New Delhi: The Supreme Court on Wednesday said that the principle 'bail is a rule, and jail an exception' will apply in cases registered under the stringent Prevention of Money Laundering Act (PMLA) and made it clear that any incriminating statement made by an accused in custody in a PMLA case before an investigating officer will not be admissible in court.
The apex court said it will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice. A bench comprising Justices B R Gavai and K V Viswanathan held that a statement given by an accused under custody cannot be treated as admissible under Section 50 of PMLA.
Statement under custody is inadmissible
Justice Viswanath, who authored the judgment on behalf of the bench, said: "We have no hesitation in holding that when an accused is in custody under PMLA irrespective of the case for which he is under custody, any statement under Section 50 PMLA to the same investigating agency is inadmissible against the maker.".
Justice Viswanathan said that the reason being that the person in custody pursuant to the proceeding investigated by the same investigating agency is not a person who can be considered as one operating with a free mind.
"It will be extremely unsafe to render such statements admissible against the maker, as such a course of action would be contrary to all canons of fair play and justice," he said.
The bench stressed that a person in judicial custody being not a free person cannot be summoned and any statement to be recorded will be after obtaining the permission of the court which has remanded him to the judicial custody in the other case.
Bail is rule and jail is exception even in PMLA cases
The bench, citing the bail order in Manish Sisodia’s case, said it will be amply clear that even under PMLA the governing principle is that "bail is the rule and jail is the exception".
In the 44-judgment, Justice Viswanath stressed that liberty of the individual is always a rule and deprivation is the exception and deprivation can only be by the procedure established by law, which has to be a valid and reasonable procedure.
"Section 45 of PMLA by imposing twin conditions does not re-write this principle to mean that deprivation is the norm and liberty is the exception. As set out earlier, all that is required is that in cases where bail is subject to the satisfaction of twin conditions, those conditions must be satisfied", he said.
The bench pointed out that in cases where the accused has already been in custody for a considerable number of months and there being no likelihood of conclusion of trial within a short span, the rigours of Section 45 of PMLA can be suitably relaxed to afford conditional liberty. According to the twin conditions for bail under the PMLA, the prosecutor should be given adequate opportunity to oppose the bail and secondly, the accused has to prove prima facie that he is not guilty.
Prolonged incarceration is punishment without trial
The bench said keeping persons behind bars for unlimited periods of time in the hope of speedy completion of trial would deprive the fundamental right of persons under Article 21 of the Constitution.
"Prolonged incarceration before being pronounced guilty ought not to be permitted to become the punishment without trial," said the bench. The bench said it is in this background that Section 45 of PMLA needs to be understood and applied.
"Article 21 being a higher constitutional right, statutory provisions should align themselves to the said higher constitutional edict," it said.
Then bench emphasised that in cases where the public prosecutor takes a considered decision to oppose the bail application, the investigating agency should make out a cogent case as to how prima facie established in the given case to help the court at the bail application stage to arrive at a conclusion within the framework laid down in Vijay Madanlal Choudhary (2022 PMLA judgment).
The bench said it is after the foundational facts are set out that the accused will assume the burden to convince the court within the parameters of the enquiry at the Section 45 stage that for the reasons adduced by him there are reasonable grounds to believe that he is not guilty of such offence.
Reliance on statement of the accused
The bench said that in the oral submissions and also as elaborated in the detailed written submissions by the Enforcement Directorate, reliance is sought to be placed on the statements of the appellant.
The bench said the question that arises is when a person is in judicial custody/custody in another case investigated by the same investigating agency, whether the statements recorded for a new case in which his arrest is not yet shown, and which are claimed to contain incriminating material against the maker, would be admissible under Section 50?
The bench said in Vijay Madanlal Choudhary (supra), the apex court anticipated the myriad situations that may arise in the recording of the Section 50 statement.
"In the facts of the present case, we hold that the statement of the appellant if to be considered as incriminating against the maker, will be hit by Section 25 of the Evidence Act since he has given the statement whilst in judicial custody, pursuant to another proceeding instituted by the same Investigating Agency," said the bench.
Justice Viswanathan said taken as he was from judicial custody to record the statement, it will be a travesty of justice to render the statement admissible against the appellant.
The bench noted that the accused is in a vulnerable position and the investigating agency is in a dominating position, and in view of the arrest in the other proceeding is there a conducive atmosphere to obtain a confession?
The bench said keeping the salutary principle of Article 21 in mind, “We hold that since the words 'procedure established by law' occurring in Article 21 has to be a reasonable and valid procedure, the statement of the appellant under Section 50 cannot be read upon in ECIR (of 2023) even though the appellant was at that point in custody in another ECIR (2022)".
Regarding the statement of the co-accused, the bench said his statement against the appellant assuming there is anything incriminating against the present appellant will not have the character of substantive evidence.
"The prosecution cannot start with such a statement to establish its case. We hold that, in such a situation, the law laid down under Section 30 of the Evidence Act by this Court while dealing with the confession of the co-accused will continue to apply," it said, adding that the appellant has already been in custody for over one year and the trial is yet to commence.
Allowing the bail plea of appellant Prem Prakash, the apex court directed the trial court to release him in connection with ED Case No. ECIR No. 5 of 2023 on furnishing bail bonds for a sum of Rs. 5 lakhs with 2 sureties of the like amount.
"The appellant shall surrender his passport with the Trial Court and the appellant shall report to the Investigating Officer on every Monday and Thursday between 10 and 11 A.M. (iv) The appellant shall not make any attempt to influence the witnesses and tamper with the evidence”, said the bench.
The petitioner is alleged to be an aide of Jharkhand Chief Minister Hemant Soren. He moved the apex court after the Jharkhand High Court had in March 2024 denied him bail in the matter.
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