Tracing Dirty Money And Unmasking The Notion Of Bail Under PMLA: A Critical Legal Appraisal.
- IJLLR Journal
- Feb 20
- 2 min read
Mr. Varun Thanawala, B.B.A. LL.B. (Hons.), Jindal Global Law School, O. P. Jindal Global University
ABSTRACT
The process of globalization has created unparalleled interconnectedness while simultaneously revealing vulnerabilities inside financial systems, significantly altering the global economic landscape. Money laundering is a prevalent financial crime that jeopardizes societal trust, governance, and economic stability. The three stages of money laundering are placement, layering, and integration, which involve concealing illicit funds to render them legitimate. This process exploits regulatory inconsistencies and the interconnectedness of global financial systems.
This study critically reviews the legal frameworks addressing money laundering, with a primary focus on the Prevention of Money Laundering Act, 2002 (PMLA), India's principal legislation in this domain. The PMLA bestows significant investigative and prosecutorial authority onto officials; yet, its stringent conditions, particularly Section 45 concerning bail requirements, have garnered considerable scrutiny. The courts must ascertain the absence of prima facie guilt and guarantee that the accused will not perpetrate further offences to grant bail under the stringent twin conditions of Section 45. This clause has raised concerns over the erosion of the presumption of innocence and the right to liberty as articulated in Article 21 of the Indian Constitution.
Judicial interpretations have validated the validity of the PMLA and acknowledged its essential role in addressing the intricacies of financial crimes. Nevertheless, cases such as those involving Manish Sisodia and Vijay Madanlal Choudhary have underscored the potential for misuse, arbitrary detention, and abuses of fundamental rights. These incidents underscore the pressing necessity for a comprehensive strategy that safeguards constitutional principles while prioritizing enforcement efficacy.
The paper proposes pragmatic reforms that reconcile the objectives of the PMLA with personal freedoms. A three-tiered bail structure is recommended, differentiating requirements according to the weight of the evidence to achieve equity and proportionality in enforcement. Moreover, instituting monetary thresholds under Section 45 to differentiate between minor and significant violations could align the PMLA with international best practices and alleviate the undue burden on legal and investigative frameworks. These measures would concentrate enforcement resources on significant financial crimes and reduce the likelihood of disproportionate penalties for minor offenders.
