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TMI Blog2022 (1) TMI 1252X X X X Extracts X X X X X X X X Extracts X X X X ..... the tune of Rs.1137 crores to the investors. With regard to the investment mobilized from the public, the SEBI, by its interim order dated 20.08.2015 and final order dated 30.03.2016, directed the Company and its Directors to wind up the investment schemes and refund the money due to the investors. However, the Directors had failed to refund the money to the investors. Based on the reference from the SEBI and the complaints received from the investors/public, the Economic Offences Wing of the Tamil Nadu Police registered a case in Crime No.6 of 2016, dated 02.06.2016, for the offences under Sections 406, 420, 120B of IPC read with Section 5 of the TNPID Act - So far as application of Section 45 is concerned, the said provision was amended on 19.04.2018. No doubt, the legislature has the power to cure the underlying defect pointed out by a Court, while striking down a provision of law and pass a suitable amendment. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itions in Crl.O.P.Nos.673, 675 and 677 of 2021 seeking for bail. The said petitions were dismissed on 02.02.2021 on the ground that investigation was pending. The Economic Offences Wing of Tamil Nadu Police had registered a case in Crime No.6 of 2016 on 02.06.2016, for the alleged commission of offences under Sections 406, 420, 120B of IPC read with Section 5 of the Tamil Nadu Protection of Interest of Depositors (in Financial Establishment) Act, 1997 (TNPID Act) and they were granted Anticipatory Bail and subsequently, the Anticipatory Bail granted to them came to be cancelled and during their incarceration, the Committee of Administrator appointed by the Hon'ble First Bench of this Court had seized and got over almost all documents pertaining to the properties and some of the properties are also brought for sale and this Court had also confirmed the sale in respect of some of the properties. 5.1 Mr.R.Jayaprakash, learned counsel appearing for the petitioners submitted that since the investigation done by the respondent has been completed and complaint has also been filed, which is yet to be taken on file, the question of hampering investigation and tampering of witnesses wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the 2002 Act with which we are not directly concerned. 31. The statutory history of Section 45, read with the Schedule, would, thus show that in its original avatar, as Clause 44 of the 1999 Bill, the Section dealt only with offences under the Act itself. Section 44 of the 2002 Act makes it clear that an offence punishable under Section 4 of the said Act must be tried with the connected scheduled offence from which money laundering has taken place. The statutory scheme, as originally enacted, with Section 45 in its present avatar, would, therefore, lead to the same offenders in different cases having different results qua bail depending on whether Section 45 does or does not apply. The first would be cases where the charge would only be of money laundering and nothing else, as would be the case where the scheduled offence in Part A has already been tried, and persons charged under the scheduled offence have or have not been enlarged on bail under the Code of Criminal Procedure and thereafter convicted or acquitted. The proceeds of crime from such scheduled offence may well be discovered much later in the hands of Mr. X, who now becomes charged with the crime of money laundering ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r over three years. The likelihood of Mr. X being enlarged on bail in the first three illustrations is far greater than in the fourth illustration, dependant only upon the circumstance that Mr. X is being prosecuted for a Schedule A offence which has imprisonment for over 3 years, a circumstance which has no nexus with the grant of bail for the offence of money laundering. The mere circumstance that the offence of money laundering is being tried with the Schedule A offence without more cannot naturally lead to the grant or denial of bail (by applying Section 45(1)) for the offence of money laundering and the predicate offence. .............. 53. The matter came to this Court by a certificate of fitness granted by the High Court. Sikri, J and Ramana, J., by their order dated 12th August, 2016, stated: "Though the High Court has granted certificate to appeal, we have heard the learned counsel for some time and are of the opinion that the impugned judgment of the High Court is correct. This appeal is, accordingly, dismissed." The complaint of the learned Attorney General is that this was done at the very threshold without hearing the Union of India. Be that as it may, we are of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bail under Section 45(1) of the PMLA as are now sought to be pressed into service by the ED cannot be considered to have revived or resurrected only on the prospective substitution of the words 13 of 19 "punishable for a term of imprisonment of more than three years under Part A of the Schedule" with the words "under this Act" especially without there being any amendment with regard to the twin conditions for grant of bail which had specifically been declared to be unconstitutional as also in the absence of any validating law in this regard with retrospective effect. .............." (iii) 2021 SCC Online Del 3901 [Amarendra Dhari Singh vs Directorate Of Enforcement ], wherein the Division Bench of Delhi High Court held as follows: ".......... 36. Reliance by the respondent has been placed on Bimal Kumar Jain and Naresh Jain Vs. Directorate of Enforcement BAIL APPLN.112/2021 and CRL. M. (BAIL) 81/2021; BAIL APPLN. 122/2021. The said bail application has been decided only on the basis of parameters as laid down U/s 439 of the Cr.PC. Therefore, in view of the above, the provisions of Section 439 of Cr.P.C and the conditions therein will apply in the case of pet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tratum of foundation of a judgment, the said exercise is a valid legislative exercise provided it does not transgress any other constitutional limitation." 28. To arrive at the said conclusion, the two-Judge Bench reproduced from the decision in Constitution Bench in State of T.N. v. Arooran Sugars Ltd (1997) 1 SCC 326 which is to the following effect:- "It is open to the legislature to remove the defect pointed out by the court or to amend the definition or any other provision of the Act in question retrospectively. In this process it cannot be said that there has been an encroachment by the legislature over the power of the judiciary. A court's directive must always bind unless the conditions on which it is based are so fundamentally altered that under altered circumstances such decisions could not have been given. This will include removal of the defect in a statute pointed out in the judgment in question, as well as alteration or substitution of provisions of the enactment on which such judgment is based, with retrospective effect." (ii) 2019(9) SCC 24 [P. Chidambaram v. Directorate Of Enforcement ] wherein the Hon'ble Supreme Court held as follows: " .........36. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence under this Act 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 Public Prosecutor 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 sixteen there are reasonable grounds for years, or is a woman or is sick or infirm, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money laundering a sum of less than one crore rupees may be released on bail, if the Special court so directs: (iii) The order of the Hon'ble Supreme Court made in S.L.P.(CRl.)No.5191 of 2021 [Satender Kumar Antil v. Central Bureau Of Investigation ] wherein the Hon'ble Supreme Court held as follows;- " ...........We are inclined to accept the guidelines and make them part of the order of the Court for the benefit of the Courts below. The Guidelines areas under :- "Cat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tigation including a possible recovery is needed, the aforesaid approach cannot give them benefit, something we agree with. (iv) The order of the Hon'ble Supreme Court made in Miscellaneous Application No.1849 of 2021 in S.L.P. No.5191 of 2021 [Satender Kumar Antil v. Central Bureau Of Investigation ] wherein the Hon'ble Supreme Court held as follows "Learned senior counsels for parties state that they will endeavour to work out some of the fine tuning which is required to give meaning to the intent of our order dated 07.10.2021 We make it clear that our intent was to ease the process of bail and not to restrict it. The order, in no way, imposes any additional fetters but is in furtherance of the line of judicial thinking to enlarge the scope of bail. At this stage, suffice for us to say that while referring to category 'C', inadvertently, Section 45 of Prevention of Money laundering Act (PMLA) has been mentioned which has been struck down by this Court. Learned ASG states that an amendment was made and that is pending challenge before this Court before a different Bench. That would be a matter to be considered by that Bench. We are also putting a caution that mer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule 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 Public Prosecutor 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 sixteen 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 Director; or (ii) any officer of the Central Government or 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 inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... classified thereunder in Part A of the Schedule was held arbitrary and discriminatory and invalid in Nikesh Tarachand Shah v. Union of India (2018)11 SCC 1 . Insofar as the twin conditions for release of the accused on bail under Section 45 of the Act are concerned, the Supreme Court held (at SCC p. 15. para 3) the same to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. Subsequently, Section 45 has been amended by Amendment Act 13 of 2018. The words "imprisonment for a term of imprisonment of more than three years under Part A of the Schedule" has been substituted with "accused of an offence under this Act...". 14. Further, in Mohd. Arif vs. Govt. of India, 2020 SCC OnLine Ori 544, the Orissa High Court has held as under:- " 23. While deciding a bail application, the provisions of Section 45 read with Section 24 which reverses the burden of proof and creates presumption of guilt required to be dislodged by the accused, will mandatorily apply. A similar view of the matter has been reiterated in Rohit Tandon v. Directorate of Enforcement. It may further be held that the reliance placed by the petitioner on Nikesh Tarachand ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eference from the SEBI and the complaints received from the investors/public, the Economic Offences Wing of the Tamil Nadu Police registered a case in Crime No.6 of 2016, dated 02.06.2016, for the offences under Sections 406, 420, 120B of IPC read with Section 5 of the TNPID Act. The Economic Offences Wing had registered a case in ECIR No.ECIR/MDSZO/04/2018 on 09.07.2018. The respondent issued an order of arrest on 09.12.2020 under section 19(1) of PMLA and remanded to judicial custody. 9. In the appeal filed against the order granting bail to the petitioners, the Hon'ble Supreme Court in S.L.P. (Crl.)Nos. 7563-7565 of 2021, by order dated 22.11.2021, observed that the High Court has not dealt with the issue with regard to the statutory bar for grant of bail in offences concerning Prevention of Money Laundering Act. 10. So far as application of Section 45 is concerned, the said provision was amended on 19.04.2018. 11. The learned counsel for the petitioners has not disputed that a Special Leave Petition is pending before the Hon'ble Supreme Court challenging the amended provision of Section 45 of PMLA. 12. In S.L.P. (Crl.)Nos. 7563-7565 of 2021, the Hon'ble Supreme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rects 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. Therefore, merely because the entire section is not re-enacted would be of no consequence, since the provision even after being declared unconstitutional, does not get repealed or wiped out from the statute book and it only becomes unenforceable. Therefore, once the Parliament steps in and cures the defect pointed out by a Constitutional Court, the defect appears to be cured and the presumption of constitutionality is to apply to such provision. Therefore, there is a presumption in favour of constitutionality since the amended section 45(1) of the PMLA has not been struck down. 17. So far as section 43(1)(ii) of PMLA is concerned, the respondent took a stand as to the attitude of the accused in not cooperating with the Investigating Agency, Economic Offences Wing, Government Of Tamil Nadu, their cancellation of bail, in the event of arrest and the amount and number of depositors involved and took a categorical stand that the petitioners have ..... 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