On Thursday, December 19, the Supreme Court strongly criticized the Enforcement Directorate (ED) for contending that the stringent bail conditions under the Prevention of Money Laundering Act (PMLA) apply even to women, despite an express statutory proviso granting them an exemption.
The bench, comprising Justice Abhay Oka and Justice Augustine George Masih, was hearing a petition filed by Shashi Bala, a government schoolteacher accused of aiding the Shine City Group in laundering proceeds of crime. Bala challenged the Allahabad High Court’s denial of bail, which had cited the gravity of her involvement in fraudulent schemes.
ED’s Argument and Court’s Response
The ED’s counsel, Additional Solicitor General Satya Darshi Sanjay, argued that the exemption under the proviso to Section 45(1)(ii) of PMLA for women, minors, and infirm persons is not absolute and that the severity of the alleged offense warranted the application of rigorous bail conditions. The ASG submitted that Bala was not a “rustic woman” but an active participant in the alleged fraud, acting as a confidant to Shine City Group’s director and facilitating illegal transactions.
Justice Oka questioned the validity of this argument, asking whether the Union of India was suggesting that the rigorous bail conditions applied even to women, contrary to the statute. He warned that such submissions could necessitate the involvement of the Attorney General. “If submissions are going to be made by the Union of India contrary to express statute, we will not countenance such submissions,” Justice Oka remarked.
The ASG sought time to respond to the court’s questions and clarify the ED’s position. Justice Oka, while granting time, emphasized that the proviso to Section 45(1)(ii) does not mean bail is to be granted automatically to women, but rather that the stringent conditions should not apply.
High Court’s Decision and Grounds for Denial
The Allahabad High Court had earlier rejected Bala’s bail application, citing her active role in the fraudulent schemes run by Shine City Group, which duped investors across states. The court noted her involvement in concealing proceeds of crime and her close association with the company’s director, Rasheed Naseem. Despite her argument that she was a vulnerable woman and that the trial was unlikely to conclude soon, the High Court found the scale of the fraud and the multiple FIRs sufficient grounds to deny relief.
The High Court also distinguished her case from precedents like K. Kavitha and Manish Sisodia, stating that her significant involvement disqualified her from similar relief.
Supreme Court’s Interim Observations
The Supreme Court expressed concern over the ED’s position, calling it a straightforward legal issue. The bench noted that while the rigorous conditions under Section 45(1)(ii) of PMLA do not apply to women, this does not automatically guarantee bail. The court directed the ED to file a counter affidavit by January 10, 2025, and listed the matter for further hearing on January 15, 2025.
Justice Oka highlighted the troubling trend of lawyers seeking time on clear legal issues and reiterated the importance of clarity in statutory interpretation.
Key Takeaways
- Proviso to Section 45(1)(ii): Women, minors, and infirm persons are exempt from the stringent bail conditions under PMLA. However, this does not guarantee automatic bail but removes the additional burden imposed by the rigorous conditions.
- ED’s Position: The agency contended that the gravity of the offense justified applying the stringent conditions even to a woman, which the court criticized as contrary to statutory provisions.
- Next Steps: The ED must clarify its position and file a counter affidavit by January 10, 2025.
Case Details
Case Title: Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement
Case No.: Petition for Special Leave to Appeal (Crl.) No. 16260/2024
Next Hearing: January 15, 2025
Lawcutor 