Supreme Court: PMLA Twin Test for Bail Not Applicable to Accused Appearing Under Summons and Not Arrested During Probe

The Supreme Court on Thursday issued a significant judgment concerning the bail conditions under the Prevention of Money Laundering Act (PMLA), bringing relief to those accused who respond to court summons without prior arrest by the Enforcement Directorate (ED).

The court clarified that such individuals are not required to meet the stringent bail conditions typically demanded under Section 45 of the PMLA.

Under Section 45 of the PMLA, an accused must satisfy a twin test to be eligible for bail, which includes convincing the court that they are not guilty of the offence and are unlikely to commit any offence while on bail. Additionally, this section mandates that the Public Prosecutor be given a chance to oppose the bail application, creating a high threshold for securing bail in money laundering cases.

Court’s Clarification:

The judgment delivered by a bench consisting of Justices Abhay S Oka and Ujjal Bhuyan stipulates that if an accused appears before the special court following a summons, they are not to be considered in custody. Thus, the stringent twin conditions for bail under Section 45 do not apply to them.

The ruling specifies that in situations where the accused presents themselves in court upon summons, the ED must file an application with the court should they seek custody. The court will grant custody only if there are compelling reasons presented that justify the need for custodial interrogation.

The Supreme Court’s ruling is expected to impact numerous ongoing and future cases under the PMLA, encouraging a more balanced approach between enforcing stringent anti-money laundering measures and protecting individual rights.

Case Title: Tarsem Lal v. Directorate of Enforcement Jalandhar Zonal Office, Special Leave to Appeal (Crl.) No(s). 121/2024

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