LexNIKESH TARACHAND SHAH versus UNION OF INDIA & ANR.
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, A B c D [2017] I~ S.C.R. 358 NIKESH TARACHAND SHAH v. UNION OF INDIA & ANR. (Writ Petition (Criminal) No. 67 of 2017 Etc.) NOVEMBER 23, 2017 [R. F. NARIMAN AND SAN.JAY KISHAN KAUL, JJ.] Prevention of Money Laundering Act, 2002 - s.45( I) Constitutional validity _of- Grant of bail u/s. 45( 1) - Twin conditions to be satisfied u/s. 45 that there are reasonable grounds for believing that the accused is not guilty of such offence and that he is not likely to commit any offence while on bail - For purpose of grant of bail u/s. 45( I), offence relatable to offences punishable for a term of imprisonment of more than 3 years under Part A of the Schedule to the Act and not in relation to offences under the 2002 Act itself - Held: Section 45 (I) is unconstitutional as it imposes two further conditions for release on bail, thus, violative of Arts. 14 and 21 - Expression "such offence" would be relatab/e only to an offence in Part A of the Schedule - In an application made for bail, where the offence of money laundering is involved, ifs. 45 is to be E applied, the Court must be satisfied that there are reasonable grounds for believing that he is not guilty of the offence under Part A of the Schedule, which is not the offence of money laundering, but which is a completely different offence - Thus, the twin conditions laid down in s. 45 would have no nexus whatsoever with a bail F G H application which concerns itself with the offence of money laundering - Further, the term of imprisonment of more than 3 years for a scheduled or predicate offence would be a mcmifestly arbitrary and unjust classification, having no rational relation to the object sought to be achieved by an Act dealing with money laundering - This would lead to a manifestly arbitrary, discriminatory and unjust result which would invalidate the Section - Constitution of India - Arts. 14 and 21. Disposing of the writ petitions and the appeals, the Court HELD: 1. Section 45(1) of the Prevention of Money Laundering Act, 2002, insofar as it imposes two further conditions 358 NlKESH TARACHAND SHAH v. UNION OF INDIA & ANR. for release on bail, is declared to be unconstitutional as it violates Articles 14 and 21 of the Constitution. [Para 45] [412-F-H] 2.1 When the Prevention of Money Laundering Bill, 1999 was tabled before Parliament, Section 44, which corresponds to Section 45 of the present Act, provided that several offences punishable under "this Act" are to be cognizable, and the twin conditions for release on bail would apply only insofar as the offences under the Act itself are concerned. When the Act was finally enacted in 2002 and notified in 2005, this scheme changed radically. Now, both the offence of money laundering and the predicate offence were to be tried by the Special Court, and bail is granted only if the twin conditions under Section 45(1) are met, where the term of imprisonment is more than three years for the predicate offence. It is important to note that Clause 44 of the Bill refened only to offences under Sections 3 and 4 of the Bill, whereas Section 45 of the Act does not refer to offences under Sections 3 and 4 of the Act at all. Reference is made only to offences under Part A of the Schedule, which are offences outside the 2002 Act. [Para 9] [382-G-H; 383-A-C] 2.2 Section 44 of the Prevention of Money Laundering Bill referred only to offences punishable under the Act itself, in which the twin conditions for grant of bail were imposed, in addition to limitations for such grant under the Code of Criminal Procedure. Somehow, this provision did not translate itself into dealing with offences under the 2002 Act, but became Section 45 of the 2002 Act, which was brought into force in 2005. The change made by Section 45 is that, for the purpose of grant of bail, what was now to be looked at was offences that were punishable for a term of imprisonment of three years or more under Part A of the Schedule, and not offences under the 2002 Act itself. At this stage, Part A of the Schedule contained two paragraphs-Para 1 containing Sections 121 and 121A of the Penal Code, which deal with waging or attempting to wage war or abetting waging of war against the Governme11t of India, and conspiracy to commit such offences. Paragraph 2 dealt with offences under the Narcotic Drugs and Psychotropic Substances Act, 1985. Part B of the Schedule, as originally enacted, referred to certain
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