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Nikesh Tarachand Shah v. Union of India

Writ Petition (Criminal) · 2017 INSC 1137Decided 23 Nov 2017
Writ Petition (Criminal) No. 67 of 2017
Justice Rohinton Fali Nariman · Justice Sanjay Kishan Kaul

Background

This batch of writ petitions and appeals (led by Nikesh Tarachand Shah, with several other connected petitions and appeals clubbed in) challenged Section 45 of the PMLA, 2002. Section 45(1) imposed two strict additional conditions before a person accused of a scheduled money-laundering offence could get bail: the Public Prosecutor had to be given an opportunity to oppose bail, and the court had to be satisfied the accused was not guilty and unlikely to commit any offence while on bail. These conditions applied only to offences listed in Part A of the PMLA Schedule where the alleged amount exceeded a certain monetary threshold, which the petitioners argued was arbitrary. Many of the petitioners/appellants had been denied bail by lower courts and High Courts solely because of these "twin conditions."

Decision Breakdown

The Supreme Court held that Section 45(1), insofar as it imposed these twin conditions for bail, was unconstitutional, as it violated Articles 14 (equality) and 21 (personal liberty) of the Constitution. The Court reasoned that classifying offences for the purposes of bail based purely on a monetary threshold (Rs. 30 lakh and above triggering Part A, below which there was no such restriction) had no rational nexus with the object of granting or denying bail, making the classification arbitrary. Having struck down Section 45 as a whole, the Court set aside all orders before it in which bail had been denied on the strength of the twin conditions, and remanded those bail matters back to the respective courts to be decided afresh on merits without applying Section 45's twin conditions, directing that these be heard urgently given that the persons involved were in custody.

Lesson Learnt

A law cannot make it harder to get bail for one category of accused than another based on an arbitrary yardstick (like a monetary threshold) that has no real connection to flight risk or public safety: bail conditions must have a rational basis, or courts can strike them down as unconstitutional even in serious economic-offence laws like PMLA.

Official source (sci.gov.in)View Judgment (PDF)

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