The bail provisions under the Prevention of Money Laundering Act (PMLA) are stringent and were extended all kinds of offences under PMLA. Data indicates that between 2014 and 2024, a total of 5,294 cases were registered under PMLA with only 40 resulting in convictions, and 3 leading to acquittals.
The amendments to the Prevention of Money Laundering Act (PMLA) in 2018 and 2019 have ignited widespread debate and criticism across the nation. Before these amendments, Section 45 and its subsections (1) and (2) mandated that individuals accused of offences punishable by more than three years of imprisonment could not be granted bail unless the Public Prosecutor (PP) had an opportunity to oppose the bail and the court was convinced that there were reasonable grounds to believe the accused was guilty and would not commit any offence while on bail.
This made it exceedingly difficult for the accused to secure bail, as the burden of proof rested on them even during the investigation and trial, requiring them to demonstrate that they had not committed the alleged offence and would not commit any other offences while on bail. In 2017, the Supreme Court (SC) in its verdict struck down these provisions, ruling them violative of Articles 14 and 21 of the Indian Constitution. However, the Indian Parliament reintroduced these stringent bail provisions through the 2018 amendment. By the same amendment, it also made these stringent bail provisions applicable to all types of offences under the PMLA, not just those punishable by more than three years.
On challenge, the SC upheld the amendments in 2022. While this verdict is currently under review by a larger bench of the SC, as of date, any person accused under the PMLA, irrespective of the type of offence and tenure of imprisonment, must face stringent bail provisions.
Meanwhile, various judicial rulings have reiterated that the right to bail and personal liberty, which are integral components of the Right to Life guaranteed under Article 21 of the Constitution, cannot be undermined by the stringent bail provisions introduced in the amended PMLA. Recently, the SC, while granting bail to Manish Sisodia, the former Deputy Chief Minister of Delhi and Aam Aadmi Party (AAP) leader who spent 17 months in prison on PMLA charges, reaffirmed the principle that “Bail is the rule, jail is the exception.”
Against this backdrop, we look at the trends in the number of individuals accused, convicted, and acquitted under the PMLA.
ED attached Over ₹1 Lakh Crore Under PMLA
Section 3 of the PMLA defines “Money Laundering” as whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of the offence of money laundering. In other words, whosoever, including firms, companies, etc., either directly or indirectly attempts to bring illegal money into the mainstream financial system and projects it as clean money would be held guilty of money laundering. As per the recent 06 August 2024 reply given in Rajya Sabha, the Enforcement Directorate (ED) has so far seized Rs. 3725.76 crores, frozen Rs. 4651.68 crores and attached Rs. 1,31,375 crores under PMLA.
Exponential Increase in PMLA Cases Since 2019
According to a recent reply in the Lok Sabha, the total number of cases registered under PMLA has increased significantly, from 195 in 2014 to 934 in 2023 – a 378% increase over the span of a decade. Notably, from 2014 to 2018, the number of cases registered annually remained below 200, with the highest being 195 in 2014 and the lowest at 146 in 2018. However, since 2019, the number of cases has increased exponentially, with 708 cases in 2020, 1166 in 2021, 1074 in 2022, and 934 in 2023. As of August 2024, 397 cases have already been registered.
Conviction and Acquittal Rates are below 1%
Despite the significant increase in the number of cases registered PMLA, the conviction and acquittal rates remain strikingly low, both below 1% of the total cases registered. Between 2014 and 2024, a total of 5,294 cases were registered, but only 40 resulted in convictions, and 3 led to acquittals. Over this period, 3 out of 11 years saw no convictions at all, while the remaining 8 years had only single-digit convictions annually, with the highest being 9 in both 2023 and 2024. As for acquittals, 9 of the 11 years recorded none, with only 2 acquittals in 2017 and 1 in 2024.
This means that over 99% of the accused remain under trial. The reply in Rajya Sabha further shows that from 2016 to 2024, only a total of 375 accused were in jail, leaving the rest under bail. The SC in its recent judgment in Sheikh Javed Iqbal vs. State of Uttar Pradesh held that even if the charges laid against the accused are serious, it is the duty of the prosecution to ensure speedy trial, as a matter of Fundamental Right to Life under Article 21 of Constitution. However, the data of PMLA shows that over 99% of the cases are under trial.
From 2019 to 2024, Average Charge Sheet Rate is about 20%
In yet another reply dated 06 August 2024 given in Rajya Sabha, the number of charge sheets, referred to as Prosecution Complaints (PCs) by ED, to the total cases in which Enforcement Complaint Information Reports (ECIRs) registered during the years 2019 to 2024 varied from 10% to 34%. Overall, from 2019 to 2024, the average charge sheet rate is about 20%. The highest was during the year 2024 with 34% of charge sheets and the lowest being in the year 2021 with 11%. Further, the same reply also revealed that from 2019 to 2024, the ED filed 1,519 cases against private companies and not a single case against any of the companies has been closed during the same period. These figures of charge sheets and closure are also indicative of the slow pace of the trials, which account for over 99% of cases registered.
As per another reply dated 06 August 2024, from 2019 to 2024, an average of about 4-5% of total cases registered were against the former or sitting MLAs, MPs, and other politicians who are associated with any political party. Altogether, a total of 132 out of 4,467 cases registered were against the politicians. During the same period, only in 5 cases the charge sheets were filed, and one politician was convicted.
SC notes Courts are flooded with Huge Number of Bail Petitions
While granting bail to Manish Sisodia, the SC noted that the trial is proceeding at a snail’s pace with its incompletion even after the lapse of stipulated time period. It also noted that “over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straight forward open and shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency.”
These statistics of an increasing number of cases, the stringent provisions of PMLA relating to the grant of bail and the huge pendency of cases before the judiciary necessitate a holistic approach to speed up the disposal of cases.
