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2020 (6) TMI 90 - HC - Money LaunderingVires of Clause (ii) of sub-Section (1) of Section 45 of the Prevention of Money Laundering Act, 2002 - amendment in section 45 - applicability of decision in the case of NIKESH TARACHAND SHAH VERSUS UNION OF INDIA AND ANR. 2017 (11) TMI 1336 - SUPREME COURT where the Supreme Court has declared Clause (ii) of sub-Section (1) of Section 45 of the Prevention of Money Laundering Act, 2002, ultra vires Articles 14 and 21 of the Constitution of India - amendment in section 45, subsequent to the Supreme Court s decision, in case of Nikesh Tarachand Shah. Whether the amendment introduced in Section 45 of the Act, by Act No. 13 of 2018, shall amount to re-framing the entire Section 45 and thereby reviving and resurrecting the requirement of twin conditions under sub-Section (1) of Section 45 of the Act for grant of bail? HELD THAT - In view of clear language used in paragraph 46 of the Supreme Court s decision in case of Nikesh Tarachand Shah, there is no hesitation in reaching a definite conclusion that the amendment in sub-Section (1) of Section 45 of the Act introduced after Supreme Court s decision in case of Nikesh Tarachand Shah does not have the effect of reviving the twin conditions for grant of bail, which have been declared ultra vires Articles 14 and 21 of the Constitution of India. There are no force in submission made on behalf of Union of India that a different view has been taken in case of P. CHIDAMBARAM VERSUS DIRECTORATE OF ENFORCEMENT 2019 (9) TMI 286 - SUPREME COURT by the Supreme Court than the view taken in case of Nikesh Tarachand Shah on the question of constitutional validity of sub-Section (1) of Section 45 of the Act. There is no discussion in this regard in the said judgment in case of P. Chidambaram . The application for anticipatory bail in case of P. Chidambaram was rejected on merits of the allegation and other materials. Merits of the case - HELD THAT - The petitioner is the widow of deceased younger brother of the main accused Ashok Kumar Yadav against whom there are 26 criminal cases and in course of investigation carried out against him in respect of commission of offence under the Act, it emerged that he had purchased properties in the name of the petitioner and her deceased husband to the tune of ₹ 5,66,000/-. Further, a sum of ₹ 6,95,000/- has been allegedly deposited in the savings bank account of the petitioner by the said accused Ashok Kumar Yadav. In addition, a sum of ₹ 2,99,500/- is lying in the account of the deceased husband of the petitioner. Considering the nature of allegation, a case of grant of anticipatory bail is made out - Application allowed.
Issues Involved:
1. Constitutional validity of Section 45(1) of the Prevention of Money Laundering Act (PMLA) post-amendment. 2. Application for anticipatory bail under Section 438 of the Code of Criminal Procedure. Detailed Analysis: 1. Constitutional Validity of Section 45(1) of PMLA Post-Amendment: The primary issue was whether the Supreme Court’s decision in Nikesh Tarachand Shah vs. Union of India (2018) declaring Clause (ii) of sub-Section (1) of Section 45 of the PMLA ultra vires Articles 14 and 21 of the Constitution of India, lost its significance due to the amendment in Section 45(1) of the Act. - Pre-Amendment Section 45(1): Imposed twin conditions for bail, requiring the court to be satisfied that the accused is not guilty and not likely to commit an offense while on bail. - Post-Amendment Section 45(1): Substituted the phrase "punishable for a term of imprisonment of more than three years under Part A of the Schedule" with "under this Act," but retained the twin conditions for bail. The court analyzed whether this amendment revived the twin conditions for bail, which had been declared unconstitutional. The court concluded that the amendment did not revive these conditions, as the Supreme Court in Nikesh Tarachand Shah had declared them ultra vires due to their inherent nature and not merely their applicability to offenses under Part A of the Schedule. 2. Application for Anticipatory Bail: The petitioner sought anticipatory bail in connection with a complaint case under the PMLA, alleging involvement in money laundering activities related to properties and bank deposits made by Ashok Kumar Yadav. - Prosecution’s Allegations: The petitioner, widow of the deceased younger brother of Ashok Kumar Yadav, was accused of having properties and bank deposits linked to money laundering activities. - Petitioner’s Arguments: The petitioner’s counsel argued that the amendment did not revive the twin conditions for bail, citing decisions from the High Courts of Bombay, Delhi, and Madhya Pradesh, which supported this view. - Union of India’s Arguments: The Additional Solicitor General argued that the amendment rectified the defects pointed out in Nikesh Tarachand Shah, making the twin conditions applicable to offenses under the PMLA. He cited Supreme Court decisions emphasizing the gravity of economic offenses and the need for stringent bail conditions. The court, after considering the arguments, held that the amendment did not revive the twin conditions for bail, aligning with the views of other High Courts. On the merits of the case, the court noted the petitioner’s limited involvement and granted anticipatory bail, subject to conditions. Conclusion: The court concluded that the amendment to Section 45(1) of the PMLA did not revive the twin conditions for bail declared unconstitutional by the Supreme Court in Nikesh Tarachand Shah. Consequently, the petitioner was granted anticipatory bail, considering the nature of allegations and her limited involvement.
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