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TMI Blog2022 (2) TMI 949X X X X Extracts X X X X X X X X Extracts X X X X ..... ffence under the PML Act itself. The Amending Act has changed the entire complexion. Notably section 45 of the Act has not been repelled from the statute book. Therefore, in our view, the section as it stood after amendment has to be read as it stands. It is not found necessary that the entire section has to be resurrected afresh. The very effect of the amendment has changed the periphery of its applicability. The section which stands after amendment has to be read as a whole - Absence of reference in notification dated 29.03.2018 thereby amending section 45(1) of the Act about its retrospective applicability does not take away the force and impact of amendment. It is for the Legislature to give effect to the amending provisions prospectively or retrospectively. However, that cannot be reason for ineffecting the amending provisions of the Act. The reference arose out of statutory jurisdiction and not constitutional jurisdiction of this Court. Unless there is proper challenge and pleadings, the issue of constitutional validity cannot be undertaken. Undoubtedly, the Legislature has power and competence to amend the provisions of the Act. Unless the amended provision is struck ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the PML Act unconstitutional to the extent of twin conditions incorporated therein for grant of bail. The said submission appears to have been countered by the prosecution stating that due to subsequent amendment introduced vide Act No.13 of 2018, the twin conditions have been revived and therefore the statutory mandate would apply while considering the bail application. 03. To substantiate the contention about non-applicability of twin conditions post decision of the Supreme Court in the case of Nikesh Shah (Supra), reliance was placed on two decisions of this Court in the case of Sameer M. Bhujbal Vs. Assistant Director, Directorate of Enforcement, (B.A. No.286/2018 Bombay High Court) and the case of Union of India Vs. Yogesh Narayanrao Deshmukh (2021) SCC Online Bom 2905. Besides that some decisions of other High Courts in cases of Dr. Shivinder Mohan Singh Vs. Directorate of Enforcement (2020) SCC Online Del 766 (Delhi High Court), Upendra Rai Vs. Directorate of Enforcement (2019) SCC Online Del 9086 (Delhi High Court), Dr.Vinod Bhandari Vs. Assistant Director (2018) SCC Online MP 1559 (Madhya Pradesh High Court) and Most. Ahilya Devi Vs. State of Bihar Ors. (Cri.Mis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion vide Amendment Act 13 of 2018? In turn, we are called upon to answer the above referred question. 06. We have exhaustively heard learned Senior Counsel Mr.Sunil Manohar for the applicant-accused and learned Additional Solicitor General of India (ASGI) Mr. Anil Singh on behalf of the ED. Both of them made elaborate submissions on the issue involved in context with the relevant provisions in different enactments like, The Terrorist and Disruptive Activities (Prevention) Act, 1987, Narcotic Drugs and Psychotropic Substances Act, 1985, The Maharashtra Control of Organised Crime Act, 1999, The Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act, 1989 etc. Besides that both of them placed reliance on various reported judgments, which we prefer to deal contextually. We may hasten to add that submissions were made as if we are dealing with the issue about constitutional validity of the amended provision, which challenge, in fact, is pending before the Supreme Court. RIVAL CONTENTIONS AND ITS ANALYSIS :- 07. Coming to the submissions of learned Senior Counsel Mr.Sunil Manohar, his main thrust was on the point that in view of the declaration made by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ria for the application of twin conditions contained in the opening part of Section 45(1) not having rational nexus with the purpose and intent of the PML Act. The Supreme Court struck down those conditions being linked to the predicated offences and not with the offence of money laundering. The defect which was identified by the Supreme Court was cured by the Legislative amendment. The arbitrariness that was pointed out by the Supreme Court in applicability of twin conditions de-linked with the offence of the PML Act has been rectified by making criteria for application uniformly, namely, for the offences under the PML Act. In other words, by introducing new Legislative amendment, the very basis of invalidity has been removed and cured. He would submit that the Legislature has the power to enact validating laws including power to amend the laws by removing causes of invalidity. 10. In the aforesaid background, the issue which was referred in the present matter is as to whether after Legislative intervention vide Amended Act No.13 of 2018, twin conditions which were struck down in case of Nikesh Shah (supra) stands revived. At the inception, it is to be noted that the constituti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inal section 45(1)(ii) has neither been revived or resurrected by the Amending Act. Moreover, the notification dated 29.03.2018 thereby amending section 45(1) of the PML Act is silent about its retrospective effect. Therefore, as of today, there is no rigor of said twin conditions. 13. The second decision of this Court in line was in case of Union of India Vs. Yogesh Narayanrao Deshmukh (supra). In said case, the learned Single Judge took note of earlier two decisions of this Court in cases of Sameer Bhujbal (supra) and Deepak Virendra Kochar Vs. Directorate of Enforcement (Cri.B.A. No.1322/2020 Bombay High Court). It is expressed that, in Nikesh Shah s case the Hon ble Apex Court has struck down Section 45 of the PML Act, as a whole having found it arbitrary and violative of Article 14 and 21 of the Constitution of India and not just applicability of twin conditions to scheduled offences and, therefore expressed its agreement with the view taken in earlier decisions in the cases of Sameer Bhujbal (supra) and Deepak Kochhar (supra) along with decision of Delhi High Court in Upendra Rai s case. In short, taking a note of the Supreme Court s decision in case of Nikesh Shah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt unless it is struck down by the Courts. Admittedly, the Amending Act has not been struck down meaning thereby its subsequent authorization by Court for its applicability is unwarranted. 17. We have carefully examined the above decisions which speak that Legislative amendment does not revive the twin conditions which were declared unconstitutional by the Supreme Court in Nikesh Shah s case. In most of the cases, respective High Courts have reiterated the view expressed by this Court in case of Sameer Bhujbal (supra). 18. The learned ASGI has assiduously pointed out that the view taken by Delhi High Court in case of Upendra Rai Vs. Directorate of Enforcement (supra) has been stayed by the Supreme Court in SLP (Cri) 2598/2020 vide its order dated 03.06.2020. Likewise, the decision taken in case of Dr. Shivinder Singh (supra) has also been stayed by the Supreme Court in its order dated 31.07.2020 in SLP (Cri) No.3474/2020. The learned ASGI has submitted that the review petition was filed against the decision of Delhi High Court in case of Bimal Kumar Jain (supra) taking contrary view, however, by reiterating the earlier view and expressing that there is presumption in favo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provision of Section 45 (1) of the Act. The pre and post position of section 45 is as below: PRE AND POST POSITION :- Section 45 Prior to Nikesh Tarachand Shah Section 45. Offence to be cognizable and non-bailable. (1) Notwithstanding contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Scheduled shall be released on bail or on his own bond unless- (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the PublicProsecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail; Provided that a person, who, is under the age of 16 years, or is a woman or is sick or infirm, may be released on bail if the special Court so directs: Provided further that the special Court shall not take cognizance of any offence punishable under Section 4 except upon a complaint in writing made by- (i) The di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by a general or special order, and, subject to such conditions as may be prescribed.] (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. Explanation - xxxx 22. The learned Sr.Counsel Mr. Manohar took us through paras 31 to 34 of the judgment wherein the Supreme Court gave illustrations to contend that the applicability of twin conditions would simply depend upon predicated offences incorporated under Part-A of the Schedule which has no nexus with the offences of money laundering punishable under section 4 of the Act. The Supreme Court after quoting few examples observed that there would be arbitrary and discriminatory result about applicability of the twin conditions. 23. Then learned Senior Counsel Mr.Sunil Manohar took us through paras 37, 39 and 40 of the judgment in the case of Nikesh Shah (supra) to contend that the defects pointed out by the Supreme Court have not been remedied by way of amendment. Unless all the defects are cured by way of comprehensive Legislation, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oses serious threat to the financial system of the country. Learned ASGI Mr.Anil Singh has submitted that already the Supreme Court has upheld the validity of twin conditions, namely, section 45(1) in its earlier decision in the case of Gautam Kundu Vs. Directorate of Enforcement (2015) 15 SCC 1 later on approved by the Supreme Court in another decision in case of Rohit Tandon Vs. Director of Enforcement (2018) 11 SCC 46 . His line of argument is that in case of Nikesh Shah (supra) per se applicability of the twin conditions to the PML Act has not been struck down but considering the defects about its applicability depending upon predicated offence twin conditions are held unconstitutional, which now stood rectified. 27. Learned ASGI would contend that offence of money laundering being an economic offence constitute a class apart and need to be visited with different approach. For this purpose he relied on the decision of Y.S. Jagan Mohan Reddy Vs. CBI, (2013) 7 SCC 439 . He also took us through observations made by the Division Bench of this Court in the case of Anil Vasantrao Deshmukh Vs. Directorate of Enforcement, 2021 SCC On Line Bom 3641. In said case, this C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the effect of which is to remove the basis and foundation of the judgment. If this is done, the same does not amount to statutory overruling. 25. However, the Legislature cannot set at naught the judgments which have been pronounced by amending the law not for the purpose of making corrections or removing anomalies but to bring in new provisions which did not exist earlier. The Legislature may have the power to remove the basis or foundation of the judicial pronouncement by the Legislature cannot overturn or set aside the judgment, that too retrospectively by introducing a new provision. The legislature is bound by the mandamus issued by the court. A judicial pronouncement is always binding unless the very fundamentals on which it is based are altered and the decision could not have been given in the altered circumstances. The Legislature cannot, by way of introducing an amendment, overturn a judicial pronouncement and declare it to be wrong or a nullity. What the Legislature can do is to amend the provisions of the statute to remove the basis of the judgment. 30. Learned ASGI would submit that the Legislature vests with a power to correct the error pointed by the Courts. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oser scrutiny would confer legitimacy on such an exercise as the same is a normal adjunct of the legislative power. The whole exercise is one of viewing the different spheres of jurisdiction exercised by the two bodies i.e. the judiciary and the legislature. The balancing act, delicate as it is, to the constitutional scheme is guided by the well-defined values which have found succinct manifestation in view of this Court in Bakhtawar Trust. 32. The Legislative competence of introducing Amending Act has not been disputed, nor countered on any count. Certainly the legislature cannot by way of amendment undo the decision of Courts. However, the Legislature has power to rectify through amendment the defect noticed or highlighted by the decision of the Court. The purpose behind amendment is not to over rule the decision of the Court but simply to correct it and to remove the basis on which the provision has been declared as unconstitutional. 33. We may note that when the Prevention of Money Laundering Bill, 1999 was tabled before the Parliament, the twin conditions for release on bail would apply only insofar as offence under the PML Act itself. In case of Nikesh Shah (supra) th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... example, clause 1(A) of section 45 is a special provision for power to investigate by authorized person which still exists. In short, he would submit that reintroduction of twin conditions is not necessary, as the section remains in Statute book, though held certain portion ineffective by decision of the Supreme Court. 38. It is a settled law that a statute must be given its effect unless it is struck down. Always there is presumption about constitutionality of the provisions of law. For this purpose, we may refer to the decisions of the Supreme Court in the cases of Nagaland Senior Government Employees Welfare Association and Others Vs. State of Nagaland and Ors., (2010) 7 SCC 643 and M.L. Kamra Vs. The Chairman cum Managing Director, New India Assurance Co. Ltd. and Anr., AIR 1992 SC 1072. Unless the provision introduced by the Legislature is struck down or wiped up from Statute book, its effect cannot be nullified unless found to be exceptionally undoing the earlier decision of the Court. SCOPE OF THE REFERENCE :- 39. Essentially the reference arises out of bail application. The limited question is referred to the Larger Bench to decide whether the twin conditio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stain and entertain the challenge. The said exercise would be, of course, by appropriate proceeding in proper way. The Supreme Court in the case of A.C. Estates Vs. Serajuddin Co. (1973) 2 SCC 324 has observed that when the question of ultra vires is wholly foreign to the scope and jurisdiction of initial authority, then it will not be open to the High Court to go into those questions in proceeding arising out of said initial proceeding. 42. Full Bench of this Court in the case of Shikshan Prasarak Mandal, Akola Vs. Laxmikant Balkrishna Joshi Ors., 2004(1) Mh.L.J.619 has expressed that the Reference Court exercises advisory and consultative and not original jurisdiction under Article 226 of the Constitution of India. Power under Rule 7 of Chapter-1 of the Bombay High Court Appellate Side Rules, 1960 is distinct and separate than the one under Article 226 of the Constitution and can generally be invoked for the limited purpose to resolve inconsistency on the point of law. Reference Bench should decide the questions which are referred to it and it does not decide the issues which are not referred to it. The Supreme Court in the case of Indra Sawhney Etc. Etc vs Union ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ew is fortified by recent decision of the Supreme Court in the case of Assistant Director, Directorate of Enforcement Vs. V.C. Mohan decided on 04.01.2022. In said case, High Court of Telangana at Hyderabad has granted anticipatory bail in connection with offence under the PML Act. It is observed that though offence under the PML Act is dependent on the predicate offences that does not mean that while considering the prayer for bail, in connection with offence under the PML Act, the mandate of section 45 of the PML Act would not come into play. Pertinent to note that the judgment in Nikesh Shah s case was brought to the notice of the Supreme Court. However, it is observed that the underlying principles and rigor of section 45 of the Act must get triggered although the application is under section 438 of the Cr.P.C. The reading of said judgment conveys that the Supreme Court in its above pronouncement even after taking note of the decision of Nikesh Shah (supra) has expressed that the rigor of Section 45 of the PML Act would be attracted while dealing with bail application. 46. It is argued that the Amending Act has not reintroduced twin conditions in Section 45 of the Act. I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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