Can’t deny bail to sick, infirm only due to PMLA charges: SC

New Delhi The Supreme Court on Monday said that regardless of the stringent nature of the Prevention of Money Laundering Act (PMLA), courts must adhere to the legal framework, especially in granting bail to those who are sick or infirm.
Emphasising the significance of the proviso to Section 45 of PMLA, a bench led by Chief Justice of India (CJI) Dhananjaya Y Chandrachud asserted that PMLA’s rigour does not negate the rights of sick or infirm individuals under the law.
“However stringent PMLA is, we have to act in accordance with the law. If someone is sick or infirm, they can be granted bail,” said the bench, also comprising justices JB Pardiwala and Manoj Misra.
The top court reaffirmed that the law’s proviso, as outlined in Section 45, provides a legal pathway for bail based on health conditions, even within the framework of strict statutes such as PMLA.
The court’s pronouncement came as the bench granted interim bail to Amar Sadhuram Mulchandani, former chairman of Seva Vikas Cooperative Bank, who was arrested by the Enforcement Directorate (ED) on charges of money laundering. The bench took note of Mulchandani’s medical condition, deeming it appropriate for him to be let out on bail.
By granting bail to Mulchandani, the Supreme Court underscores a significant aspect of the PMLA’s proviso — recognising the rights of individuals with serious health issues to secure bail and receive necessary care outside the prison environment.
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Mulchandani, arrested in July 2023, faces charges related to the generation and layering of proceeds of crime amounting to ₹429.57 crore. His counsel, senior advocate Mukul Rohatgi, highlighted his serious health issues, and the bench reviewed a recent medical report confirming the need for intensive care. ED suggested transferring Mulchandani to JJ Hospital to address his health needs, but the Supreme Court noted that hospitalisation is not a substitute for bail under PMLA.
It pointed out that access to adequate medical care within government hospitals does not replace the legal provisions for bail when health concerns qualify an individual for such relief.
“The law is clear: the sick or infirm can be granted bail. To admit them to government hospitals is not the answer,” observed the court, emphasising that Mulchandani’s condition warranted interim relief under PMLA.
The bench also addressed a request from senior counsel ANS Nadkarni, representing an intervenor, who suggested that the court specify in its order that Mulchandani’s bail should be subject to revocation if he violates any conditions. The bench declined to add such a provision, stating that in the event of any violation, the ED could seek recourse from the trial court or return to the Supreme Court. “Why should we state the obvious. ED can always move the trial court or approach here in case there are violations,” it told Nadkarni.
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The Bombay high court denied Mulchandani’s bail in August, despite his prolonged hospitalization, on grounds that his health was showing improvement. The high court ordered his readmittance to Mumbai’s central prison but directed jail authorities to ensure he received appropriate medical attention.
The case reflects the apex court’s balanced approach towards PMLA’s stringent framework, particularly with regard to Section 45’s bail restrictions, which typically impose a high threshold for release. Section 45 required courts to conclude that the accused is not guilty of the offence and is not likely to commit the offence while on bail.
The bail order on Monday follows recent judgments that have underscored the importance of personal liberty, including bail as a constitutional right, even in cases involving severe statutory restrictions. Various benches of the apex court have delivered powerful rulings highlighting the need for the prosecution to act fairly, even under laws such as PMLA and UAPA which impose significant restrictions on bail. Many of these judgments involved the granting of bail to persons, such as Delhi chief minister Arvind Kejriwal, former Delhi deputy chief minister Manish Sisodia, Aam Aadmi party lawmaker Sanjay Singh and BRS leader K Kavitha, who had been arraigned as accused by ED in the Delhi excise policy case.
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Section 45 of PMLA stipulates that the public prosecutor must be given an opportunity to oppose the bail application of the accused. Furthermore, it requires the court to be convinced that there are reasonable grounds to believe the accused is not guilty and is not likely to commit any offence while on bail. These conditions generally make it challenging for an accused in a money laundering case to secure bail. UAPA and NDPS also have similar provisions that contemplate the reverse burden of proof, which requires the accused to prove their innocence, even during bail proceedings — a stark departure from the usual legal presumption of innocence until proven guilty.
By a judgment on September 26, the Supreme Court strongly disapproved of using the PMLA “as a tool” to prolong the incarceration of accused, ruling that constitutional courts will not allow indefinite pre-trial detention under the anti-money laundering law. While granting bail to former Tamil Nadu minister V Senthil Balaji, arrested in June 2023 on money-laundering charges arising out of cash-for-jobs scam case, the court sounded a clear warning about the abuse of PMLA provisions by the Enforcement Directorate (ED), delivering a scathing critique of how the law is being employed to keep individuals jailed without trial for an unreasonably long time. This judgment penned by justice Abhay S Oka reflected growing judicial concern that the statute could be weaponised in a way that violates fundamental rights under Article 21 of the Constitution, which guarantees the right to life and personal liberty.