The Allahabad High Court has held that the restriction under section 45 of Prevention of Money Laundering Act (PMLA) is not applicable to constitutional courts in granting bail to money laundering accused.
The bench of Justice Subhash Vidyarthi has observed that the restriction contained in Section 45 of PMLA that bail cannot be granted to a person accused of an offence under the PMLA without recording a prima facie satisfaction of innocence of the applicant, is not applicable to the Constitutional Courts in view of the harmonious interpretation of Sections 44 and 45 of PMLA and, therefore, irrespective of the fate of the applications under Section 482 Cr.P.C., this Court need not record a prima facie satisfaction of innocence of the applicants.
Table of Contents
What is Section 45 of PMLA?
Section 45 of the PMLA, which contains certain restrictions on the Courts’ power to grant bail, does not contain any provision saving the special powers to grant bail conferred upon the High Courts by Section 439 Cr.P.C., whereas Section 44 of the PMLA, which confers jurisdiction for trial of offences under the Act upon Special Courts and which does not contain any provision which may affect the powers of any Court regarding grant of bail, provides that nothing contained in Section 44 shall affect the High Court’s special powers regarding bail under Section 439 Cr.P.C.
The provision contained in Section 44 (2) of PMLA saving special powers of the High Courts regarding grant of bail was meant to be incorporated in Section 45 of the Act, but it has erroneously been placed just above Section 45.
High Court’s Power To Grant Bail In Acts Dealing with Heinous Crimes & Section 45 of PMLA
Section 12 (1) and 12 (2) of the Anti-Hijacking Act, 2016 contains a provision similar to Section 45 (1) and 45 (2) of PMLA, but a provision similar to Section 44(2) of PMLA is also contained Section 12(3) of the Anti-Hijacking Act.
The High Courts’ special powers for grant of bail under Section 439 Cr.P.C. have been saved even when the punishment for the offence of hijacking provided in Section 4 is upto death.
Under the Suppression of Unlawful Acts Against Safety of Civil Aviation Act, 1982 carry a punishment of imprisonment for life and Section 6A of the Act.
Section 3 of the Maritime Anti-Piracy Act, 2022 provides that the offence of piracy will carry a maximum punishment of imprisonment upto life and in case the person committing piracy cause death of any person or attempts to cause death, he may be punished with death.
The Acts deal with heinous offences like hijacking of aero planes, unlawful acts against safety of civil aviation, maritime piracy, unlawful acts against safety of maritime navigation and fixed platforms on continental shelf, and offences relating to manufacture and sale of adulterated or spurious drugs, which would affect a very large number of population, and the offences carry punishment upto death.
All the Acts contain restrictions of Courts’ power to grant bail to an accused person, which are similar to the restriction provided in Section 45 (1) and (2) of PMLA. All the acts provide that the aforesaid restrictions can be waved by the Special Courts in case of a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, like the provision contained in the proviso appended to Section 45 (1) of PMLA.
Although the High Courts’ discretion in the matter of grant of bail has been saved in respect of offences as serious as hijacking of aero planes and piracy on ships or manufacture or sale of adulterated or spurious drugs, by inserting a sub-section in the particular Section which contains restrictions against grant of bail, in PMLA, the clause saving the special powers of High Courts has been placed at a wrong place in Section 44.
Pari materia provisions contained in several Statutes dealing with heinous offences carrying punishment upto death, the only irresistible conclusion that can be drawn is that the provision contained in Section 44 (2) of PMLA saving special powers of the High Courts regarding grant of bail was meant to be incorporated in Section 45 of the Act, but it has erroneously been placed just above Section 45. In present times of use of computers, such errors are commonly referred to as the “copy-paste errors”.
Legislative Intent
Section 44(2) was inserted by the Parliament with the intention to save the special power of the High Courts under Section 439 Cr.P.C., which intention cannot be fulfilled due to an erroneous placement of the provision as pointed above.
This Court has to interpret the provisions contained in Sections 44 and 45 of PMLA collectively so as to give “force and life” to the intention of the legislature behind inserting Section 44(2) in the Act.
Undoubtedly, if the makers of the Act had themselves come across this jumbling of the provisions in Sections 44 and 45 due to a copy-paste error, they have surely have straightened it out by reading Section 44(2) and Section 45 in conjunction with each other.
Therefore, in order to correct the defect without altering the provisions of the Statute, the provisions of Sections 44 and 45 have to be read together and interpreted harmoniously so that Section 44(2) does not become redundant or otiose.
Background
The charge-sheets filed by CBI state that up to the year 2000, coal was a controlled commodity and industrial units used to get coal upon recommendation and sponsoring by the Directorate of Industries. In the Year 2000, the Government of India notified the Colliery Decontrol Order and thereafter no recommendation of the Directorate of Industries was required for allotment of coal to industrial units and the sponsoring of coal from Directorate of Industries was stopped in the year 2003.
The Government announced the New Coal Distribution Policy (NCDP) in October 2007 under which coal was to be supplied to non-core Small Scale Industrial consumers through Fuel Supply Agreements (FSA) directly from Coal India Ltd. / subsidiary coal companies.
Clause 4.4 of FSA provides that the purchaser would not sell/divert or transfer the coal for any other purpose whatsoever and it would be treated as a material breach of the agreement. In the event of the purchaser engaging or planning to engage in any resale of coal, the seller (NCL/CIL) would terminate the agreement forthwith without any liability or damages whatsoever payable to the purchaser.
Upon joint inspection of the factories, it was found that the factories were non-functional and they had sold away the coal in breach of the condition contained in clause 4.4 of the FSA, without processing the same into SSF.
The applicant has filed the Anticipatory Bail Application. It is stated in the complaints filed by E.D. that he and Yogendra Nath Pandey – another officer of the DIC, had misused their official positions by certifying falls/fabricated reports prepared by the companies regarding proper utilization of coal received from NCL and about functioning of SSF manufacturing units without proper physical inspection. Their act facilitated continuous supply of coal from NCL, which resulted in generation of wrongful gain.
The applicant Ramji Singh and Yogendra Nath Pandey were indirectly involved in the activity of abetment with regard to generation of proceeds of crime and thereby they committed the offence of money- laundering.
Conclusion
The court noted that all the applicants have cooperated with the investigation and they have got their statements recorded. Investigations stand complete and the E.D. has filed complaints after completion of investigation.
The court allowed the anticipatory bail application. As the applicants have already furnished bail bonds in furtherance of the interim orders passed in their favour, they need not furnish any fresh bail bonds. The conditions of bail imposed in the interim orders shall continue to bind the applicants.
Case Details
Case Title: Ramji Singh Versus ED
Case No.: Criminal Misc Anticipatory Bail Application U/S 438 CR.P.C. No. – 1518 of 2023
Date: 12.09.2023
Counsel For Petitioner: Himanshu Hemant Gupta
Counsel For Respondent: Rohit Tripathi
