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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 ..... e PML Act, for grant of bail in ECIR/NGSZO/13/2021 registered at the Director of Enforcement (ED), Sub-Zonal Office, Nagpur, in connection with the offence of money laundering in terms of section 3 of the PML Act punishable under section 4 of the said Act. BACKGROUND FOR REFERENCE :- 02. During the course of hearing of bail application, learned Counsel appearing for applicant-accused canvassed that rigor of complying duel conditions incorporated in section 45(1)(ii) of the PML Act would not apply in view of the decision of the Supreme Court in the case of Nikesh Shah (supra). It is the contention that the Supreme Court has declared section 45(1) of 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 plac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... shmukh (supra). 05. Reluctance of learned Single Judge for concurring with earlier view expressed by coordinate Benches persuaded him to make reference to the Larger Bench for an authoritative pronouncement. In the wake of such position, the learned Single Judge vide its order dated 03.12.2021 framed the following question to be answered by the Larger Bench:- QUESTION REFERRED :- "Whether the twin conditions in section 45(1) of the 2002 Act, which was declared unconstitutional by the judgment of the Apex Court in Nikesh T.Shah Vs. Union of India (2018) 11 SCC 1, stand revived in view of the Legislative intervention 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 Orga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail with respect to an offence of money laundering which is a serious economic offence would revive. He contended that the twin conditions incorporated in section 45(1) of the PML Act, have been declared ultravires in case of Nikesh Shah (supra) not because of any inherent defect in these two conditions in itself, but because of its dependency, its applicability on predicated offence i.e. offences included in Part-A of the Schedule, as those scheduled offences are not offences of money laundering, but different one. The learned ASGI would submit that the unconstitutionality arose on account of criteria 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, name ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the Finance Act, 2018 and thus rectified the defects pointed out by the Supreme Court. In short, it was contended that after amendment, the twin conditions have been revived. The Court expressed (Sameer Bhujbal's case) that the Supreme Court in Nikesh Shah's case has struck down section 45 of the Act as a whole. The Supreme Court expressed in para 45 that 'we declare section 45(1) of the PML Act insofar as it imposes two further conditions for release on bail, to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India'. It is expressed that even after amendment original 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/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed into service to uphold the submission that Legislative amendment does not have effect of revival of twin conditions. In said case, Delhi High Court has expressed that, although there has been amendment to section 45 of the PML Act, however, after the judgment of Nikesh Shah (supra), there is no subsequent decision of the Supreme Court holding that said two conditions to be constitutionally valid, even when brought back by way of amendment. We are not in agreement with the said line of thinking, since there is presumption of constitutionality of statutory amendment 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Legislature cannot undo what the Constitutional Court has struck down. Learned Sr. Counsel Mr.Manohar took us through various paragraphs of the judgment of Nikesh Shah (supra) to contend that several defects have been pointed out by the Constitutional Court of which care has not been taken by the Amending Act of 2018. 21. In case of Nikesh Shah (supra), the very question about Constitutional validity of Section 45 of the PML Act with reference to twin conditions incorporated therein was under challenge. After said decision, the Legislature has amended 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government. [(1A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government 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 discr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ication is under 438 of the Cr.P.C. 26. Learned ASGI took us through preamble of the PML Act which inter alia provides that it is an enactment to prevent money laundering and to provide confiscation of property derived from or involved in money laundering and or matters connected there with or incidental thereto. It is submitted that the offence of money laundering poses 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e power to amend laws with retrospective effect. However, this can be done to remove causes of invalidity. When such a law is passed, the Legislature basically corrects the errors which have been pointed out in a judicial pronouncement. Resultantly, it amends the law, by removing the mistakes committed in the earlier legislation, 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... laratory, the courts will lean in support of the legislative power to remove the basis of a court judgment even retrospectively, paving the way for a restoration of the status quo ante. Though the consequence may appear to be an exercise to overcome the judicial pronouncement it is so only at first blush; a closer 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 basi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of the Amending Act for making comments on its propriety and correctness. 37. Learned ASGI Mr. Anil Singh in a bid to convince that the entire section does not require re-enactment stated that there are some other provisions under section 45 of the Act, which still remains. For 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 canno ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as been no assail to the constitutional validity of the Amendment Act, since the reference arose out of bail application. In order to raise the challenge to the constitutional validity, at least prima facie acceptable grounds in support have to be pleaded to sustain 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 pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ouncement of P. Chidambaram's case (supra), the Supreme Court took a note of its earlier decision in case of Nikesh Shah (supra) and subsequent amendment, but never expressed that despite amendment, twin conditions do not survive. Our view 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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