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Nikesh Tarachand Shah vs Union of India

Nikesh Tarachand Shah vs Union of India

The current writ petitions and appeals address the constitutional validity of Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA). Section 45(1) establishes two conditions for the grant of bail in cases involving offenses punishable by imprisonment exceeding three years under Part A of the Act’s Schedule. These conditions stipulate that the Public Prosecutor must be afforded an opportunity to contest any bail application and that the Court, if faced with opposition from the Public Prosecutor, must be convinced that there are reasonable grounds to believe that the accused is innocent of the offense and unlikely to commit further offenses while on bail.

The twin conditions outlined in Section 45(1) of the Prevention of Money Laundering Act, 2002 (PMLA) state that an arrested individual shall be granted bail or released on their own bond unless the court is satisfied with the following two conditions:

  1. The Public Prosecutor must be given an opportunity to oppose any application for release on bail.
  2. If the Public Prosecutor opposes the application, the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offense and is not likely to commit any offense while on bail.

In the current writ petition (Nikesh Tarachand Shah vs Union of India), the Supreme Court has declared the aforementioned twin conditions unconstitutional, citing violations of Article 14 and 21 of the Constitution of India. The supreme court has held that:

Regard being had to the above, we declare Section 45(1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions for release on bail, to be unconstitutional as it violates Articles 14 and 21 of the Constitution of India. All the matters before us in which bail has been denied, because of the presence of the twin conditions contained in Section 45, will now go back to the respective Courts which denied bail. All such orders are set aside, and the cases remanded to the respective Courts to be heard on merits, without application of the twin conditions contained in Section 45 of the 2002 Act. Considering that persons are languishing in jail and that personal liberty is involved, all these matters are to be taken up at the earliest by the respective Courts for fresh decision. The writ petitions and the appeals are disposed of accordingly.

Citation: AIR 2017 SC 5500

Shivendra Pratap Singh

Advocate

High Court Lucknow

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