SC Criticizes ED Over PMLA Bail Exceptions Misuse

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The Supreme Court criticized the ED for misinterpreting PMLA’s bail provisions, emphasizing uniform application of exceptions for women, minors, and sick individuals during a bail plea hearing for an accused in a money laundering case.

SC Criticizes ED Over PMLA Bail Exceptions Misuse

SC Criticizes ED’s Interpretation of Bail Provisions under PMLA:

  • The Supreme Court (SC) criticized the Enforcement Directorate (ED) for misinterpreting the Prevention of Money Laundering Act (PMLA) provisions regarding bail exceptions for women.
  • The SC emphasized strict adherence to statutory provisions during the bail hearing of Shashi Bala, accused in a money laundering case involving Shine City Group.

Legal Precedents and Case Developments

  • In 2023, the Delhi High Court granted bail to Preeti Chandra, rejecting ED’s argument that only “vulnerable” women qualified for exceptions.
  • Conversely, Shashi Bala’s bail was denied by the Allahabad High Court in 2024, citing her alleged close association with Shine City promoter Rasheed Naseem and the scale of the fraud.
  • The SC granted Shashi Bala bail in 2025, asserting that exceptions for women under PMLA must be applied uniformly, regardless of socio-economic status.
  • The SC strongly condemned the ED for presenting arguments contrary to the law and urged strict compliance with legal provisions.

About PMLA Bail Provisions and Exceptions:

  • Section 45(1) of PMLA sets stringent bail conditions, requiring the accused to prove no prima facie case against them.
  • Exceptions under Section 45 apply to minors, women, and sick persons, allowing bail without stringent conditions.
  • The SC rebuked ED for attempting to create sub-classifications like “household women” or “educated women” to deny exceptions under Section 45.

About Money Laundering:

  • Definition: Illegal process to disguise origins of illicit funds from activities like drug trafficking, corruption, and terrorism financing.
  • Stages:
  • Placement: Introduction of illicit money into financial systems.
  • Layering: Concealing origins through complex transactions.
  • Integration: Reintroducing laundered money as legitimate assets.

Prevention of Money Laundering Act, 2002 (PMLA)

  • Objectives: Prevent, detect, confiscate proceeds of crime, and promote global cooperation.
  • Key Provisions: Defines money laundering, imposes penalties, allows property confiscation, and mandates transaction reporting.
  • Amendments: Enhanced scope (2009, 2012), added Politically Exposed Persons (2023).

Concerns about PMLA

  • Issues: Covers minor offenses, burdens accused with proving innocence, strict bail norms, and wide powers for authorities.
  • Rights Violations: Alleged infringement of Articles 14, 20(3), and 21 of the Constitution.