Supreme Court Contemplates Bail Conditions in Money Laundering Cases Amidst Criticism and Review Pleas

The Supreme Court deliberates on stringent bail conditions in money laundering cases. Justices Abhay S Oka and Ujjal Bhuyan preside over Tarsem Lal v. Directorate of Enforcement, questioning whether accused individuals must meet bail criteria even after special court cognisance.

The Supreme Court is considering a crucial matter regarding bail in money laundering cases. The case in question, titled Tarsem Lal v. Directorate of Enforcement, raises the issue of whether an accused individual in a money laundering case should have to fulfil strict bail conditions even after a special court acknowledges the offense.

Justices Abhay S Oka and Ujjal Bhuyan, who presided over the hearing, remarked that criminal courts possess comprehensive authority in such matters. They stated, "If you appear after summons, there is no question of arrest. But if you don't then court can issue warrants...Our rider is if further investigation or remand is needed, it can only be through special court. Once cognisance is taken, all power rests with the criminal court, all pervasive powers including remand."

The court is examining whether an accused, who wasn't arrested during the investigation period under the Prevention of Money Laundering Act (PMLA), still needs to meet stringent bail conditions once summoned by the special court. The issue also involves whether the Enforcement Directorate (ED) can arrest the accused under Section 19 of the PMLA after the special court acknowledges the complaint.

During the proceedings, the ED's counsel argued that the agency retains the right to arrest individuals even after the complaint is filed, as more evidence might surface.

Justice Oka had previously stated that once a complaint is filed, the ED loses the authority to make arrests. He emphasized, "Once complaint is filed, ED does not have power to arrest, only court can. ED cannot arrest in our view, so there can be no power or apprehension, that is all. Without order of the court, once complaint is filed, no one can arrest."

Section 45 of the PMLA imposes conditions for bail, making it challenging for accused individuals to obtain bail. These conditions include giving the Public Prosecutor an opportunity to oppose bail and satisfying the court that there are reasonable grounds to believe the accused is not guilty and won't commit further offenses while on bail.

This legal issue stems from a Punjab and Haryana High Court decision denying pre-arrest bail to several accused involved in a money laundering case linked to an alleged land scam. The Supreme Court had previously granted interim protection to the accused in January.

Representing the accused are Senior Advocate Sidharth Luthra and a team of advocates. The ED is represented by Additional Solicitor General SV Raju and other advocates.

In November 2017, the Supreme Court had struck down a portion of Section 45(1) of the PMLA that imposed additional bail conditions. However, this provision was later reinstated by the government after making amendments to the PMLA.

Criticism followed the Supreme Court's 2022 decision in the case of Vijay Madanlal Choudhary v. Union of India, which overruled the 2017 ruling. Retired Justice Rohinton Fali Nariman and former Chief Justice of India UU Lalit expressed disappointment over this decision, emphasizing the principle of 'innocent until proven guilty' in Indian criminal jurisprudence.

Congress leader Karti Chidambaram filed a review plea challenging the Vijay Madanlal ruling, leading the Supreme Court to issue notice to the Central government in August 2022.