Supreme Court’s Stance on Bail in Money Laundering Cases

Source- This post on Supreme Court’s Stance on Bail in Money Laundering Cases has been created based on the article “Bail always the norm, even in money laundering cases: SC” published in “The Hindu” on 28th August 2024.

Why in News?

The Supreme Court of India recently reaffirmed the principle that “bail is the rule and jail is the exception,” even in cases related to money laundering.

Key Observations by the Supreme Court

1. Liberty Over Incarceration: The court emphasized that individual liberty is the norm, and any deprivation of liberty should only occur through a valid and reasonable legal procedure.

2. Interpretation of Section 45 of PMLA: The court clarified that Section 45 of the Prevention of Money Laundering Act (PMLA) should not be interpreted in a manner that makes granting bail impossible. The section does not override the general principle that bail should be the default.

3. Conditions for Bail: The court noted that bail must be granted if the two conditions of Section 45 are satisfied:

i) There are reasonable grounds to believe the accused is prima facie innocent.

ii) The accused is unlikely to commit any crime while out on bail.

4. Court referred to the Manish Sisodia bail judgment (August 9, 2024) reinforcing that bail cannot be denied based on the whims of investigating agencies like the ED.

Right Against Self-Incrimination

1. Protection of Fundamental Rights: The Supreme Court ruled that the ED cannot force an accused in judicial custody to make a self-incriminatory statement in another money laundering case. This would violate the fundamental right to silence and protection against self-incrimination under Article 20(3) of the Constitution.

2. Section 50 of PMLA: Section 50 allows the Enforcement Directorate (ED) to summon individuals and request documents or statements. However, the court ruled that these powers cannot violate an individual’s right against self-incrimination.

3. Inadmissibility of Self-Incriminatory Statements: A person in custody cannot provide a statement with a “free mind”. This makes any self-incriminatory statement under ED pressure inadmissible as evidence. This ensures fairness and justice by preventing such statements from being used against the accused.

UPSC Syllabus: Polity and nation