Source: Supreme Court

Why in News?

Recently, the Supreme Court in the matter of Prem Prakash v. Union of India through the Directorate of Enforcement has held that bail is Rule, and jail is an exception even in the Prevention of Money Laundering Act 2002 (PMLA).

What was the Background of the Prem Prakash v. Union of India through the Directorate of Enforcement Case?

• In the present case, First Information Report (FIR) was registered for offences punishable under Sections 406, 420, 467, 468, 447, 504, 506, 341, 323 and 34 of the Indian Penal Code, 1860 (IPC).
• In view of Section 420 and 467 of IPC, being Scheduled Offences, investigation under the PMLA was initiated.
• The Enforcement Directorate (ED) investigated the offence.
• The allegation was that accused Rajesh Rai illegally and fraudulently made a Power of Attorney in the name of Imtiaz Ahmad and accused Bharat Prasad and on the basis of said Power of Attorney prepared a forged sale deed and sold the land to accused Punit Bhargava, an accomplice of the appellant.
• It is further alleged that the said land was transferred by accused Punit Bhargava to accused Bishnu Kumar Agarwal vide two sale deeds.
• The appellant was taken into custody on 11th August 2023. He was already in custody from 25th August 2022.
• The appellant argued that due to examination of various witnesses he was not granted bail which violates his fundamental rights.
• Appellant's bail application was rejected by the Special Judge and the High Court.
• Aggrieved, the appellant filed a Special Leave Petition before the Supreme Court.

What were the Court’s Observations?

• The Supreme Court observed that provisions of Section 45 of PMLA which states two conditions to grant bail.
  • This provision is not an exception to the general rule of bail, it provides twin conditions to be followed before granting bail.
  • The Supreme Court highlighted the general rule that “Bail is the Rule and Jail is an exception”.
• The Supreme Court also stated that Section 45 of PMLA is paraphrasing of Article 21 of the Constitution of India (COI) which states that no person shall be deprived of his life or personal liberty except according to the procedure established by the law.
• The Supreme Court further added liberty of the individual is always the rule and deprivation is the exception. Deprivation can be made only by the procedure established by the law which has to be valid and reasonable.
• The Supreme Court therefore accepted the petition of the appellant and granted bail.

What is the Applicability of General Principle of “Bail is Rule” Under PMLA?

About:

• There are different provisions provided in various acts for bail in India.
• Section 45 (1) of the PMLA amended in the year 2019 and deleted the two extra conditions given for granting bail as they were in violation of Article 14 and Article 21 of the COI.
• The changes were brought by the landmark judgement of Nikesh Tatrachand Shah v. Union of India & Othrs. (2017).
• Section 438 of Code of Criminal Procedure, 1973 (CrPC) is a procedural provision concerned with the personal liberty of each individual, who is entitled to the benefit of the presumption of innocence.
• Section 43D (5) of the Unlawful Activities Prevention Act, 1967 lays down the foundation for bail proceedings, delineating stringent conditions for release.
• Under this provision, an accused facing charges punishable under Chapters IV and VI of the UAPA must prove to the court, based solely on police documentation, that the accusations are not prima facie true.
• This legal framework effectively shifts the burden of proof onto the accused, contravening the fundamental presumption of innocence.

Twin Conditions for Bail Under PMLA:

• Section 45: It states that notwithstanding anything contained in the Code of Criminal Procedure no person accused of an offence under this Act shall be released on bail or on his own bond unless:
  • The Public Prosecutor has been given a opportunity to oppose the application for such release.
  • 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, 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.
  • 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
    • the Director; or
    • any officer of the Central Government or a State Government authorised in writing in this behalf by the Central Government by a general or special order made in this behalf by that Government.

What is Bail?

About:

• Bail is the conditional/provisional release of a person held under legal custody (in matters which are yet to be pronounced by the Court), by undertaking a promise to appear in the Court as and when required. It signifies a security/collateral deposited before the Court for release.
• Bail, a legal provision within the Bharatiya Nagarik Suraksha Sanhita facilitates release from prison pending trial or appeal upon depositing security.

Types of Bail in India:

• Regular Bail: It is a direction given by the Court (any Court within the country) to release a person who is already under arrest and kept in police custody.
• Interim Bail: Bail granted for a temporary and short period by the Court till the application seeking Anticipatory Bail or Regular Bail is pending before a Court.
• Anticipatory Bail or Pre-arrest Bail: It is a legal provision that allows an accused person to apply for bail before being arrested. In India, pre-arrest bail is granted under section 438 of the CrPC It is issued only by the Sessions Court and High Court.
• The provision of pre-arrest bail is discretionary, and the court may grant bail after considering the nature and gravity of the offence, the antecedents of the accused, and other relevant factors. The court may also impose certain conditions while granting bail, such as surrendering the passport, refraining from leaving the country, or reporting to the police station regularly.

Why Jail is an Exception?

• Detaining an individual without any reason is a violation of his fundamental right to liberty.
• A person can be detained in the pre-trial stage for the purpose of investigation and if there is a reasonable apprehension to do so.
• Encroachment of fundamental rights of an individual is punitive and is against the principle of natural justice.
• It is the duty of the courts to ensure that an individual is not detained unless it is against the interest of justice.

What are the Landmark Judgements based on Bail is Rule and Jail is an Exception?

• Supt. and Remembrancer of Legal Affairs v. Amiya Kumar Roy Choudhry (1973):
  • In this case, the Calcutta High Court explained the principle behind giving Bail.
• State of Rajasthan v. Balchand (1977):
  • Justice Krishna Iyer famously stated, "The basic rule may perhaps be tersely put as bail, not jail."
  • This underscored the presumption of innocence and the right to liberty of an accused person.
• Gurbaksh Singh Sibbia v. State of Punjab (1980):
  • This case dealt with anticipatory bail but emphasized the presumption of innocence.
  • The Court held that the right to bail is directly linked to Article 21 of the Constitution.
• Siddharam Satlingappa Mhetre v. State of Maharashtra (2011):
  • The Court reiterated that bail is the rule and jail is the exception.
  • It emphasized the need to balance individual liberty with societal interests while considering bail applications.
• State of Kerala v. Raneef (2011):
  • The Supreme Court held that bail should be granted where the accused can show that there are reasonable grounds to believe that he is not guilty of the offence.
• Sanjay Chandra v. CBI (2012):
  • The Court held that the object of bail is neither punitive nor preventative.
  • It emphasized that denying bail as a punitive measure would be contrary to the concept of presumption of innocence.
• NIA v. Zahoor Ahmad Shah Watali (2019):
  • This case set a precedent whereby courts are constrained from critically examining the prosecution's evidence during bail proceedings under the UAPA.
  • The Supreme Court said that “At the stage of considering the prayer for bail, it is not necessary to weigh the material, but only form opinion on the basis of the material before it on broad probabilities”.
• Vernon v. State of Maharashtra and Anr. (2023):
  • This case introduced a nuanced approach, emphasizing the need for a surface-level analysis of evidence before determining bail eligibility.
  • The Supreme Court held that, “It would not satisfy the prima facie “test” unless there is at least surface analysis of probative value of the evidence, at the stage of examining the question of granting bail and the quality or probative value satisfies the Court of its worth”.