PMLA Accused Need Not Fulfill S.45 Conditions When Furnishing Bond After Appearing Before Trial Court As Per Summons : Supreme Court

In a notable judgment, the Supreme Court held that when an accused in a case under the Prevention of Money Laundering Act, 2002 (PMLA), who appears before the Special Court pursuant to a summons issued to him, it cannot be considered that he is in custody. Therefore, such an accused is not required to apply for bail under Section 45 of the PMLA.

The Special Court can however ask such an accused to furnish bonds to secure presence in terms of Section 88 of the Code of Criminal Procedure. To accept such a bond, it is not necessary that the stringent twin conditions for bail under Section 45 of the PMLA must be satisfied, clarified the Supreme Court.

“If the accused appears before the Special Court pursuant to a summons,it cannot be treated that he is in custody. Therefore, it is not necessary for the accused to apply for bail. However, the special court can direct the accused to furnish bonds in terms of Section 88 of the Code of Criminal Procedure. A bond furnished in terms of Section 88 CrPC is only an undertaking. Therefore, the order accepting bond under Section 88 does not amount to grant of bail and hence the twin conditions of Section 45 of the PMLA are not applicable to it.”, the bench comprising Justices Abhay S. Oka and Ujjal Bhuyan said.

Once a complaint under Section 44(1)(b) of the PMLA is filed, it will be governed by Sections 200 to 205 of the Code of Criminal Procedure. None of those provisions are inconsistent with the PMLA, the Court staetd.

The Court clarified that once the cognizance of the complaint was taken by the Special Court and the accused wasn't arrested, then as a normal rule, the summons must be issued to the accused and not the warrant.

“If the accused was not arrested by the ED till the filing of the complaint, the Special Court, while taking cognizance of the complaint, as a normal rule, must issue a summons to the accused and not a warrant. Even if the accused is on bail, a summons must be issued.”, the Judgment authored by Justice Abhay S. Oka said.

The crux of the issue before the Supreme Court is whether the execution of the bond by an accused for showing his presence before the court under Section 88 of Cr.P.C. would amount to applying for bail to make twin conditions of bail under Section 45 of the Prevention of Money Laundering Act, 2002 applicable.

In the course of the hearing, the Court framed two questions to be decided i.e.,

(I) If pursuant to the summons issued by the Special Court, the accused appears before the Special Court, whether he is required to apply for bail in terms of Section 437 CrPC?

(II) If the answer to the said issue is in affirmative, whether such a bail plea will be governed by the twin conditions imposed by Section 45 of the PMLA Act?

According to Section 45 of the PMLA, bail can be granted to an accused in a money laundering case only if twin conditions are satisfied - there should be prima facie satisfaction that the accused has not committed the offence and that he is not likely to commit any offence while on bail.

During arguments, it was argued by the petitioner/accused that once he appeared before the court in compliance with the summons and submitted a bond under Section 88 of Cr.P.C. for securing its presence in the court, then the bond executed under Section 88 wouldn't be treated as a bail to attract the twin conditions under Section 45 PMLA.

Whereas the Directorate of Enforcement (ED) argued that whenever the powers under Section 88 of Cr.P.C. is exercised by the court regarding securing the bond for the presence of the accused then it would amount to securing bail and the provisions under Section 45 of PMLA would apply i.e., the bail would be granted only if the twin conditions are followed.

Also from the judgment - ED Cannot Arrest Accused After Special Court Has Taken Cognizance Of PMLA Complaint : Supreme Court

Case Title: Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office, Special Leave to Appeal (Crl.) No(s). 121/2024 (and connected matters)

Citation : 2024 LiveLaw (SC) 383

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