Nikesh Tarachand Shah v. UOI & Anr.

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The Tax Publishers 2017 TaxPub(CL) 0891 (SC) Nikesh Tarachand Shah v. UOI & Anr. PREVENTION OF MONEY LAUNDERING ACT, 2002 --Offences to be cognizable and non bailable --Challenged constitutional validityImposed two conditions for grant of bail --Conditions manifestly arbitrary, discriminatory and violative of fundamental rights under Articles 14 and 21 of the Constitution of India--Section 45(1) imposes two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of Schedule to the Act is involved, but conditions of section 45(1) are manifestly arbitrary, discriminatory and violative of fundamental rights under Articles 14 and 21 of the Constitution of India, as there are no reference to the offences under sections 3 and 4 of money laundering under the PMLA, but only reference is made only to offences under Part A of Schedule and three years and more of the predicate schedule offence, which is offence outside the PMLA, therefore, section 45(1) was declared to be unconstitutional.--Present writ petitions and appeals raised question of constitutional validity of section 45 of Prevention of Money Laundering Act (PMLA), as section 45(1) imposes two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of Schedule to the Act is involved. The conditions are that (i) Public Prosecutor must be given an opportunity to oppose any application for release on bail and(ii) where the Public Prosecutor opposes the application, that there are reasonable grounds for believing that accused is not guilty of such and the Court is satisfied offence, and that he is not likely to commit any offence while on bail. It was submitted by petitioners that these conditions of section 45(1) are manifestly arbitrary, discriminatory and violative of fundamental rights under Articles 14 and 21 of the Constitution of India, as there are no reference to the offences under section 3 and 4 of money laundering under the PMLA, but only reference is made only to offences under Part A of Schedule and three years and more of the predicate offence, which are offences outside the PMLA. Held: Section 45 is a drastic provision, which turns on its head the presumption of innocence, which is fundamental to a person, accused of any offence. Before application of a section, which makes drastic inroads into the fundamental right of personal liberty guaranteed by Article 21. Further that such provision is compelling State interest for tackling serious crime. Therefore in absence of any such compelling State interest, the indiscriminate application of the provisions of section 45 would certainly violate Article 21. Thus, section 45(1) was declared to be unconstitutional, as it violated Articles 14 and 21. Hence, all the matters in which bail had been denied, because of the presence of the twin conditions contained in section 45, would now go back to the respective Courts, which denied bail. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers 2017 TaxPub(CL) 0891 (SC)

Nikesh Tarachand Shah v. UOI & Anr.

PREVENTION OF MONEY LAUNDERING ACT, 2002

--Offences to be cognizable and non bailable --Challenged constitutional validityImposed two conditions for grant of bail --Conditions manifestly arbitrary, discriminatory and violative of fundamental rights under Articles 14 and 21 of the Constitution of India--Section 45(1) imposes two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of Schedule to the Act is involved, but conditions of section 45(1) are manifestly arbitrary, discriminatory and violative of fundamental rights under Articles 14 and 21 of the Constitution of India, as there are no reference to the offences under sections 3 and 4 of money laundering under the PMLA, but only reference is made only to offences under Part A of Schedule and three years and more of the predicate schedule offence, which is offence outside the PMLA, therefore, section 45(1) was declared to be unconstitutional.--Present writ petitions and appeals raised question of constitutional validity of section 45 of Prevention of Money Laundering Act (PMLA), as section 45(1) imposes two conditions for grant of bail where an offence punishable for a term of imprisonment of more than 3 years under Part A of Schedule to the Act is involved. The conditions are that (i) Public Prosecutor must be given an opportunity to oppose any application for release on bail and(ii) where the Public Prosecutor opposes the application, that there are reasonable grounds for believing that accused is not guilty of such and the Court is satisfied offence, and that he is not likely to commit any offence while on bail. It was submitted by petitioners that these conditions of section 45(1) are manifestly arbitrary, discriminatory and violative of fundamental rights under Articles 14 and 21 of the Constitution of India, as there are no reference to the offences under section 3 and 4 of money laundering under the PMLA, but only reference is made only to offences under Part A of Schedule and three years and more of the predicate offence, which are offences outside the PMLA. Held: Section 45 is a drastic provision, which turns on its head the presumption of innocence, which is fundamental to a person, accused of any offence. Before application of a section, which makes drastic inroads into the fundamental right of personal liberty guaranteed by Article 21. Further that such provision is compelling State interest for tackling serious crime. Therefore in absence of any such compelling State interest, the indiscriminate application of the provisions of section 45 would certainly violate Article 21. Thus, section 45(1) was declared to be unconstitutional, as it violated Articles 14 and 21. Hence, all the matters in which bail had been denied, because of the presence of the twin conditions contained in section 45, would now go back to the respective Courts, which denied bail.