Bail Under the PMLA: Section 45 Twin Conditions and How Courts Apply Them

The offence and the agency

Money laundering is defined in Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) and is investigated by the Directorate of Enforcement (ED). A PMLA case depends on a scheduled offence, a predicate crime such as cheating, forgery or corruption, from which proceeds of crime are said to have been generated. The ED records the case in an Enforcement Case Information Report (ECIR), and the trial is held before a Special Court designated under the Act.

The twin conditions

Under Section 45, a person accused of money laundering is not released on bail unless the Public Prosecutor has had an opportunity to oppose the application and, where the Public Prosecutor opposes it, the court is satisfied:

• that there are reasonable grounds for believing that the accused is not guilty of the offence; and
• that the accused is not likely to commit any offence while on bail.

What the Supreme Court has said

In Vijay Madanlal Choudhary v. Union of India (2022), a three-judge bench upheld these conditions and held that they apply to anticipatory bail as well. The satisfaction required is a view formed on the material at the bail stage, not a finding of innocence. Review petitions against parts of that judgment have been pending before the Supreme Court.

Who is exempt from the twin conditions

The proviso to Section 45(1) allows the Special Court to release on bail, without applying the twin conditions, a person who is:

• under sixteen years of age
• a woman
• sick or infirm
• accused, alone or with co-accused, of laundering a sum of less than one crore rupees

Delay, long custody and Article 21

The twin conditions do not displace the right to a speedy trial. In Manish Sisodia v. Directorate of Enforcement (2024), bail was granted after about seventeen months in custody with the trial not yet begun; the Court repeated that bail is the rule and jail the exception, even under special statutes. In Prem Prakash v. Union of India (2024), the Court applied the same principle to the PMLA. Section 479 BNSS (formerly Section 436A CrPC) also requires an undertrial who has served half the maximum sentence to be considered for release.

Arrest safeguards

Under Section 19, an ED officer may arrest only on the basis of material in possession, after recording reasons to believe that the person is guilty, and must inform the person of the grounds. In Pankaj Bansal v. Union of India (2023), the Supreme Court held that the grounds of arrest must be given in writing. In Tarsem Lal v. Directorate of Enforcement (2024), it held that an accused who appears before the Special Court on a summons after cognizance need not satisfy the twin conditions to remain at liberty, and that the ED must apply to the court to take such a person into custody.

Which court

Bail is sought first before the Special Court. If it is refused, a bail application may be filed before the High Court, which for cases in Bihar is the Patna High Court, and a Special Leave Petition may then lie to the Supreme Court.