Section 45 PMLA Conditions Applicable To Anticipatory Bail Applications For Money Laundering Offence : Supreme Court

The Supreme Court has reiterated that the conditions under Section 45 of the Prevention of Money Laundering Act for grant of bail are applicable to anticipatory bail applications under Section 438 of the Code of Criminal Procedure as well.

A bench comprising Justices MR Shah and CT Ravikumar made this observation while setting aside an order of the Telangana High Court which observed that rigours of Section 45 PMLA are not applicable to anticipatory bail applications.

The bench noted that the High Court misunderstood the Supreme Court's judgment in Nikesh Tarachand Shah Vs. Union of India and Anr.; (2018) 11 SCC 1 to hold that rigours of Section 45 PMLA do not apply to Section 438 CrPC.

The bench also noted that in Assistant Director Enforcement Directorate vs Dr VC Mohan it was clarified that Section 45 PMLA will apply to Section 438 CrPC.

"the observations made by the High Court that the provisions of Section 45 of the Act, 2002 shall not be applicable in connection with an application under Section 438 Cr.PC is just contrary to the decision in the case of Dr. V.C. Mohan (supra) and the same is on misunderstanding of the observations made in the case of Nikesh Tarachand Shah (supra). Once the rigour under Section 45 of the Act, 2002 shall be applicable the impugned judgment and order passed by the High Court granting anticipatory bail to respondent No. 1 is unsustainable". 

The conditions under Section 45 PMLA state that when an accused in a money laundering case applies for bail, the court has to first give an opportunity to the public prosecutor to be heard and if the public prosecutor opposes, the Court can grant bail only when it is satisfied that the accused is not guilty and unlikely to commit a similar offence when he is on bail.

The Supreme Court had upheld these conditions in Vijay Madanlal Choudhary vs Union of India.

Case Title : The Directorate of Enforcement vs M. Gopal Reddy and another

Citation : 2023 LiveLaw (SC) 138

For Appellant(s) Mr. Sharath Nambiar, Adv. Mr. Rajan Chourasia, Adv. Mr. Nakul Chengappa K.K., Adv. Mr. Anuj Srinivas Udupa, Adv. Mr. Mukesh Kumar Maroria, AOR

For Respondent(s) M/s. VKC Law Offices, AOR

Prevention of Money Laundering Act 2002- Section 45- Rigours under Section 45 are applicable to anticipatory bail applications - Para 5

Code of Criminal Procedure - Section 438- Anticipatory bail application for money laundering offence should satisfy rigours of Section 45 PMLA- Oservations made by the High Court that the provisions of Section 45 of the Act, 2002 shall not be applicable in connection with an application under Section 438 Cr.PC is just contrary to the decision in the case of Assistant Director Enforcement Directorate vs Dr VC Mohan and the same is on misunderstanding of the observations made in the case of Nikesh Tarachand Shah Vs. Union of India and Anr.; (2018) 11 SCC 1 - Para 5

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