Custody Of Two Years and Four Months The New Norm For Bail In PMLA Cases?

Sections 479 BNSS and Section 436A CrPC

Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (“BNSS”) has brought in through its first proviso to sub-section (1) an important addition to its corresponding provision under Section 436A of the Criminal Procedure Code, 1973 (“CrPC”) – that now an accused who is a first time offender, i.e. someone who has not been convicted earlier, shall be released on bail if they have served one-third of the maximum sentence of the offence for which they are prosecuted. However, as per sub-section (2), notwithstanding anything in sub-section (1), an accused shall not be released on bail “where an investigation, inquiry or trial in more than one offence or in multiple cases are pending against” such accused. Let's refer to this requirement as the 'More Than One Offence' condition. Earlier, under Section 436A CrPC, the protection was restricted to undertrials who had undergone one-half of the maximum period of imprisonment for the offence being prosecuted. The power of the court to order continued detention (for reasons to be recorded in writing) for a period longer than one-half of the maximum imprisonment term has been retained through the second proviso to sub-section (1) of Section 479 BNSS. Let's refer to this requirement as 'Longer Detention' condition. While the Longer Detention condition has been retained in the statute book, the More Than One Offence condition is an addition to the provision.

Section 436A CrPC applicable to cases under PMLA

The benefit of prolonged undertrial custody as provided vide Section 436A CrPC has been held to be applicable to PMLA cases in the landmark ruling of Vijay Madanlal Choudhary & Ors. v. Union of India 2022 LiveLaw (SC) 633 (inter alia, in paragraphs 142, 147, 149 and 187(xiv)). The Court was of the opinion that since Section 436A was enacted post the PMLA, and because there was no inconsistency in Section 436A CrPC with the provisions of PMLA, it would be applicable to PMLA cases. Relying on the judgment in Vijay Madanlal, the Apex Court in Ajay Ajit Peter Kerkar v. Directorate of Enforcement & Anr. 2024 LiveLaw (SC) 400 extended the benefit of Section 436A to the accused who was about to complete three and a half years in custody (half of the maximum of seven years punishment prescribed under Section 4 PMLA).

Section 479 BNSS and PMLA

Existence of a scheduled/predicate offence is a pre-requisite for the offence of money laundering, as has been clarified by the Supreme Court in multiple cases, including in the ruling in Vijay Madanlal Choudhary (inter alia, in paragraph 187(v)(d)). Though not necessary, the same person is often prosecuted both for the scheduled offence as well as for the separate offence of money laundering. Given the same, a question naturally follows:

Whether such a person (assuming they don't have any prior conviction) can be given the benefit of release on serving one-third of seven years (i.e. two years and four months) in light of investigation/inquiry/trial being pending against such person in more than one offence i.e. the scheduled offence as well as the money laundering offence.

The introduction of the More Than One Offence condition throws open an interesting scenario: that the benefit of 436A CrPC now might be denied in PMLA cases in light of the More Than One Offence condition, in effect, making 436A CrPC (now 479 BNSS) inappliable to PMLA cases.

Supreme Court so far on interplay between 479 BNSS & PMLA

The cases decided by the Supreme Court so far, however, seem to preclude such a scenario. In a vein similar to Ajay Ajit Peter Kerkar, while placing reliance on Vijay Madanlal, wherein 436A was held applicable to cases under PMLA, the Supreme Court in Badshah Majid Malik v. Directorate of Enforcement & Ors. (Special Leave Petition (Criminal) No. 10846 of 2024) goes on to hold that the revised version of Section 436A CrPC as enshrined in 479 BNSS would be applicable in PMLA cases.

The Supreme Court in Badshah Majid Malik in effect holds that prosecution in predicate offence will not come in the way of benefit of one-third custody undergone in the offence under PMLA as an undertrial being given to the accused. The Apex Court, however, does not seem to answer the effect of sub-section (2) of section 479 BNSS on the first proviso to sub-section (1) restricting its discussion to the first and second provisos of sub-section (1). However, the Court does note that the accused is being prosecuted for a predicate offence under Sections 132, 135(1)(a)(ii) and 135(1)(b)(ii) read with Section 140 of the Customs Act,1862. Hence, an argument can be made basis the Supreme Court order in Badshah Majid Malik that prosecution solely for the scheduled offence in addition to the offence under the PMLA will not amount to “investigation, inquiry or trial in more than one offence or in multiple cases” since the Court goes on to grant bail to the accused under first proviso of sub-section (1) of Section 479 BNSS.

Notably, this argument did not find favour with the Karnataka High Court in the case of K. Ramakrishna v. The Assistant Director, Directorate of Enforcement (Criminal Petition No. 9930 of 2024). The Karnataka High Court in K. Ramakrishna notes Badshah Majid Malik as one of the cases relied upon by the accused while at the same time it does not make a reference to the Supreme Court's ommission to refer to sub-section (2) while granting bail Badshah Majid Malik. The Karnataka High Court goes on to hold that the benefit of first proviso to sub-section (1) is subject to sub-section (2), and goes on to reject the plea made under Section 479 on, inter alia, the ground that the accused was facing prosecution for scheduled offence under the Indian Penal Code, 1860 (“IPC”) as well as under the PMLA.

Interestingly, eligibility for bail under the first proviso to sub-section (1) 479 BNSS was also agitated as one of the grounds in the Supreme Court in the case of Partha Chatterjee v. Directorate of Enforcement (Criminal Appeal No. 5266 of 2024) wherein the accused was being prosecuted in seven other matters in addition to the ED matter in which the plea under 479 BNSS was taken. The Apex Court noted the ED's argument that the Appellant would not be entitled to bail in view of Section 479(2) of the BNSS as multiple cases were registered against him. The Apex Court, however, does not deal with that contention while granting bail to the accused. The Court observes that it cannot be oblivious to the settled principles that a suspect cannot be held in custody indefinitely and that undertrial incarceration should not amount to punitive detention. In effect, while not dealing with the argument made under Section 479(2), the Court basis its decision on the very principle governing erstwhile Section 436A CrPC and Section 479 BNSS.

Given the Supreme Court bail orders in Badshah Majid Malik and Partha Chatterjee, an argument may be made that:

Prosecution solely for the predicate offence in addition to the money laundering offence does not amount to “investigation, inquiry or trial in more than one offence or in multiple cases” for the purposes of sub-section (2) of section 479 BNSS in a bail application moved in relation to the case under PMLA.

This argument may be further buttressed by the fact that the Supreme Court has gone on to grant bail to uphold the right to speedy trial under Article 21 of the Constitution in cases under PMLA where period of undertrial incarceration was over 14 months and there was no possibility of the trial concluding within a reasonable time. Such cases include V. Senthil Balaji v. The Deputy Director Directorate of Enforcement (Criminal Appeal No. 4011 of 2024), Manish Sisodia v. Directorate of Enforcement (SLP Criminal No. 8781 of 2024) and Udhaw Singh v. Enforcement Directorate (Criminal Appeal No. 799 of 2025), among others.

While the Apex Court has not yet expressly addressed the applicability of Section 479 of the BNSS to PMLA cases in light of sub-section (2) of Section 479, a clear ruling on this issue would be of great significance for the right to personal liberty in such cases. Depending on the Supreme Court's decision(s), and given the generally prolonged nature of trials, a custody period of two years and four months may soon become the new norm in PMLA cases.

The author is an Advocate , views are personal.