• The Supreme Court has clarified that sickness and infirmity are valid grounds for granting bail, even in cases under the stringent Prevention of Money Laundering Act (PMLA). 

• The PMLA, under Section 45, has strict conditions for bail. 

• Typically, the accused must demonstrate that they are not guilty and will not re-offend while on bail. 

• These conditions make bail exceptionally difficult to secure in PMLA cases. 

• However, the proviso to Section 45(1) provides the court with discretion to exempt certain groups from these conditions: 

i) Individuals below 16 years of age. 

ii) Women, and those who are sick or infirm.

• This humane exemption allows bail when a Special Court deems it appropriate.

Prevention of Money Laundering Act (PMLA)

• Prevention of Money Laundering Act (PMLA) was enacted on January 17, 2003 and brought into force on July 1, 2005. 

• The Act aims to prevent money laundering and to provide for confiscation of property derived from, or involved in, money laundering and for matters connected therewith or incidental thereto. 

Two main objectives of the Act are:

i) Criminalise money laundering and provide for attachment, seizure and confiscation of property involved in money laundering.

ii) Prescribe obligations on banks, financial institutions and intermediaries relating to KYC, record keeping and furnishing reports.

• PMLA was amended in 2005, 2009, 2012, 2015, 2016, 2018 and 2019 to overcome the deficiencies and to meet the international standards on Anti-Money Laundering as prescribed by Financial Action Task Force (FATF).

• Section 3 of the PMLA criminalises the offence of money laundering related to a wide range of criminal offences listed in the schedule to the PMLA.

• These offences include participation in an organised criminal group and racketeering, terrorism and terrorist financing, illicit trafficking in narcotics drugs and psychotropic substances, illegal human trafficking, illicit arms trafficking, illicit trafficking in stolen goods, corruption and bribery, fraud, counterfeiting and piracy of products, environmental crimes, kidnapping, robbery, smuggling, extortion, forgery, piracy and insider trading and market manipulation. 

• These offences listed in the schedule are called “predicate offences” and section 3 of the PMLA states that whoever is directly or indirectly involved or associated with any process or activity connected with “proceeds of crime” related to these criminal activity will be guilty of the offence of money laundering and is liable for punishment with rigorous imprisonment of three to 10 years under section 4 of the PMLA.

• The scope of section 3 has been widened over the years following a risk based approach to ensure that each and every kind of money laundering offence is covered under the provision and the “proceeds of crime” are not enjoyed with any person who could in any way be connected to the underlying criminal activity.

(The author is a trainer for Civil Services aspirants.)