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Synopsis

The Supreme Court has said the rigours under Section 45 of the Prevention of Money Laundering Act for bail of an accused can be relaxed if the custody is for a considerable period of time and there is no likelihood of conclusion of trial within a short span.

A bench of Justices Hrishikesh Roy and S V N Bhatti said the right of an accused for expeditious trial and that the fundamental rights guaranteed under Article 21 of the Constitution cannot be subjugated to the statutory bar in Section 45 of the Act.

"The right to bail in cases of prolonged incarceration and trial delays, depending on the nature of the allegations, should be considered under Section 439 Cr. PC and Section 45 of the Act. Most importantly, bail should not be withheld as a form of punishment," the bench said, citing Manish Sisodia case.

In its order on September 2, the bench granted bail to Vijay Nair, Communication-in-Charge of the Aam Aadmi Party in Delhi liquor policy scam case.

"The right of liberty guaranteed under Article 21 of the Constitution is a sacrosanct right which needs to be respected even in cases where stringent provisions are incorporated in the special enactments. In the case at hand, the petitioner has been in custody for over 22 months and his incarceration as an under-trial cannot be the mode of punishment in the case," the bench said.

The bench underscored bail is the rule, and its refusal is the exception, by referring to previous judgments in Manish Sisodia Vs Directorate of Enforcement and Prem Prakash Vs Union of India through the Directorate of Enforcement. 

"The liberty guaranteed under Article 21 of the Constitution does not get abrogated even for special statutes where the threshold twin bar is provided and such statutes, in our opinion, cannot carve out an exception to the principle of bail being the rule and jail being the exception. The cardinal principle of bail being the rule and jail being the exception will be entirely defeated if the petitioner is kept in custody as an under-trial for such a long duration," the bench said.

The court said this is particularly glaring since in the event of conviction, the maximum sentence prescribed is only seven years for the offence of money laundering.

In the case, it was alleged the petitioner acted as a middleman and was involved in irregularities in framing and implementing the Delhi Excise policy. 

Senior Advocates A M Singhvi and Rebecca M John, appearing for the petitioner, submitted that the petitioner was arrested on November 13, 2022, and had been in custody for about 22 months. 

They also pointed out that since the charge was of money laundering under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002, the maximum punishment in the event of conviction was seven years and as such further detention would not be justified. 

The counsel also said that the petitioner deserved parity for bail having been granted to Sisodia and K Kavitha.

Appearing for the Enforcement Directorate, Additional Solicitor General S V Raju referred to the threshold bar under Section 45 of the Act to oppose bail.

Referring to the case of K Kavitha, he submitted that she being a woman, had the benefit of the proviso to Section 45(1) of the Act.

In the case, the court noted that the materials on record indicated that one Dinesh Arora who was arrayed as an accused in the case and who thereafter turned approver, in his 12th statement had implicated the accused petitioner but in all his previous statements given under Section 50 of the Act, there was no implication for the petitioner. 

The ED has submitted as many as nine prosecution complaints, one after the other and in the meantime, the petitioner has been in custody for about 22 months. In the event of conviction, the maximum sentence that can be imposed on the petitioner is seven years, it noted.

The court also noted that as many as 40 persons had been named as accused in the cases with nine complaints and the prosecution is expected to examine around 350 witnesses.

The documents filed by the Directorate of Enforcement ran into over 25,000 pages, the bench also noted, adding, "It appears to be a case of continuing investigation for over two years".

Though Raju referred to Vijay Madanlal Choudhary Vs Union of India (2022) to argue that stringent conditions of bail under Section 45 of the Act have to be satisfied before granting Bail, "However, this court in a series of decisions has held that the rigours under Section 45 can be relaxed if the custody is for a considerable period of time and there is no likelihood of conclusion of trial within a short span," the bench said, holding the petitioner entitled for bail.

Case Title: Vijay Nair Vs Directorate of Enforcement