ANATOMY OF PMLA 2002 IN CONTEXT OF ANTICIPATORY BAIL

Vijay Madanlal has laid down that the principles governing the condition of bail in Section 437 & 439 CrPC are more or less applicable to the conditions of bail under section 438 CrPC 1973, which is contrary to the law laid down in Sibbia

"I always speak the truth. Not the whole truth, because there's no way, to say it all. Saying it all is literally impossible: words fail. Yet it's through this very impossibility that the truth holds onto the real."

-TELEVISION WRITTEN BY JACQUES LACAN

"Bail is the rule and jail is exception", is the law which is to be exercised in rarest of the rare cases is becoming the Post-modern interpretation of law and a precedent of our great nation. Now "presumption of innocence is the privilege of every accused," is no more a good law in this Post-Modern Era. "Without prejudice", I shall attempt to deconstruct the law laid down by Supreme Court on Pre Bail arrest in VIJAY MADANLAL CHOUDHARY & ORS. VS UOI & ORS (hereinafter referred VIJAY MADANLAL) in view of previous precedents passed by Hon'ble Supreme Court and further shall attempt the impossible, not to fall into the problem of Lacanian interpretation of Language which he has beautifully describe in aforesaid sentences.

To understand the background of Pre-Arrest Bail in nutshell; in the Code of Criminal Procedure 1898, the provision of the Pre-Bail arrest or anticipatory Bail was not provided. Subsequently the idea of anticipatory bail was 1st recommended to Parliament by the 41st Law Commission Report 1969, & subsequently was included in Chapter 33 of the present Criminal Procedure Code, 1973 under section 438 CrPC.

The recommendation of the 41st Law Commissions report are stated herein below;

""39.9. Anticipatory Bail:- ……………The necessity for granting anticipatory bail arises mainly because sometimes influential persons try to implicate their rivals in false causes for the purpose of disgracing them or for other purposes by getting them detained in jail for some days. In recent times, with the accentuation of political rivalry, this tendency is showing signs of steady increase. Apart from false cases, where there are reasonable grounds for holding that a person accused of an offence is not likely to abscond, or otherwise misuse his liberty while on bail, there seems no justification to require him first to submit to custody, remain in prison for some days and then apply for bail. We recommend the acceptance of this suggestion. We are further of the view that this special power should be conferred only on High Court and the Court of Session, and that the order should take effect at the time of arrest or thereafter

We considered carefully the question of laying down in the statute certain conditions under which alone anticipatory bail could be granted. But we found that it may not be practicable to exhaustively enumerate those conditions; and moreover, the laying down of such conditions may be construed as pre-judging (partially at any rate) the whole case. Hence, we would leave it to the discretion of the court and prefer not to fetter such discretion in the statutory provision itself. Superior Courts will, undoubtedly, exercise their discretion properly, and not make any observations in the order granting anticipatory bail which will have a tendency to prejudice the fair trial of the accused." (pp 320-321).

The aforesaid recommendations were considered by the Hon'ble Supreme Court in Gurbaksh Singh Sibbia Etc vs State Of Punjab (Constitution Bench Judgement) reported in 1980 AIR 1632, 1980 SCR (3) 383 (hereinafter shall be referred as SIBBIA) while deciding the law on Section 438 Code of 1973. The law laid down in VIJAY MADANLAL overlooked the Constitution bench judgement on following aspects.

➤ The Constitution Bench held in the following terms;

"10. ………………The validity of that section must accordingly be examined by the test of fairness and reasonableness which is implicit in Article 21. If the legislature itself were to impose an unreasonable restriction on the grant of anticipatory bail, such a restriction could have been struck down as being violative of Article 21. Therefore, while determining the scope of Section 438, the court should not impose any unfair or unreasonable limitation on the individual's right to obtain an order of anticipatory bail. Imposition of an unfair or unreasonable limitation, according to the learned counsel, would be violative of Article 21, irrespective of whether it is imposed by legislation or by judicial decision.

26. We find a great deal of substance in Mr. Tarkunde's submission that since denial of bail amounts to deprivation of personal liberty, the Court should lean against the imposition of unnecessary restrictions on the scope of Section 438, especially when no such restrictions have been imposed by the legislature in the terms of that section. ……………………………………………………………………………..

• RATIO OF SIBBIA ON ECONOMIC OFFENCES. While deciding the law on Anticipatory bail in serious cases of economic offence, Supreme Court in Sibbia has set aside the 7th proposition of Punjab & Haryana High Court which is stated herein below;

"16. A close look at some of the rules in the eight-point code formulated by the High Court will show how difficult it is to apply them in practice. The seventh proposition says :

"The larger interest of the public and State demand that in serious cases like economic offences involving blatant corruption at the higher rungs of the executive and political power, the discretion under Section 438 of the Code should not be exercised."

17. How can the Court, even if it had a third eye, assess the blatantness of corruption at the stage of anticipatory bail ? And will it be correct to say that blatantness of the accusation will suffice for rejecting bail, even if the applicant's conduct is painted in colours too lurid to be true? The eighth proposition rule framed by the High Court says :……………….."

ANALYSIS

• SIBBIA set aside the law laid down by the Punjab & Haryana High Court specifically the seventh proposition, The Hon'ble Supreme Court disagreed with the view taken by the High Court that in economic offence anticipatory bail cannot be granted as economic offence being a class apart.

• SIBBIA has further held that Section 438 CrPC shall not be governed by any conditions laid down in section 437 & 439 CrPC. A pure discretion is granted to the competent court to grant or reject anticipatory bail under its own conditions specified in section 438 CrPC.

➤ It shall not be out of place to mention that Supreme Court in Nikesh Tarachand Shah while dealing with grant of anticipatory bail in PMLA 2002 has considered and discussed SIBBIA and further while relying upon Para 28-30 of SIBBIA has reached the conclusion which is stated herein below;

"Another conundrum that arises is that, unlike the Terrorist and Disruptive Activities (Prevention) Act, 1987, there is no provision in the 2002 Act which excludes grant of anticipatory bail. Anticipatory bail can be granted in circumstances set out in Siddharam Satlingappa Mhetre v. State of Maharashtra, (2011) 1 SCC 694 (See paragraphs 109, 112 and 117). Thus, anticipatory bail may be granted to a person who is prosecuted for the offence of money laundering together with an offence under Part A of the Schedule, which may last throughout the trial. Obviously for grant of such bail, Section 45 does not need to be satisfied, as only a person arrested under Section 19 of the Act can only be released on bail after satisfying the conditions of Section 45. But insofar as pre-arrest bail is concerned, Section 45 does not apply on its own terms. This, again, would lead to an extremely anomalous situation. If pre- arrest bail is granted to Mr. X, which enures throughout the trial, for an offence under Part A of the Schedule and Section 4 of the 2002 Act, such person will be out on bail without his having satisfied the twin conditions of Section 45. However, if in an identical situation, Mr. Y is prosecuted for the same offences, but happens to be arrested, and then applies for bail, the twin conditions of Section 45 will have first to be met. This again leads to an extremely anomalous situation showing that Section 45 leads to manifestly arbitrary and unjust results and would, therefore, violate Articles 14 and 21 of the Constitution.

• Nikesh Tarachand while considering SIBBIA (Para 28 to 30 of SIBBIA) while deciding the effect upon Section 438 CrPC in view of Section 45 PMLA & its Non-Substantive Clause, has rightly come to the conclusion that unlike TADA 1987 there is no bar in PMLA 2002, wherein grant of anticipatory bail is excluded or barred. Therefore, VIJAY MADANLAL CHAUDHARY has overlooked the aspect of Nikesh Tarachand and further overlooked SIBBIA.

PARAGRAPH WISE DECONSTRUCTION of VIJAY MADANLAL

137…..It is also true that Section 45 does not make specific reference to Section 438 of the 1973 Code, but it cannot be overlooked that sub-section (1) opens with non-obstante clearly provides that anything contained in the 1973 Code (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond, unless the stipulations provided therein are fulfilled. On account of the non-obstante clause in Section 45(1) of the 2002 Act, the sweep of that provision must prevail in terms of Section 71 of the 2002 Act.

ANALYSIS

➤ It is correct that the special law shall prevail over ordinary law, keeping in view section 71 of PMLA as well as non-substantive clause of Section 45 of PMLA but this rule of "harmonious interpretation" shall only apply in case wherein there is conflict between ordinary law & special law.

➤ Admittedly Section 437 & 439 of Code of 1973 are in conflict with section 45 of PMLA 2002, therefore the notwithstanding clause shall render a bar over Section 437 & 439 and section 45 PMLA being a Section of special Statue shall prevail over the Regular bail granted under Code of Criminal Procedure 1973.

➤ Non substantiative clause definition according to Black dictionary, is "Non obstante"

"2. A phase used in documents to preclude any interpretation contrary to the stated object or purpose".

➤ The Hon'ble Supreme Court (3-J B) has laid down the law on the purpose and effect of non-substantive clause in the case titled as R.S Ragunath Vs State of Karnataka & Anr Reported in (1992) 1 SCC 335 wherein it has been held, as under;

13. As already noted, there should be a clear inconsistency between the two enactments before giving an overriding effect to the non-obstante clause but when the scope of the provisions of an earlier enactment is clear the same cannot be cut down by resort to non-obstante clause.

In Ajay Kumar Banerjee and others v. Union of India and others, [1984] 3 SCC 127 "As mentioned herein before if the scheme was held to be valid, then the question what is the general law and what is the special law and which law in case of conflict would pre- vail would have arisen and that would have necessitated the application of the principle "Generalia specialibus non derogant". The general rule to be followed in ease of conflict between the two statutes is that the later abrogates the earlier one. In other words, a prior special law would yield to a later general law, if either of the two following conditions is satisfied.

(i) The two are inconsistent with each other.

(ii) (ii) There is some express reference in the later to the earlier enactment.

If either of these two conditions is fulfilled, the later law, even though general, would prevail".

ANALYSIS

➤ Now let us apply the test laid down by the Supreme Court in the case of R.S Ragunath (Supra) in the present issue. The word used in Section 45 of PMLA 2002 is (…..shall be released on bail….) which can be easily found in section 439 of Code of 1973, wherein similar expression is provided i.e. "be released on bail". In section 437 of Code of 1973 the expression used is "may be released on bail". Therefore, there is a conflict apparent between Section 45 of PMLA 2002 and Section 437 & 439 of CrPC. Therefore, applying the principal and test of R.S Ragunath (Supra) the PMLA 2002 being a special Act shall prevail over the ordinary act (Code of Criminal Procedure 1973). And further conditions laid down in the special Act (Section 45 PMLA) shall govern bail conditions under PMLA.

➤ Going further, the expression used in first paragraph of section 45 of PMLA 2002, Section 437 to 439 are stated herein below;

45. Offences to be cognizable and non-bailable. —

(1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence punishable for a term of imprisonment of more than three years under Part A of the Schedule shall be released on bail or on his own bond unless—]

437. When bail may be taken in case of non-bailable offence. —(1) When any person accused of, or suspected of, the commission of any non-bailable offence is arrested or detained without warrant by an officer in charge of a police station or appears or is brought before a Court other than the High Court or Court of session, he may be released on bail, but—

438. Direction for grant of bail to person apprehending arrest. —(1) When any person has reason to believe that he may be arrested on an accusation of having committed a non-bailable offence, he may apply to the High Court or the Court of Session for a direction under this section; and that Court may, if it thinks fit, direct that in the event of such arrest, he shall be released on bail.

439. Special powers of High Court or Court of Session regarding bail.—(1) A High Court or Court of Session may direct,—

ANALYSIS

➤ Coming to the core issue, as stated in above Section 438 CrpC 1973, the expression used by the legislation is "Direction for grant of bail to person apprehending arrest". This expression used in General Provision is excluded in Section 45 of PMLA 2002. Therefore, there is no conflict between section 45 PMLA & Section 438 CrPC1973. Thus, both the sections of respective Acts shall operate independent of each other. Therefore, the non-substantive clause of Section 45 is not applicable to section 438 of CrPC 1973. And therefore, Judgement of Vijay Madan Lal has rendered a finding without appreciating the above principal.

➤ Section 438 CrPC is a specific provision relating to grant of bail in apprehending arrest, defined and descriptable subject therefore it shall be regarded as an exception to and would operate independently of Specific provision relating to grant of bail in PMLA 2002 proceedings.

PARAGRAPH 137 II OF VIJAY MADLAL

"Thus, anticipatory bail is nothing but a bail granted in anticipation of arrest, hence, it has been held in various judgments by this Court that the principles governing the grant of bail in both cases are more or less on the same footing, except that in case of anticipatory bail the investigation is still underway requiring the presence of the accused before investigation authority. Thus, ordinarily, anticipatory bail is granted in exceptional cases where the accused has been falsely implicated in an offence with a view to harass and humiliate him. Therefore, it would not be logical to disregard the limitations imposed on granting bail under Section 45 of the 2002 Act, in the case of anticipatory bail as well.

➤ Further Sibbia has specifically held that while deciding the anticipatory bail under section 438 of CrPC the Section shall not be governed by the Conditions imposed by the sister sections (437 & 439 of CrPC) which is stated herein below;

18……If it was intended that the exception contained in Section 437(1) should govern the grant of relief under Section 438(1), nothing would have been easier for the legislature than to introduce into the latter section a similar provision.

18……If at all the conditions mentioned in Section 437 are to be read into the provisions of Section 438, the transplantation shall have to be done without amputation. That is to say, on the reasoning of the High Court, Section 438(1) shall have to be read as containing the clause that the applicant "shall not" be released on bail "if there appear reasonable grounds for believing that he has been guilty of an offence punishable with death or imprisonment for life". In this process one shall have overlooked that whereas, the power under Section 438(1) can be exercised if the High Court or the Court of Session "thinks fits to do so, Section 437(1) does not confer the power to grant bail in the same wide terms. The expression "if it thinks fit", which occurs in Section 438(1) in relation to the power of the High Court or the Court of Session, is conspicuously absent in Section 437(1). We see no valid reason for re-writing Section 438 with a view, not to expanding the scope and ambit of the discretion conferred on the High Court and the Court of Session but, for the purpose of limiting it.

ANALYSIS

• Thus, the ratio laid down in Constitution Bench Judgment have been overlooked in VIJAY MADANLAL. VIJAY MADAN LAL has laid down that the principles governing the condition of bail in Section 437 & 439 CrPC are more or less applicable to the conditions of bail under section 438 CrPC 1973, which is contrary to law laid down in SIBBIA as mentioned above. The SIBBIA while discussing bail conditions of section 437 and 438 CrPC further observes that, if that would have been the case then the legislative would not have introduced section 438 and would have added a provision into section 437 CrPC 1973. The expression "if it thinks fit" in Section 438 is absent in section 437 & 439. The Constitutional Bench has made a clear distinction between the bail conditions in Section 437 & 438 of CRPC.

PARAGRAPH 138 & 139 OF VIJAY MADLAL

In P. Chidambaram, this Court observed that the power of anticipatory bail should be sparingly exercised in economic offences and held thus:…………………………..

Thus, it is totally misconceived that the rigors of Section 45 of the 2002 Act will not apply in the case of anticipatory bail.

ANALYSIS

➤ The Case of P. Chidambaram the Supreme Court overlooked the principal of SIBBIA (including on economic offences) & further few relied upon judgements in P. Chidambaram have been previously overruled by Siddharam Satlingappa Mhetre at para 124 & 125.

➤ The previous Judgement of Supreme Court titled as Directorate of Enforcement v. Ashok Kumar Jain has been relied upon in the case of P. Chidambaram. Ashok Kumar, has not even mentioned SIBBIA while deciding the law on 438 CrPC.

➤ C.B.I. vs. Anil Sharma relied upon judgement in P. Chidambaram has again refrain to even mention SIBBA while deciding grant of bail under 438 CrPC in Economic Offences.

➤ Further VIJAY MADANLAL & P CHIDAMBARAM have not noticed the law laid down by SIBBIA on the issue of grant of anticipatory bail in economic offences.

PARAGRAPH 141 OF VIJAY MADLAL

………..The relief of bail, be it in the nature of regular bail or anticipatory bail, is circumscribed by the stipulations predicated in Section 45 of the 2002 Act. The underlying principles of Section 45 of the 2002 Act would get triggered in either case before the relief of bail in connection with the offence of money-laundering is taken forward.

ANALYSIS

➤ The ratio laid down by VIJAY MADNLAL CHAUDHARY on grant of pre arrest bail are without appreciating the Law laid down on interpretation of Non substantive clause and without appreciating the ratio of SIBBIA on economic offences.

➤ VIJAY MADNLAL CHAUDHARY further relied upon P. CHIDAMBRAM, wherein over ruled judgements have been relied upon and P. CHIDAMBRAM has overlooked SIBBIA.

➤ VIJAY MADNLAL CHAUDHARY further overlooked the ratio laid down in Nikesh Tarachand which appreciate and applied the law laid down in SIBBIA.

CONCLUSION REACHED IN VIJAY MADANLAL HAS NOT CONSIDERED AND APPRECIATED THE FOLLOWING;

➤ The 41st Law commission Report Of 1969, wherein the intention to introduce Section 438 CrPC was that there is no justification to require accused first to custody, remain in prison for some days and then apply for bail and bail conditions in Anticipatory bail shall not be governed by section 437 & 439 CrPC.

➤ SIBBIA ratio laid down by the Constitution Bench on the issue of economic offences has not been appreciated by VIJAY MADANLAL. In-fact Nikesh Tarachand while deciding the applicability of anticipatory bail in PMLA, has rightly considered and discussed SIBBIA and correctly came to the conclusion that Section 438 is independent of section 45 of PMLA, wherein specifically there is no bar in PMLA 2002 unlike in TADA 1987.

➤ P CHIDAMBARAM has relied upon few overruled judgements and has overlooked SIBBIA, therefore on the issue of grant of anticipatory bail in economic offence VIJAY MADANLAL while relying upon P CHIDAMBARAM has laid down law contrary to SIBBIA.

➤ The test laid down by R.S Ragunath, to interpret and apply Non-Substantive Clause has not been considered, referred or even applied by the VIJAY MADANLAL.

In the present facts and circumstances, it only reminds me of F. Nietzsche, wherein he says "We do not believe that the truth remains true once the veil has been lifted"