Money Laundering Serious Offence, Courts Can't Grant Bail Casually Without Considering S.45 PMLA Conditions : Supreme Court

The Supreme Court February 13 set aside the bail granted to the individual accused of committing money laundering after noting that the High Court failed to satisfy the twin conditions stipulated under Section 45 of the Prevention of Money Laundering Act, 2002 (“PMLA”).

The Court reiterated that the conditions enumerated in Section 45 will have to be complied with even in respect of application for bail made under Section 439 of Cr.P.C. Also, Section 24 provides that in case of a person charged with the offence of money-laundering under Section 3, the Authority or Court shall, unless the contrary is proved, presume that such proceeds of crime are involved in money-laundering. Therefore, the burden to proof that proceeds of crime are not involved in money laundering would lie on the person charged with the offence.

Section 45 PMLA mandatory

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The Court reiterated that the twin conditions under Section 45 are "mandatory in nature." Referring to Vijay Madanlal Choudhary and other precedents such as Tarun Kumar v Asst Director ED, the Court observed that "there remains no shadow of doubt that the consideration of the two conditions mentioned in Section 45 is mandatory, and that while considering the bail application, the said rigours of Section 45 have to be reckoned by the court to uphold the objectives of the PMLA."

Allowing the Enforcement Directorate's (ED) appeal against a judgment of the Patna High Court, a bench of Justices Bela M Trivedi and Prasanna B Varale rejected the respondent/accused argument that the Appellant/ED had relied upon the statements of the respondent/accused recorded under Section 50 of the PMLA upon being summoned rendering them inadmissible in evidence.

Compassionate Appointment To Be Granted Only In “Hand-to-Mouth” Cases, Not Due To Mere Fall In Life Standard : Supreme Court

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The Supreme Court, while determining a case related to compassionate appointment, observed that such appointment should be granted only in “hand-to-mouth” cases, provided that all the other conditions are fulfilled. Explaining, the Court said that such situations would include a family 'below the poverty line' and struggling to pay basic expenses.

“It is only in “hand-to-mouth” cases that a claim for compassionate appointment ought to be considered and granted, if at all other conditions are satisfied. Such “hand-to-mouth” cases would include cases where the family of the deceased is 'below poverty line' and struggling to pay basic expenses such as food, rent, utilities, etc., arising out of lack of any steady source of sustenance. This has to be distinguished from a mere fall in standard of life arising out of the death of the bread earner.”

The Court also said that the underlying idea behind compassionate appointment in case of an employee's death is that he/ she was the sole earner for the family. The Court said that there is no straitjacket formula to be applied uniformly in cases of employee dying in harness. Each case has its own peculiar features and the financial condition must be assessed.

Notably, it has been more than two decades since the claim for compassionate appointment was made. 2001. The respondent's father was working for the appellant bank and passed away in the year 2001, before his retirement. Accordingly, the respondent sought an appointment on compassionate grounds under the 1993 scheme. The Appellant's Deputy General Manager rejected the same on the grounds that the respondent's mother was already getting a family pension and that the respondent was overaged for the applied post.

“If, indeed, the respondent's father would have received a pension amount of Rs. 6398/- and burdened to feed himself as well as his two dependants, viz. his spouse and son, the amount of family pension initially sanctioned, i.e., Rs. 4637.92 could not have, by any stretch of imagination, be seen as insufficient or inadequate for feeding two mouths. It is also not in dispute that the net terminal benefits in a sum of Rs. 3.09 lakh paid to the respondent/his mother would have been the same amount which the deceased would have received as terminal benefits after superannuation, had he been alive.,” the Court added.

Building on this, the Court concluded that the present case is not the one where the respondent's father's death caused such severe hardship that could only have been remedied through the compassionate appointment. Placing its reliance on Union of India v. B. Kishore, the Court observed:

“As pertinently held in B. Kishore (supra), indigence of the dependants of the deceased employee is the fundamental condition to be satisfied under any scheme for appointment on compassionate ground and that if such indigence is not proved, grant of relief in furtherance of protective discrimination would result in a sort of reservation for the dependents of the employee dying-in-harness, thereby directly conflicting with the ideal of equality guaranteed under Articles 14 and 16 of the Constitution.”

However, at the same time, the Court, after invoking its inherent power, directed the appellant to make a lump sum payment of Rs.2.5 lakh to the respondent within two months. The same was directed in view of a previous order by a coordinate bench, observing that it would consider directing a lumpsum amount payment to the respondent as a final settlement.

“Though no agreement was reached and whether the respondent is covered under the scheme of 2005 for lumpsum ex-gratia payment has not been examined by us as well as by the High Court, but bearing in mind the approach of the coordinate bench coupled with the circumstance of hope being generated in the mind of the respondent for appointment based on his success before the High Court, we are satisfied that interest of justice would be sufficiently served if the appellant is directed to make a lumpsum payment of Rs.2.5 lakh to the respondent within a period of 2 (two) months from date and the proceedings be closed.,”

In view of this, the Court set aside the impugned orders and dismissed the appeal.