Satyendar Jain, PMLA and the Shrinking Contours of Personal Liberty

Satyendra Jain, a former cabinet minister in the Delhi government of the Aam Aadmi Party, has been behind the bars since 30 May 2022 for offences allegedly committed under the Prevention of Money Laundering Act, 2002 (PMLA).

Earlier this month, the Delhi High Court extended his period of incarceration, after concluding that Mr Jain’s bail plea did not meet the 'twin requirements' under the PMLA.

The 'Twin Requirements Under PMLA': A Brief history

Laid down under Section 45 of the PMLA, these twin conditions, while necessitating that the prosecution is heard before grant of bail, also mandate that bail be granted only when the Court is satisfied that there are “reasonable grounds” for believing that:

(i) the accused has not committed the alleged offence; and that

(ii) he shall not commit any offence while out on bail.

These “reasonable grounds”, as expounded by the apex court, constitute something more than a prima facie case and require substantial reasons for the court to make up its mind in favour of the accused. 

The provision, at the very first glance, sounds excessive and in transgression of the settled bail jurisprudence in India, which does not require a detailed appreciation of evidence and/or discussion on merits of the case at the stage of bail hearing.

Before 2018, however, the provision had a slightly different form: the twin conditions were required to be met only for those offences which carried a term of imprisonment of more than three years.

This aspect of the provision was invalidated by the Supreme Court in November 2017 with a finding that Section 45 was “manifestly arbitrary” and “unjust” and consequently violated, among other thing, the fundamental right to life and liberty.

Not only was this legislative action validating an unconstitutional law legally impermissible, but it also amounted to a much more punitive prescription against personal liberty.

What came as a surprise, however, was the deference of the Supreme Court to this prescription.

In its full bench judgment in  Vijay Madanlal Choudhary vs Union of India, the apex court observed that the offence of money laundering is akin to terrorism and upheld the application of the twin conditions to serious and non-serious offences alike. 

Satyendra Jain Order and the Anomalies of PMLA

The effect of the verdict in Vijay Madanlal Choudhary is an absurd equivalence, in which a person accused of having laundered the proceeds of crime earned out of an alleged copyright infringement will fetch the same treatment as a person accused of laundering money obtained by waging a war against the Government of India.

This peculiarity intuitively begs scrutiny of the twin conditions on the touchstone of proportionality.

To safeguard from indiscriminate State interference, the doctrine of proportionality does not allow any State action to be more far-reaching than what is required for achieving the intended objective. Surely on this test alone, Section 45 does not fare as proportional.

That said, Section 45 is only of the many pitfalls of PMLA which militate against the constitutional mandate of personal liberty. 

Again, this provision has been upheld by the Supreme Court due to “seriousness of the socio-economic offence of money laundering” and “compelling State interest”.

The calamitous fallout of this provision is that the burden on the prosecution to prove guilt beyond reasonable doubt – a sine qua non of criminal jurisprudence – is inevitably lowered, as there exists a bias against the accused from the very beginning. 

This is evident from the case of Satyendra Jain, where his plea for bail was rejected on the basis of statements recorded under Section 50, even though such statements were prima facie contradictory in the eyes of the High Court.

To make matters worse, even a copy of the enforcement case information report- which contains details of the offence and grounds of arrest and is akin to a first information report- is not shared with an accused at the stage of bail, as it is considered to be an “internal document”.

Even so, a more disturbing trend is noticed in the High Court order rejecting bail to Jain.

While indirectly acknowledging that the ED is yet to gather direct evidence against him, even after almost a year of his imprisonment, the High Court refuses to extend the benefit of absence of direct evidence to the accused; instead, the order nods in agreement with the case of the prosecution – an unconvincing assertion that the accused is a criminal mastermind who has hatched a top-notch conspiracy, and whose plan is a tough nut to crack.

Not once does the High Court lament the inefficiency in investigation by the ED or question its insistence on continued incarceration when the ED is legally mandated to collect the required evidence within a statutorily prescribed time period, failing which the accused can no longer be detained.

On the whole, the order appears to be an exercise in convenience where all facts and evidence, irrespective of which side they appear to aid, further the case against grant of bail and in favour of the objectives of the PMLA. 

Sacrificing Liberty

Last week, while arguing an appeal against the order of the Madras High Court, senior advocate Kapil Sibal termed the PMLA as the “most draconian statute that has ever seen the light of day in the country”.

Quite coincidentally, on the very same day, a two judge bench of the Supreme Court opined that its thirty year old verdict which mandates that a person cannot be kept in police custody post the expiry of fifteen days from their initial arrest needed a relook.

Subject to the above, personal liberty of an individual remains sacrosanct and can only be restricted by a just, fair and reasonable law.

It requires reiteration that the PMLA, in its current form, is not a just law as many of its provisions lack substantive due process as well as proportionality. In such a case, insistence of our constitutional courts to mechanically interpret these provisions may lead to a gradual erosion of several of our civil and political rights, not least, the right to liberty and security of freedom.

The constitution recognises us as citizens and not subjects of the State, and it is the duty of our courts to protect and uphold that status. 

(Harshit Anand is an advocate practising in Delhi. He tweets at @7h_anand and can be reached at [e-mail]. This is an opinion piece and the views expressed are the author's own. The Quint neither endorses, nor is responsible for them.)