Can't deny bail due to twin test in PMLA, when arrest illegal: Supreme Court

New Delhi: The Supreme Court has said a man cannot be denied for non-fulfillment of twin tests under the Prevention of Money Laundering Act, when his arrest itself has been found as illegal or vitiated.

A bench of Justices Abhay S Oka and Ujjal Bhuyan said once a court, while dealing with a bail application, finds that the fundamental rights of the accused under Articles 21 and 22 of the Constitution have been violated while arresting him or after arresting him, it is the duty of the court to release the accused on bail. 

"The arrest in such cases stands vitiated. It is the duty of every court to uphold the fundamental rights guaranteed under Articles 21 and 22 of the Constitution. Therefore, when arrest is illegal or is vitiated, bail cannot be denied on the grounds of non-fulfillment of twin tests under clause (ii) of sub-section 1 of Section 45 of PMLA," the bench said in a recent order.

The twin tests here mean the court must have reasonable grounds to believe that the accused is not guilty and the court must be convinced that the accused is unlikely to commit another offense while on bail.

In the case, the court rejected a plea by the Enforcement Directorate against the Chhattisgarh High Court's 2022 order which directed release of Subhash Sharma, arrested after his detention from IGI airport here on the basis of a look out circular.

The accused was wanted in a bank fraud case. The High Court, however, found he was not produced before the judicial magistrate within 24 hours as mandated under the Constitution and the law.

The court noted undisputedly, the physical custody of the Sharma was taken over by the ED from the Bureau of Immigration at 11.00 hours on March 5, 2022. Thereafter, at 1.15 hours on March 6, 2022, an arrest memo was prepared by ED at Raipur. He was produced before the Court at 3 pm on March 6, 2024.

The bench, thus, said, "The continuation of the respondent in custody without producing him before the nearest Magistrate within the stipulated time of 24 hours is completely illegal and it infringes fundamental rights under clause 2 of Article 22 of the Constitution of India. Therefore, his arrest gets vitiated on completion of 24 hours in custody. Since there is a violation of Article 22(2) of the Constitution, even his fundamental right to liberty guaranteed under Article 21 has been violated."

The bench found, the reading of the arrest order showed that the typed order was kept ready. The date and time of arrest were kept blank which appear to have been filled in by hand. Admittedly, Sharma was not produced before the nearest Magistrate within 24 hours from 11.00 am on March 5, 2022, it said.

The court held that the arrest of the respondent was rendered completely illegal as a result of the violation of clause 2 of Article 22 of the Constitution, mandating the production of accused before the court within 24 hours.

It also referred to Section 57 of the CrPC which stated that a person can't be detained for more than 24 hours without judicial scrutiny.