PMLA Twin Bail Conditions Valid, ECIR Not an FIR: Supreme Court Upholds Money-Laundering Law

The batch of writ petitions, special leave petitions, appeals and transferred cases challenged the validity and interpretation of provisions of the PMLA and the procedure followed by the Enforcement Directorate (para 1). After Nikesh Tarachand Shah, Parliament amended Section 45 by Act 13 of 2018 to revive the twin conditions for bail; the amendment was challenged in several High Courts and before this Court, along with other provisions of the Act (para 1(a)). Challenges to other statutes and individual bail, quashing or discharge petitions were also in the batch; the Court confined itself to the questions of law on the PMLA (para 1(b)-(d)).

Section 3 captures every process or activity connected with proceeds of crime, and ‘and’ in it is read as ‘or’; but the offence depends on illegal gain from a scheduled offence, so the authorities cannot prosecute "on notional basis", and discharge, acquittal or quashing in the scheduled offence ends the money-laundering case (paras 53-55, 187). Sections 5, 17, 18 and 19 carry stringent safeguards and are valid (paras 90, 187). Under Section 24 the prosecution must first establish the foundational facts before the burden shifts (para 99). Disagreeing with Nikesh Tarachand Shah's reasons for distinguishing Kartar Singh, the Court upheld the amended Section 45, whose rigours apply to anticipatory bail and before constitutional courts (paras 129, 135, 141). Section 436A is nevertheless a statutory bail provision available to PMLA accused, as it is "the bounden duty of the State" to conclude such trials within a reasonable time (paras 148-149). Distinguishing Tofan Singh, the Court held that the PMLA authorities are not police officers, so statements recorded by them are not hit by Article 20(3) (paras 168, 172).