Bail jurisprudence in India has evolved over the years under the backdrop of economic offences and the challenge that the courts often face, is to strike a fine balance between the rights of the accused on one hand and the rights of the victims on the other. While the parameters that drive grant of bail have largely centered around the theme of ‘bail not jail’ yet the category of cases which involve economic loss to the exchequer have given rise to a bail jurisprudence which now stands enlarged by factors such as, ability of the accused to tamper with evidence, the accused being a flight risk or the risk that the accused if enlarged on bail will influence witnesses and gravity of the offence among others. Then there are other factors, which touch the merit of the case, though the courts have time and again held that at the time of adjudication of bail, merits ought not to be gone into. Some other dynamics like period undergone given the fact that charge sheet has been filed and investigation is complete are also to be considered. 

The Constitution Bench decision of the Apex court in Gurbaksh Singh Sibbia vs. State of Punjab, (1980) 2 SCC 565, holds the fort when it comes to issues that govern grant of bail. The said decision while examining several older decisions held:

“It is, however, interesting that as long back as in 1924 it was held by the High Court of Calcutta in Nagendra v. King Emperor that the object of bail is to secure the attendance of the accused at the trial, that the proper test to be applied in the solution of the question whether bail should be granted or refused is whether it is probable that the party will appear to take his trial and that it is indisputable that bail is not to be withheld as a punishment. In two other cases which, significantly, are the ‘Meerut Conspiracy cases’ observations are to be found regarding the right to bail which observe a special mention. In K. N. Joglekar v. Emperor it was observed, while dealing with Section 498 which corresponds to the present Section 439 of the Code, that it conferred upon the Sessions Judge or the High Court wide powers to grant bail which were not handicapped by the restrictions in the preceding Section 497 which corresponds to the present Section 437. It was observed by the Court that there was no hard and fast rule and no inflexible principle governing the exercise of the discretion conferred by Section 498 and that the only principle which was established was that the discretion should be exercised judiciously. In Emperor v. H. L. Hutchinson it was said that it was very unwise to make an attempt to lay down any particular rules which will bind the High Court, having regard to the fact that the legislature itself left the discretion of the Court unfettered. According to the High Court, the variety of cases that may arise from time to time cannot be safely classified and it is dangerous to make an attempt to classify the cases and to say that in particular classes a bail may be granted but not in other classes. It was observed that the principle to be deduced from the various sections in the Criminal Procedure Code was that grant of bail is the rule and refusal is the exception. An accused person who enjoys freedom is in a much better position to look after his case and to properly defend himself than if he were in custody. As a presumably innocent person he is therefore entitled to freedom and every opportunity to look after his own case. A presumably innocent person must have his freedom to enable him to establish his innocence.”

The crucial question as to whether bail can be declined merely because the investigating agency is in possession of prima facie evidence to substantiate the accusations, was answered in the negative in Gurbaksh Singh Sibbia’s case in the backdrop of the 41st report of the Law Commission of India, which became the vehicle for introduction of Section 438 into the Code of Criminal Procedure. 

Similarly in ‘Bhagirathsinh Jadeja Versus State of Gujarat’ (1984) 1 SCC 284, it was specifically held that bail is not to be denied by way of punishment even when a prima facie case is made out against the accused. 

While economic offences have been treated as serious offences by the Hon’ble Courts and loss to the exchequer has also been treated as one of the relevant considerations, it was specifically held that in cases of economic offences of huge magnitude, after completion of investigation, bail ought not to be refused as the same would amount to imprisonment before conviction and being a substantial punitive content. [Sanjay Chandra vs. CBI (2012) 1 SCC 40]

‘Heinous’, ‘Grave’ or ‘Serious’ offences are not defined in the Code and it was reiterated in ‘Siddharam Satlingappa Mhetre versus State of Maharashtra and Others‘ (2011) 1 SCC 694, by the Hon’ble Apex Court that arrest should be the last option and must be restricted to those exceptional cases where arresting an accused is imperative in the facts and circumstances of the case. The said observation would apply with equal force in the matter of detention after presentation of the charge sheet. The following words of the said judgment provide a valuable guideline: –

“116. Personal liberty is a very precious fundamental right and it should be curtailed only when it becomes imperative according to the peculiar facts and circumstances of the case.”

The relevance of severity of punishment in determining the gravity or seriousness of the offence has already been determined as a crucial circumstance. It is apposite to mention at this stage that the Code of Criminal Procedure has been radically amended following the ratio of landmark judgments of the Court having bearing on the question of arrest and amended Section 41 was introduced in the Code of Criminal Procedure in the year 2010 following the recommendation of the Law Commission of India in its 177th Report published in the year 2001. 

It is patently clear from a reading of the provision that strict safeguards have been provided to regulate the power of arrest in cases punishable up to seven years. The question of arrest has also been linked to necessity, relevance to proper investigation, relevance to securing the presence and conduct of the accused in fleeing from justice or tampering with evidence. 

In ‘Arnesh Kumar Versus State of Bihar and Another’ [(2014) 8 SCC 273)], the Hon’ble Apex Court lucidly and authoritatively interpreted the scope of the amended Section 41 of Code of Criminal Procedure and laid down specific guidelines to ensure due implementation of the legislative intent. Their Lordships were pleased to hold that the provisions of Section 41 CrPC which authorizes the police officer to arrest an accused without an order from a Magistrate and without a warrant, were scrupulously enforced. 

The Delhi High Court examined a case where the accused was not arrested during investigation and the CBI had filed the charge sheet without arrest in ‘Court On Its Own Motion versus Central Bureau of Investigation’ [109 (2003) Delhi Law Times 494)]. In that case the Ld. Special Judge with jurisdiction, had refused to accept the charge sheet and directed the investigating agency to arrest the accused. However, the Hon’ble High Court formally rejected the notion that a final report or charge sheet cannot be filed without arresting the accused charged with the commission of a non-bailable offence. Additionally, the Court issued strict directions to be followed by criminal courts in such cases, inter-alia, directing the trial courts to issue process of summons only and further to admit the accused to bail. 

The principles and guidelines enunciated in Court on its own motion were further reiterated by a later Single Bench decision of the Delhi High Court in ‘Tejinder Singh versus Central Bureau of Investigation’ [(2014) 145 DRJ 162)].

BAIL JURISRUDENCE UNDER PREVENTION OF MONEY LAUNDERING ACT (PMLA)

The provisions regarding bail are contained in Section 45 of PMLA. The two conditions provided under the said Act are as under: – 

  1. The Public Prosecutor has been given an opportunity to oppose the application for such release; and
  2. 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.

The relevant date pertinent to this discussion would be the law as it existed before 27.11.2017 and the law which was amended post judgment delivered by the Hon’ble Supreme Court in the case of Nikesh Tarachand Shah Vs. Union of India (2018) 11 SCC 1 on 27.11.2017.  The Hon’ble Court vide the judgment, struck down Section 45 (1) of PMLA insofar as it imposes these two conditions for release on bail, for offences punishable for a term of more than three years under Part-A of the Schedule of PMLA. The twin conditions were held to be unconstitutional as they were in patent violation of the fundamental rights. 

That pursuant to the Nikesh Tarachand judgment, Section 45 (1) of PMLA was amended w.e.f. 19.04.2018. The words ‘under this Act’ to sub-section (1) of Section 45 PMLA have been added and the words ‘punishable for a term of imprisonment of more than three years under Part-A of the Schedule’ have been deleted. The said amendment was believed to have been necessitated, as one of the grounds for striking down the Section by the Hon’ble Supreme Court was that the appropriate Court while deciding the bail application, ought to have reasonable grounds for believing that the accused is not guilty of a Predicate Offence under PMLA. 

The Division Bench of the Punjab and Haryana High Court in Dalip Singh Mann & Anr. Vs. Niranjan Singh, Asst. Director, Directorate of Enforcement, decided on 01.10.2015 in CRM M No.28490 of 2015, dealt with the question of grant of bail in light of the averments made on behalf of the Directorate of Enforcement to the effect that there is a statutory bar against the grant of bail unless there is compliance with Section 45 (1) (ii) of the Act. The Hon’ble High Court while giving cogent reasons granting bail, held, that “that rigors of Section 45 (1) (ii) of the Act would be attracted only while considering the bail plea of an accused who has been arrested by the E.D. under Section 19 of the Act” Similarly in Arun Sharma Vs. Union of India, 2016 SCC OnLine P&H 5954, the Hon’ble High Court while taking into account the position rendered in Dalip Singh Mann’s case held that “the application of Section 45(1) is therefore to be read in the context of section 19 (3) of PMLA in respect of an arrested person brought in custody before Court. Second proviso to section 45 (1) creates a bar on taking cognizance except upon a complaint in writing by an authorized officer. This insertion of further bar by way of a proviso instead of creating a separate independent section, clearly presupposes consideration of application for release on bail or bond under section 45 of only such a person, who is already arrested and is in custody at a stage prior to stage of taking cognizance upon filing of a complaint”. It is further pertinent to mention that the guidelines laid down by the Hon’ble Delhi High Court regarding grant of bail in cases where charge sheet is filed without arrest was also taken into consideration. 

From a reading of the view taken by the High Court of Punjab and Haryana in the cases mentioned hereinabove, it is clear that in matters where complaint has been filed and the Enforcement Directorate has not exercised its power under Section 19 PMLA to arrest during investigation, then the rigors as applicable under Section 45 (1) (pre-amendment) shall not apply. 

The Hon’ble Supreme Court in the case of Nikesh Tarachand Shah Vs. Union of India (2018) 11 SCC 1 struck down Section 45 (1) PMLA insofar as it imposed twin conditions for release on bail for offences punishable for a term of imprisonment of more than three years under Part A of the Schedule of PMLA. The twin conditions were held to be unconstitutional and violative of fundamental rights. 

The decision of the Bombay High Court in Sameer Bhujbal Vs. Asst. Director, Directorate of Enforcement, (Bail Application No. 286/2018 was rendered on 06.06.2018, almost two months after Section 45 (1) of PMLA was amended. The High Court while considering the plea of regular bail to the appellant, was apprised by the Enforcement Directorate that after the amendment to Section 45 (1) of PMLA whereby the words “under this Act” have been inserted w.e.f. 19.04.2018, the purport is to read and treat the section as it existed, with twin conditions, pre-Nikesh Tarachand. The Bombay High Court while examining the said contention of the Directorate of Enforcement noted that “In view of the above, when there is no bar of twin conditions contained in original Section 45 (1) (ii) of the PMLA Act, the present application has to be considered and decided under Section 439 of the Code of Criminal Procedure with or without conditions.’’ Accordingly, the applicant was released on bail post amendment to Section 45. Similar observations have been made by the Madhya Pradesh High Court in Dr. Vinod Bhandari Vs. Asst. Director, Directorate of Enforcement (Cr M.C. No.34201/2018 decided on 29.08.2018), Delhi High Court in Upendra Rai vs Directorate of Enforcement, (Bail Appln. 249/2019; decided on 9 July 2019) and the Allahabad High Court in Radhey Shyam Dubey Vs. Union of India (Bail Application No.2324/2018; decided on 19.07.2018).

The Hon’ble Supreme Court while granting bail under PMLA, in Kiran Prakash Kulkarni v. Enforcement Directorate & Anr. (Crl.A. 1698/2019 decided on 11.4.2019), held that, ‘upon a careful scrutiny of the judgment of the High Court, we find that the law laid down by this Court on the constitutional validity of Section 45(1) of the PMLA Act in Nikesh Tarachand Shah v. Union of India has not been taken into account.’

Most recently, the Hon’ble Supreme Court in P. Chidambaram vs. Directorate of Enforcement (2019 SCC OnLine 1549), further stressed and highlighted that the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing a fair trial. 

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Tarannum Cheema has been working as a lawyer for the past 10 years. She specializes in criminal law and has appeared in several white collar crime cases as defence counsel as well as public prosecutor. She has appeared and continues to appear as a Prosecutor for the CBI as well as the SIT in the 1984 anti-Sikh riot cases.

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