In a significant ruling that will have bearing on the cases registered by the Directorate of Enforcement (ED) in which accused persons, charged for alleged money laundering, are languishing in jail for long durations, the Supreme Court on Wednesday declared that the principle ‘bail is a rule, and jail an exception’ would apply even in the cases registered under stringent the Prevention of Money Laundering Act, 2002 (PMLA).

Granting bail to Prem Prakash, alleged to be an associate of Jharkhand Chief Minister Hemant Soren in an illegal mining case, a bench of Justice BR Gavai and Justice KV Viswanathan, in a judgment pronounced todays said, “The principle that, “bail is the rule and jail is the exception” is only a paraphrasing of Article 21 of the Constitution of India, which states that no person shall be deprived of his life or personal liberty except according to the procedure established by law.”

Prem Prakash who is in incarceration for the last 18 months, had moved the top court against Jharkhand High Court order denying him bail in the matter.

Speaking for the bench and further cementing the principle that bail is a rule, jail an exception, even in the cases prosecuted by the ED under the PMLA, Justice Viswanathan said, “Liberty of the individual is always the rule and deprivation is the exception. Deprivation can be made only by the procedure established by the law which has to be a valid and reasonable procedure. Section 45 of the PMLA by imposing twin conditions does not rewrite this principle to mean that deprivation is the norm and liberty is the exception. All that is required is that in cases where bail is subject to the satisfaction of the twin conditions, those conditions must be satisfied.”

The top court further clarified that although Section 45 of the PMLA only laid down that the grant of bail would be subjected to the twin conditions, it would not alter the fundamental principle that bail is the rule.

The twin conditions for bail under the PMLA provides that the public prosecutor should be given adequate opportunity to oppose the bail and secondly the accused has to prove, prima facie, that he is not guilty.

Referring to earlier top court judgments including recent judgment in AAP leader Manish Sisodia’s case granting him bail in both CBI and ED cases, Justice Viswanathan said, “Independently and as has been emphatically reiterated (in recent judgments) … where the accused has already been in custody for a considerable number of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty.”

Further, the court said that “keeping persons behind the bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution of 11 India and that prolonged incarceration before being pronounced ought not to be permitted to become the punishment without trial.”

In another significant ruling that is likely to dent some of the ED cases, Justice Viswanathan Said, “We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same Investigating Agency is inadmissible against the maker. The reason being that the person in custody pursuant to the proceeding investigated by the same Investigating Agency is not a person who can be considered as one operating with a free mind. It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice.”

Having said this, the top court said, “In the facts of the present case, we hold that the statement of the appellant if to be considered as incriminating against the maker, will be hit by Section 25 of the Evidence Act since he has given the statement whilst in judicial custody, pursuant to another proceeding instituted by the same Investigating Agency. Taken as he was from the judicial custody to record the statement, it will be a travesty of justice to render the statement admissible against the appellant.”

The appellant accused cannot be told that after all while giving this statement: – “you were wearing a hat captioned ‘ECIR 5/2023’ and not the hat captioned ‘ECIR 4/2022’ “, the court said.