PMLA Bail Controversy

January 17, 2025

Recently, the Supreme Court of India addressed the Enforcement Directorate’s (ED) interpretation of bail conditions under the Prevention of Money Laundering Act (PMLA), 2002. The case involved Shashi Bala, a teacher accused of aiding a money laundering scam. The court’s ruling brought into light the legal exceptions for women in such cases, sparking discussions on the application of stringent bail standards.

Prevention of Money Laundering Act

The PMLA, enacted in 2002, aims to prevent money laundering and confiscate properties derived from such activities.
It defines money laundering offences and imposes penalties, including imprisonment and fines.
The Act mandates financial institutions to report suspicious transactions.

Bail Provisions Under PMLA

Section 45 of the PMLA outlines stringent bail conditions.
The accused must prove they are not guilty and unlikely to commit further offences.
However, there is an exception for women, minors, and the infirm, allowing for bail at the discretion of the Special Court.

Shashi Bala Case Overview

Shashi Bala was accused of assisting Rasheed Naseem of Shine City Group in a money laundering scheme involving around ₹800-1000 crore. She was arrested in November 2023 and denied bail by the Allahabad High Court, which cited her connections to the main accused as a risk factor.

Supreme Court Ruling

On January 15, 2025, the Supreme Court granted bail to Bala, criticising the ED’s argument against the statutory exception for women. The Court brought into light the need for legal representatives to understand the law accurately.

Legal Precedents

In 2023, the Delhi High Court granted bail to Preeti Chandra, emphasising that the PMLA does not distinguish between types of women. The ruling reinforced the application of the exception for women under Section 45(1).

Concerns Over PMLA

Critics argue that the PMLA’s definition of “proceeds of crime” is overly broad, potentially leading to misuse. The burden of proof on the accused is seen as excessively onerous, raising fairness concerns in legal proceedings.

Recent Amendments

Amendments to the PMLA have aimed to clarify the definition of “proceeds of crime” and to treat money laundering as an independent crime. These changes reflect evolving international standards and address previous ambiguities.

Reforms and Suggestions

Proposals for reforming the PMLA include reassessing the burden of proof, refining definitions, and enhancing oversight of the Enforcement Directorate. Suggestions also include periodic reviews of the Act and public education on its implications.

Judicial Perspectives

The judiciary has stressed the importance of personal liberty in bail decisions. Historical rulings emphasise careful consideration of individual rights and the implications of denying bail under stringent laws like the PMLA.

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