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The twin conditions specified in Section 45 (1) of PMLA and the general principles of Section 439 of CrPc have to be considered while granting bail: High Court of Kerala

The High Court of Kerala, through learned judge, Justice Kauser Edappagath, while considering a bail application in the case Abdul Gafoor @ Kunhumon v. Asst. Director, Directorate of Enforcement & Ors. (BAIL APPL. NO. 2840 OF 2022), ruled that the twin conditions specified in Section 45 (1) of PMLA and the general principles of Section 439 of CrPc have to be considered while granting bail.

BRIEF FACTS OF THE CASE:  The petitioner, Abdul Gafoor, was accused of being involved in an investment scam that defrauded people of a sum of about Rs.1200 crore. The petitioner was arrested in March 2022 and remanded to judicial custody. The petitioner was alleged to have received funds from various investors, which was later on utilised to facilitate the layering of the proceeds of the crime. He was charged with offences punishable under Sections 3 and 4 of PMLA. In April 2022, the bail application filed by the petitioner before the Special Court was dismissed and thereby, the petitioner approached the High Court for grant of bail. The learned Senior Counsel for the petitioner submitted that the petitioner was innocent and that he was falsely implicated in the case. Counsel for the petitioner further  submitted that the twin conditions of Section 45 (1) of PMLA were struck down and declared unconstitutional by the Apex Court in Nikesh Tarachand Shah v. Union of India and Another (AIR 2017 SC 5500). Hence, the embargo under Section 45 would not apply to the case. The learned counsel of the respondents argued that by the amendment of Section 45(1) of the Act by insertion the words, “under this Act”, the judgement delivered by the Apex Court in Nikesh Shah (supra) had virtually become ineffective and therefore, the prayer for bail of the petitioner had to be considered in view of the amended provisions of Section 45(1) of the PMLA.

JUDGEMENT: The court remarked that the 2018 amendment was introduced after taking note of the decision in Nikesh Shah (supra). The lacuna that the apex court found, was  cured by way of amendment. Thus, twin conditions for bail declared unconstitutional by the Apex Court in Nikesh Shah (supra) stood restored by Amendment in 2018. The court observed that “the twin conditions as amended in Section 45(1) in 2018 have now become referrable and reliable to the offences punishable under PMLA and an accused charged with an offence under the Act still has to satisfy the rigours of those conditions notwithstanding the judgement of the Apex Court in Nikesh Shah (supra).” On careful analysis of the materials placed on record, the factual discussions made, and the legal submissions advanced,  the court found that there were no reasonable grounds to believe that the petitioner was not guilty of the offences alleged. The court dismissed the petition by upholding that conditions of bail enumerated in Section 45 of the PMLA will have to be complied with even in respect of an application for bail made under Section 439 of Cr.P.C.

JUDGEMENT REVIEWED BY – AMRUTHA K

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