The stringent twin tests for the grant of bail under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) cannot be invoked as a tool to indefinitely detain accused persons when there is a delay in completing trial, observed the Delhi High Court recently [Pankaj Kumar Tiwari v. Enforcement Directorate].

Justice Manoj Kumar Ohri made the observation while granting bail to two former Bhushan Steel Limited (BSL) officials, Pankaj Kumar Tewari and Pankaj Kumar, who had been booked in connection with a ₹46,000 crore money laundering case.

The Court noted that the case involved numerous defendants, extensive evidence spanning lakhs of pages and many witnesses, due to which the trial was unlikely to conclude anytime soon for no fault of the accused.

"The delay being not attributable to accused, keeping the accused in custody by using Section 45 PMLA as a tool for incarceration is not permissible. Flow of liberty cannot be dammed by Section 45 without taking all other germane considerations into account. It is the duty of Constitutional Courts to champion the constitutional cause of Liberty and uphold the majesty of Article 21 ... where it is evident that the trial is not likely to conclude in a reasonable time, Section 45 cannot be allowed to become a shackle which leads to unreasonably long detention of the accused persons," the Court concluded in its October 24 order while granting to two men bail after over nine months in jail.

The Court added that the stringent provisions for the grant of bail under the PMLA have to be interpreted with due regard to Article 21 (right to life and personal liberty) of the Constitution.

In some cases, the strict provisions of the PMLA will have to give way to the rights of an accused under Article 21, the Court opined.

"Constitutional Courts can always exercise their powers to grant bail on the grounds of violation of Part III of the Constitution of India and stringent provisions for the grant of bail such as those provided in Section 45 of the PMLA do not take away the power of Constitutional Courts to do so. The right of liberty and speedy trial guaranteed under Article 21 is a sacrosanct right which needs to be protected and duly enforced even in cases where stringent provisions have been made applicable by way of special legislation. The stringent provisions would have to be interpreted with due regard to Article 21 and in case of a conflict, the stringent provisions, such as Section 45 of the PMLA in the instant case, would have to give way," the Court said.

The two bail applicants were the Vice Presidents of the finance and accounts departments of BSL. They had been accused of aiding the the ex-promoters of BSL (main accused) in the money laundering case.

While granting them bail, the Court also reiterated that "bail is the rule and jail is the exception" in view of Article 21.

"Liberty is the usual course of action, and deprivation of it a detour, which is why there are safeguards imposed to ensure that the deprivation of liberty is only by procedure established by law," the Court added.

The Court further noted that the main accused and similarly placed co-accused have already been given bail. It, therefore, granted bail to the two accused before it on various conditions.

"Considering the totality of the facts and circumstances, the fact that the main accused are out on bail, the period of custody undergone and that the trial is yet to commence, keeping in mind the import of the Catena of decisions of Supreme Court discussed hereinabove, it is directed that both the applicants be released on regular bail," the Court said.

Senior Advocate Sanjay Jain, briefed by team from Legal Scriptures including advocates Abhijit Mittal, Anukalp Jain, Shaivya Singh, Nishank Tripathi and Pulkit Khanduja, and advocates Palak Jain, and Harshita Sukhija appeared for Pankaj Kumar Tiwari.

Senior Advocate Rebecca John, and advocates Tapan Sangal, Dharmendra Singh and Pravir Singh appeared for Pankaj Kumar.

Special counsel Manish Jain with advocates Sougata Ganguly, Snehal Sharda and Gulnaz Khan represented the Directorate of Enforcement (ED).

[Read Judgment]