New Delhi: The Supreme Court on Thursday emphasized that money laundering poses a significant threat not only to the country’s financial systems but also to its integrity and sovereignty. It ruled that courts must not adopt a casual or cursory approach while granting bail in such cases and must ensure that the twin conditions under the Prevention of Money Laundering Act (PMLA) are met.
A bench comprising Justices Bela M Trivedi and Prasanna B Varale clarified that the burden of proof lies on the accused to demonstrate that they were not involved in generating proceeds of crime. The court overturned a Patna High Court order that granted bail to an accused, directing him to surrender.
Strict Bail Conditions Under PMLA
The ruling comes amid multiple judicial orders extending the principle that “bail is the norm, jail an exception” to money laundering cases. However, the apex court underscored that Section 45 of PMLA sets strict conditions for bail, which include:
- The prosecutor must be given an opportunity to oppose the bail application.
- The court must be satisfied that there are reasonable grounds to believe that the accused is not guilty and is unlikely to commit any offence while on bail.
“These two conditions are mandatory and must be fulfilled before an accused is released on bail,” the bench stated.
High Court’s ‘Casual’ Approach Criticized
The Supreme Court criticized the Patna High Court’s decision, stating that bail was granted in a “very casual and cavalier manner” without considering the stringent requirements of Section 45. The court noted that there was no finding to suggest that the accused was not guilty or that he was unlikely to reoffend.
“Money laundering is not an ordinary offence. It is considered an aggravated form of crime worldwide, and those connected to proceeds of crime form a distinct class from ordinary criminals. Courts cannot take a lenient approach or issue cryptic orders when dealing with such offences,” the bench observed.
Money Laundering: A Crime Against National Interest
The court further asserted that money laundering is committed with a deliberate intent to amass wealth while disregarding national and societal interests. “By no stretch of imagination can this be considered a trivial offence. The Act’s stringent provisions are designed to combat the menace of money laundering,” the bench added.
Additionally, the court highlighted Section 24 of PMLA, which presumes that proceeds of crime are involved in money laundering unless the accused proves otherwise. “The burden to establish that the proceeds of crime are not linked to money laundering lies on the accused,” the ruling stated.
Case Background
The case pertained to Kanhaiya Prasad, son of politician Radha Charan Sah, who was arrested in September 2023 for alleged involvement in illegal sand mining in Bihar. He was granted bail by the Patna High Court in May 2024, a decision that the Enforcement Directorate (ED) challenged in the Supreme Court. The apex court’s verdict underscores the judiciary’s firm stance on tackling financial crimes.
