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Section 436A CrPC Setting Cap For Pre-Trial Custody Applicable To PMLA Offences, Says Supreme Court At Hearing
Mehal Jain
9 March 2022 9:38 PM IST
The Supreme Court on Wednesday orally observed that Cr. P. C. section 436A is an independent scheme under the Cr. P. C. dealing with specific situations, which has not been modified by the Prevention of Money Laundering Act, and therefore section 436A will also apply under the PMLA regime by virtue of section 65 of the PMLA.The Court told Solicitor General of India Tushar Mehta that though...
The Supreme Court on Wednesday orally observed that Cr. P. C. section 436A is an independent scheme under the Cr. P. C. dealing with specific situations, which has not been modified by the Prevention of Money Laundering Act, and therefore section 436A will also apply under the PMLA regime by virtue of section 65 of the PMLA.
The Court told Solicitor General of India Tushar Mehta that though the aspect of applicability of section 436A (maximum period for which an undertrial prisoner can be detained) under the PMLA has not been urged on the part of the petitioners, the Court considers it essential with a view to balance the interests of the accused and the prosecution and the public interest in general.
A bench comprising Justice AM Khanwilkar, Justice Dinesh Maheshwari and Justice CT Ravikumar was hearing a batch of petitions challenging the various provisions of the PMLA.
Section 436A provides that where a person has spent in custody as an undertrial half the period of maximum sentence for the offence, he should be ordinarily released on bail, subject to the objections by the Prosecutor.
The provision reads as :
Where a person has, during the period of investigation, inquiry or trial under this Code of an offence under any law (not being an offence for which the punishment of death has been specified as one of the punishments under that law) undergone detention for a period extending up to one-half of the maximum period of imprisonment specified for that offence under that law, he shall be released by the Court on his personal bond with or without sureties. Section 65 of the PMLA provides that the provisions of the Cr. P. C. shall apply, in so far as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act.
Provided that the Court may, after hearing the Public Prosecutor and for reasons to be recorded by it in writing, order the continued detention of such person for a period longer than one-half of the said period or release him on bail instead of the personal bond with or without sureties;
Provided further that no such person shall in any case be detained during the period of investigation inquiry or trial for more than the maximum period of imprisonment provided for the said offence under that law
On the question of applicability of the default bail or statutory bail provision of the Cr. P. C. to the PMLA which was posed by the bench to the SG on Tuesday, the SG on Wednesday replied, "Money laundering usually takes place cross-border, not just within the bounds of the country. This is the first distinction between money-laundering and TADA, MCOCA etc. The second is that there are certain tax haven countries where it is easy to park your illicit money and there are certain countries which give you a kind of a shelter by giving you citizenship with which India does not have any reciprocal treaty for extradition. Third, because of this very international nature of this offence, the accused, especially the main accused, has his own infrastructure, wherewithal in that respective country where he parks his money or where he is ensured stay . Fourth, this is a premeditated offence. It never takes place in the heat of the moment. So while committing an offence, I would ensure where my money will go, how it will be hidden, in which country, who will be helping me, what is my infrastructure when I want to escape and become a fugitive, and I will have everything ready for me. These factors have to be borne in mind, which are these offence-specific factors, Unlike MCOCA, which is an organised crime act, with gangs functioning in Maharashtra, this will have trans-border implications. Keeping that distinction in mind, kindly come to PMLA section 45 (which imposes twin conditions on the grant of bail in offences under the Act, notwithstanding the Cr. P. C.)".
Justice A. M. Khanwilkar observed, "Those considerations would be important for bail. But this is statutory bail or default bail, as they say."
The SG replied, "Section 45 starts with notwithstanding anything contained in the code of criminal procedure. So my first legal submission is that this ousts section 436A. Now come to subsection (2) of 45 [The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Cr. P. C. or any other law for the time being in force on granting of bail]. Wherever the legislature wanted to incorporate the provisions of Cr. P. C., it has specifically done so in 45."
Justice Khanwilkar noted, "subsection two applies to limitations in 437 and 439 (of Cr. P. C.). It is not debarring the possibility of taking recourse to remedy under 436A, which has come by way of amendment. And there is good reason for which the provision has been introduced. The experience is that trials are not proceeding, trials remain pending, Investigation reports are not filed in time, all those are different logistical matters which have been experienced. Very recently, it was in public domain, of seven years of total punishment, the accused already undergone six years under trial. If this is the state of affairs, there has to be some balancing...If there is presumption about validity of a provision, there must also be presumption about upholding the rights of the accused also."
The SG responded, "It is the concern of the State also. It should be a concern of the prosecution also. If the legislature wanted 436A to apply, where it says limitation under 437 applies, there was nothing to prevent the legislature to say 436A also. It starts with a non obstante clause and applies only limitations under 437. It means the legislature wants to exclude 436A."
Justice Dinesh Maheshwari noted, "436A was with effect from June, 2006. So this was after enforcement of PMLA."
The SG said, "PMLA could have been amended if the legislature wanted"
Justice Maheshwari continued, "If it has not been amended, What is the implication of it?"
Justice Khanwilkar added, "we want to be realistic and bring a balance between the prosecution and the accused"
The SG urged, "For that, your lordships may read in Article 21 but not 436A. There can be several provisions in Cr. P. C. which might come by way of amendment. The legislature is free to suitably amend the PMLA act also to apply those principles, all or any of them. The legislature has not chosen to apply 436A as a statutory right under the Cr. P. C.. It merely says that the limitation under 437 would apply"
Justice Khanwilkar: "Is it possible to say that 436A is a special mechanism provided and therefore that special mechanism which has come subsequent to the 2002 PMLA act must prevail over the general law under the 2002 act?"
Justice Maheshwari: "45 starts with non-obstante clause, and so far as bail aspects are concerned, 437, 438, 439 may be excluded. But 436A is covering an entirely different field. Does 45 exclude 436A also? Because it says maximum period for which an undertrial prisoner can be detained"
SG: "if your lordships were to read any provision regarding bail, whether 436A or any other provision, your lordships would necessarily be ignoring the non-obstante clause."
Justice Khanwilkar: "we need to ignore it because 436A has come subsequently and to address a problem."
SG: "Any provision of Cr. P. C., in ignorance of non obstante clause, will create several problems in several cases. Instead, what is troubling your lordships can be taken care of by giving that right under Article 21, not a statutory right under 436A. I am also concerned about the fact that the person has been in jail for three years or four years and there are 200 witnesses to be examined and no real possibility of trial being completed. But any tinkering with this non-obstante clause and reading in statutory provision will affect other provisions also which are starting with non-obstante clauses"
"436 A as a statutory right is excluded in 45. Taking care of concerns which I also share, as an alternative submission, please see the SC Legal Aid Committee case (1994), where the court read that right against prolonged incarceration into article 21. The court for the first time under article 32 said that prolonged incarceration without trial of offence is against article 21", he continued.
"Please bear one fact in mind. In any typical PMLA offence, there are several accused whom we bring by way of extradition from other countries. There are foreingn nationals also. Christian Michel, for example, it's a classic example- he was a foreign national brought here and he is in jail. Nowadays, the borders are porous, it is not safe enough that merely somebody deposits passport and he will not be able to travel and flee the country and become a fugitive. So your lordships may have to in the larger interest bifurcate between the main offender and those who are on the fence, somebody who may have created some forged document, some bank employees who may have helped, he may be guilty under Section 3 but the gravity and intensity of the respective role would be different", urged the SG.
"My submission is that please do not read a statutory right under 436A in 45. Because that tinkers with the non-obstante clause which will have impact on other provisions. But please read that right under article 21. Please don't read 436A as a statutory right because it will have impact on several other provisions", he pressed.
Justice Khanwilkar: "section 45 subsection (1) non-obstante clause which you refer to has been amended contemporaneously in 2005 and the amendment introducing 436A is also 2005. One is Act 20 and the other is Act 25. It has been done simultaneously. So when this amendment is carried out in section 45, the legislature was conscious that some amendment has been introduced in section 436A of the Cr. P.C."
SG: "that would be in my favour because despite that, it did not specifically introduce 436A in PMLA."
Justice Khanwilkar: "the limitation referred to in subsection (2) of section 45, that limitation will not apply to cases where 436A is attracted."
Justice Maheshwari to the SG: "This is one way of looking at it. I am giving you another thought for your response. You are responding assuming that we are reading 436A into 45 or somewhere tinkering with 45. Leave aside 45. Nevertheless, section 65 is there in PMLA. When all other provisions of Cr. P. C. would apply, why would 436A not be taken as a separate, different provision? You said it refers to Article 21. 436A has its foundation in article 21. As soon as we read Article 21 principles also, ipso facto 436A comes into operation. But if it is not specifically excluded, why should we not apply?"
Justice Khanwilkar: "If it is guaranteed under article 21, that is the guarantee enshrined in article 21, then what is the difficulty in giving that benefit under 436A?That it is the same benefit...the substance is same, the format may change."
SG: "I am sharing my worry. It might create problem for us in other non-obstante clause provisions."
Justice Khanwilkar: "Section 65 says the provisions of the code of criminal procedure shall apply in so far as they are not inconsistent with the provisions of this act. In this act, have you made any provision similar to 436A? If no, then we can take clue from there and we can still reason it out."
SG: "do your lordships say it (436A) is not inconsistent?"
Justice Khanwilkar: "unless you have made similar provision in this PMLA."
SG: "There is no such provision...In that case, please read 436A..."
Justice Khanwilkar: "we are conscious of 436A regime- that the prosecutor will still get opportunity there to point out that though 50% of the accused's term is over but he needs to undergo further detention because of the reason A, B, C"
SG: "and the proviso- 'Provided that the Court may, after hearing the Public Prosecutor and for reasons to be recorded by it in writing, order the continued detention of such person for a period longer than one-half of the said period or release him on bail instead of the personal bond with or without sureties;
Provided further that no such person shall in any case be detained during the period of investigation inquiry or trial for more than the maximum period of imprisonment provided for the said offence under that law"
"Please keep the larger public interest in mind. The court will have to consider the potential of the accused to flee, the nature of the offence which makes it possible and easy for the accused to tamper with witnesses", urged the SG.
Justice Khanwilkar: "That will depend on every case. You are referring to someone who is involved in a scandal or a scam of 1800 crores. You may have a different parameter for such a person. That you can convince the court. But one who is only named in PMLA because of being a facilitator and handled Rs.10 lakhs or 20 lakhs maybe one crore, for him there can be separate parameters. That would be on case to case basis."
Justice Maheshwari: "Say, for example, antecedents of a person. That can always be taken into consideration."
SG: "Please let me flag my concern (as regards delay in trial at the instance of the accused). Section 45 with all its rigours would apply at the time of initial bail. This benefit which your lordships are considering is only when he undergoes half of the term. Because even a fence sitter who has merely created a forged letter of credit..."
Justice Khanwilkar: "You may point out to the court that he is responsible for delay in trial. That will be ground for rejection (under 436A). He only has to apply, it is not a matter of right that he gets it"
SG: "436A may not apply but the principles underlying may apply."
Justice Khanwilkar: "But then we are going to article 21. 436A is an independent scheme under the Cr. P. C. dealing with specific situations, which has not been modified by the PMLA, and therefore, 436A will also apply, as 167 applies (as submitted by the SG previously), by virtue of section 65. We can reason it out that way."
SG: "Please ensure that this is not applied mechanically"
Justice Khanwilkar: "Not mechanically, but at the same time, we can only say that 45 restrictions will not come in the way for considering that bail, but other considerations can certainly weigh with the court for considering the default bail"
The bench pointed out that the Explanation appended to section 436A provides that In computing the period of detention under this section for granting bail the period of detention passed due to delay in proceeding caused by the accused shall be excluded.
Justice Khanwilkar remarked, "Nobody from the other side has also argued this. But this concerns balancing of rights as well as the public interest."
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