Supreme Court Upholds Personal Liberty Against PMLA’s Stringent Bail Conditions In a significant ruling that bolsters the right to personal liberty, the Supreme Court of India held that individuals summoned by a designated special court under the Prevention of Money Laundering Act (PMLA) are presumed to be not in custody and, therefore, do not need to apply for bail under the stringent conditions imposed by the anti-money laundering law. The Bench of Justices A.S. Oka and Ujjal Bhuyan clarified this position, stating, “If the accused appears before the special court pursuant to a summons, it cannot be treated that he is in custody. Therefore, it is not necessary for the accused to apply for bail.”

Restricting the Enforcement Directorate’s Power of Arrest This landmark judgment significantly limits the Directorate of Enforcement’s (ED) power to arrest after a special court takes cognizance of a case. The Court held that the ED must make a separate application for the custody of an individual once they appear in court, and must provide specific grounds necessitating custodial interrogation. Justice Oka, authoring the judgment, emphasized that mere appearance in response to a summons does not place the accused in custody.

Furnishing Bonds Instead of Bail The Court further explained that the special court can direct the accused to furnish bonds in accordance with Section 88 of the Code of Criminal Procedure (CrPC). “A bond furnished in terms of Section 88 CrPC is only an undertaking. An order accepting bond under Section 88 does not amount to grant of bail and hence the twin conditions of Section 45 of the PMLA are not applicable to it,” Justice Oka elucidated. This distinction is crucial as it sidesteps the rigorous bail conditions mandated by Section 45 of the PMLA.

The Case of Tarsem Lal The ruling came in response to an appeal by Tarsem Lal against the ED, challenging a Punjab and Haryana High Court order that denied him anticipatory bail. The Supreme Court’s judgment not only provided relief to Tarsem Lal but also set a significant precedent for future cases involving the PMLA, ensuring that the rights of individuals are safeguarded against potential misuse of the law’s stringent provisions.

Implications of the Judgment

1. Protection of Personal Liberty: This judgment strengthens the protection of personal liberty by ensuring that individuals summoned under the PMLA are not automatically considered in custody, thereby avoiding the need to meet the harsh bail conditions of Section 45 of the PMLA.

2. Check on ED’s Authority: The ruling places a check on the ED’s authority to arrest, requiring the agency to justify the need for custodial interrogation on specific grounds. This adds a layer of judicial oversight to the process, preventing arbitrary use of arrest powers. 3. Clear Legal Distinctions: By differentiating between bonds under Section 88 CrPC and bail, the Court has clarified legal procedures, ensuring that individuals are not unnecessarily subjected to stringent bail conditions when they are not in actual custody. This judgment marks a pivotal moment in the interpretation of the PMLA, promoting a balanced approach that respects individual liberties while addressing the needs of law enforcement. For legal practitioners and stakeholders, it provides a clear framework for navigating the complex interplay between summons, custody, and bail under the PMLA.