In a ruling in favour of citizens' liberty, the Supreme Court has set aside a clause in the Prevention of Money Laundering Act, which made it virtually impossible for a person convicted to more than three years in jail to get bail if the public prosecutor opposed it. 

The ruling is significant in the light of recent government rules brought in under the Act, treating all money in bank accounts that are not linked to Aadhaar as "proceeds of crime" or "laundered" money. 

"We must not forget that Section 45 ( of Prevention of Money Laundering Act, 2002) is a drastic provision which turns on its head the presumption of innocence which is fundamental to a person accused of any offence," a two-member bench, comprising justices RF Nariman and Sanjay Kishan Kaul, said on Thursday. 

It observed that the provision violates Articles 14 and 21 of the Indian Constitution. 

Section 45 of the PMLA Act, 2002, provides that no person can be granted bail for any offence under the Act unless the public prosecutor, appointed by the government, gets a chance to oppose his bail. And should the public prosecutor choose to oppose bail, the court has to be convinced that the accused was not guilty of the crime and additionally that he/she was not likely to commit any offence while out on bail — a tall order by any count. 

"Before application of a section which makes drastic inroads into the fundamental right of personal liberty guaranteed by Article 21 of the Constitution of India, we must be doubly sure that such provision furthers a compelling state interest for tackling serious crime," said the SC bench. 

In absence of any compelling state interest, indiscriminate application of the provisions of Section 45 will certainly violate Article 21 of the Constitution, which guarantees right to life and liberty to all citizens, it observed. 

In striking down the provision, the bench shrugged off arguments by the Attorney General for India KK Venugopal that the stringent provisions were required to deal with the cancer of money laundering. The AGI argued that the legislation on money laundering was an attempt by Parliament to get back money which has been siphoned off from the economy, and the twin conditions in Section 45 are only in furtherance of this object of unearthing black money. 

"We should, therefore, be very slow to set at liberty persons who are alleged offenders of the cancer of money laundering," he had argued. Section 45 is crucial to ensure that the Act works, and laundered money comes back into the economy and persons responsible for the same are brought to book, Venugopal said. 

The bench, however, ruled that the provision — which was akin what existed under the dreaded TADA and MCOCA — would result in manifestly "arbitrary, discriminatory and unjust results" and would violate Articles 14 and 21 in as much as the procedure for bail would become harsh, burdensome, wrongful and discriminatory.  #casansaar (Source - PTI, Economic Times)