The Role of Special Courts and Bail under PMLA

Table of Contents-

1.	Introduction
2.	Special Courts
3.	Offences triable, Power to take Cognizance and Jurisdiction of Special Courts
4.	Arrest without warrant and No bail without Order
5.	Public Prosecutor & its Eligibility
6.	Appellate Jurisdiction
7.	Authors Comments

1. Introduction:

Bail is the rule and jail the exception. This principle has been the main guiding factor for deciding bail applications across the country (India) for most offences but whether this principle stands true to the persons accused of offences under the Prevention of Money Laundering Act, 2002 (herinafter referred to as the Act). Let us examine.

2. Special Courts:

The term special court has been defined under clause (z) section 2 of the Act as a court of session which is designated as special court under sub-section (1) of section 43 of the Act. For the trial of offences punishable under section 4 of the Act the central government in consultation with the Chief Justice of the High Court of a particular state designates/ notifies one or more court of sessions as a special court or special courts within a particular state. The notification also specifies the area throughout which that special court has the power to exercise its jurisdiction and the class or group of cases that may be entertained by such special court or special courts.

3. Offences triable, Power to take cognizance & Jurisdiction of Special Courts:

Because section 44 of the act starts with a non-obstante clause the provisions mentioned in the Code of Criminal Procedure, 1973 (hereinafter referred to as the Code) do not have an overriding effect over it. Even otherwise when a provision in regard to something specific has already been mentioned in a special act then that provision overrides what has been otherwise provided in law. The Hon'ble Supreme Court has settled the aforesaid proposition of law on in case titled as Abhishek Banerjee and Another v/s Directorate of Enforcement decided on 09.09.2024.

Both, the offence that is punishable under Section 4 of the act and the scheduled offence connected to that offence is triable by the special court notified/ designated for the area in which the offence has been committed. However, it has been clarified by sub-sub section (i) of sub- section (1) of section 44 of the Act that the special court while dealing with an offence committed under the act is not dependent upon any orders that are passed during the trial of the scheduled offence that was committed and the trial of both sets of offences is not to be construed as a joint trial. Both the offences are tried separately.

The accused need not be specifically committed to trial by another court to the special court. The special court can itself take cognizance of an offence committed under Section 3 of the act if a complaint has been made to it by an authority authorized in this behalf under the act. However, if such authority after investigating concludes that no offence under section 3 of the act has been committed then such authority must submit a closure report before the special court.

If a situation arises where in cognizance for the scheduled offence has been taken by a court which is not the court which has taken cognizance of the complaint of the offence of money laundering then the court dealing with the scheduled offence is supposed to commit the case to the special court dealing with the offence of money laundering. An application in this regard has to be filed by the authority authorised to file a complaint under the Act. The special court on receipt of such case is supposed to proceed to deal with it from that stage at which it is committed.

Even though the act is a special act containing many provisions regarding searches, arrests, etc however the procedure for trial of both the scheduled offence and the offence of money laundering is to be followed in accordance with the provisions of the Code in the same way as it applies before a court of session.

The special powers of the High Court regarding bail under section 439 of the code and its powers to modify or set aside any conditions that may be imposed by the special court while exercising such power remain unaffected.

4. Arrest without warrant & No bail without Order:

All the offences under the act are cognizable and non bailable meaning thereby that any person authorised to arrest can arrest without any warrant subject to fulfilment of the conditions prescribed under section 19 of the act and no bail can be granted other than by an order passed by the special court or any other superior court. By virtue of section 45 of the Act bail can only be granted after the public prosecutor has been given an opportunity to oppose the bail application and after hearing both sides the court is convinced and satisfied that there are reasonable grounds for believing that the accused is innocent. The likelihood of the accused committing another crime while on bail is also to be borne in mind while deciding any such application. These restrictions provided for granting bail are in addition to the restrictions provided under the Code or under any other law that is in force while deciding a bail application for an offence of money laundering. However, a proviso has been carved out which eases the conditions provided under the Act while granting bail when the accused is either below the age of sixteen years or is a woman or is sick or infirm or is accused either on his own or along with the other co-accused of money laundering for a sum less than one crore rupees.

The liberty given to a court under sub-sub clause (b) of sub-section (1) of section 439 of the Code to not give notice to the public prosecutor if it feels that the same is not practical in cases triable by a court of session or where the accused has been charged with an offence punishable by life imprisonment, has been taken away under this Act and the same has been made mandatory by virtue of sub-sub section (i) of sub-section (1) of section 45 of the Act.

Police officers are barred by sub-section 1A of section 45 of the act to conduct an investigation into any offence of money laundering unless it is specifically authorized by the central government either by a general or special order. However, this section starts with a non obstante clause and is not subject to any other provision that has been provided under the Code of Criminal Procedure, 1973 or any other provision under the act.

5. Public Prosecutor & its Eligibility:

The special court constituted under section 43 of the act is deemed to be a court of session and the person prosecuting is deemed to be a public prosecutor within the meaning of clause (u) of section 2 of the Code. However, the Central Government may appoint in furtherance of a prosecutor, a special public prosecutor for a particular case, class of cases or group of cases for the purposes of prosecution. To be eligible for appointment as a public prosecutor or a special public prosecutor, a person must be in practise as an advocate for not less than seven years under the Union of India or one of its respective states.

6. Appellate Jurisdiction:

All appeals or revisions against an order of the special court lie before the High Court of the state within which the special court exercises jurisdiction and all the provisions that have been provided in respect of procedure including the procedure provided for bail or bonds in the Code are applicable to cases under the Act apart from those procedures that have been specifically provided under the Act.

7. Authors Comments:

Yes, the bail conditions for offences under the Act are stringent nonetheless the principle of bail being the rule and jail the exception does stand true even for persons accused under the Act. Even though according to section 45 of the act a triple test has been laid down to decide a bail application filed by an accused however the Hon’ble Supreme Court of India in case titled as Manish Sisodia v/s Directorate of Enforcement decided on 09.08.2024 has included long incarceration due to delay in trial also within the scope of section 439 crpc and section 45 of the Act and has thus enlarged the scope of bail in cases of money laundering. The relevant portion of the aforeasaid case is being reproduced herein for the ready reference of the readers:-

“In paragraph 28 of the said order, this Court observed that the right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 Cr.P.C., 1973 and Section 45 of the PMLA. The Court held that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted that he be ensured and given a speedy trial. It further observed that when the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, would be guided to exercise the power to grant bail. The Court specifically observed that this would be true where the trial would take years. It could thus clearly be seen that this Court, in the first round of litigation between the parties, has specifically observed that in case of delay coupled with incarceration for a long period and depending on the nature of the allegations, the right to bail will have to be read into Section 45 of PMLA.”

So the law on bail for offences of money laundering under the act on present day stands on an enlarged footing than what has been provided under the act. The Hon’ble Supreme Court while being conscious of the fact that Right to Life enshrined under Article 21 of the Constitution of India would also be applicable to undertrials accused of offences of money laundering, has brought the fourth facet within the requirements that need to be examined while granting bail under the Act, as being a right of every citizen of India which is protected by the Constitution. It is now a quadruple test which includes the following four checkboxes to be considered by a court while granting or rejecting a bail application under the act:

1)     Whether the public prosecutor has been given an opportunity to oppose the bail application.

2)     Whether the court is prima facie convinced that the accused is innocent.

3)     Whether there are any chances of the accused committing another crime while on bail.

4)     Whether there is long incarceration of the accused due to delay in trial which has not been caused due to any fault of his/her.

Food for thought: Whether enlarging the scope of a provision would amount to judicial

overreach or the rights enshrined and enforceable by the Constitution

of India would automatically be diluted within all the laws?

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