish within a reasonable time was held to infringe the right to a speedy trial, justifying bail despite the statutory restrictions. (¶¶ 22, 23, 26, 27, 29)
- Articles 32 and 226, Constitution of IndiaThe constitutional courts may grant bail under these jurisdictions for violation of Part III, notwithstanding stringent statutory bail conditions; the power is discretionary. (¶ 27)
Held
- At the bail stage there was no reason to doubt the authenticity of the pen-drive files, of which the scheduled-offence court had supplied printouts. The cash deposit of Rs. 1.34 crores could not be accepted as MLA pay or agricultural income without prima facie proof, so it could not be said that no prima facie case existed. (¶ 13)
- As charges had not been framed in the scheduled offences, more than 2000 accused had to be heard on charge and over 600 witnesses examined, the scheduled-offence trials could not end even within three to four years. The PMLA case cannot be finally decided before them, so neither trial could conclude within a few years. (¶¶ 15, 16, 17, 21)
- Statutes such as the PMLA, the UAPA and the NDPS Act set a higher bail threshold because of the gravity of the offences, so the requirement of a speedy trial must be read into them. Inordinate delay and a higher bail threshold cannot go together, and such provisions cannot become a tool to hold an accused without trial for an unreasonably long time. (¶¶ 24, 25)
- Following K.A. Najeeb, the rigours of stringent bail provisions melt down where the trial is unlikely to finish within a reasonable time and the custody already undergone is a substantial part of the prescribed sentence. Otherwise long detention under such provisions may violate Article 21. (¶¶ 22, 26)
- What is a reasonable time depends on the minimum and maximum sentence, the stringency of the bail conditions and any statutory outer limit for trial. Where the PMLA trial is likely to be prolonged beyond reasonable limits, the constitutional courts should consider granting bail and must not let Section 45(1)(ii) become an instrument for the ED to prolong detention. (¶ 27)
- This jurisdiction is discretionary. It may be declined where the delay is substantially attributable to the accused, or where his antecedents make him a real threat to society if released. (¶ 27)
- The Court observed that some day the courts will have to consider whether a clean acquittal after very long undertrial custody, excluding cases of hostile witnesses or bona fide defective investigation, may violate Article 21 and give rise to a claim for compensation. (¶ 28)
- Because the appellant's influence may have produced the compromises between bribe givers and takers in the scheduled offences, the risk of tampering with evidence was met by stringent bail conditions rather than by refusing bail. (¶¶ 29, 30)
Result
Appeal allowed; the appellant enlarged on bail until disposal of CC No. 9 of 2023. Conditions: bond of Rs. 25 lakhs with two sureties; no contact with witnesses or victims; twice-weekly reporting to the ED and monthly to the investigating officers; surrender of passport; regular attendance in court; bail liable to cancellation for frivolous adjournments or obstruction.