The Supreme Court has refused to interfere with Madras High Court order whereby the Directors of a company were denied bail in acceptance to the contention that the harsh Twin Bail Conditions under Section 45(1) PMLA which was declared unconstitutional previoulsy by Supreme Court stands revived by 2018 amendment to the Finance Act.
Solicitor General of India, Mr. Tushar Mehta, in his arguement before the Bench of Justice A.M. Khanwilkar and Justice C.T. Ravikumar defended the constitutionality of amended Section 45 PMLA.
He argued that the two conditions of Section 45 were not per se unconstitutional and what SC in Nikesh Tarachand Shah Vs. Union of India & ANR., 2017 Latest Caselaw 823 SC considered to be 'unconstitutional', was arbitrarily linking the twin conditions only with the predicate offence or part of the predicate offence ("Part A of the Schedule").
He asserted that a provision declared 'unconstitutional' doesn't get wiped off from the statute book but merely becomes inoperative. He further implied in his arguement that Court cannot repeal a certain provision/statue as the power exclusively lies with the the legislature. He thus contended that if the ground on which the provision was declared unconstitutional, is cured, the provision automatically can be resurrected.
He thus sumitted that on this ground the defect on the basis of which the Supreme Court had declared it unconstitutional was cured and consequently the twin condition stood revived.
The Court didn't contradict to the above and accordingly upheld the Madras High Court order.
Finance Act, 2018 and Section 45 Amendment
The PMLA was amended by the Finance Act, 2018. The words "punishable for a term of imprisonment of more than three years under Part A of the Schedule" in Section 45 were substituted with the words "under this Act".
Read Order Here:
Read Madras High Court Judgement:
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