Context: 

The Supreme Court of India recently examined the issue of bail under the Prevention of Money Laundering Act (PMLA), particularly the exception for women under Section 45. This ruling clarifies how women accused of money laundering are treated under the law.

About the case:

Shashi Bala, a government school teacher, was accused of aiding the Shine City Group in a money laundering scam. The Enforcement Directorate (ED) alleged she received over Rs 36 lakh from the fraud. Despite the gravity of her role, the Allahabad High Court denied her bail in September 2024, stating she didn’t qualify as a “vulnerable woman” under the exception in Section 45.

The Supreme Court’s Stand

The Supreme Court, on January 15, 2025, criticized the ED's argument that the exception for women should not apply to Bala. Justices A S Oka and Augustine George Masih questioned the ED’s interpretation of the law, highlighting that women are entitled to bail under Section 45 unless there are exceptional circumstances such as being a flight risk or tampering with evidence. The Court granted Bala bail, reinforcing the principle that women are not subject to the same stringent conditions as other accused, unless justified.

The Legal Framework of PMLA Bail Provisions:

Section 45 of PMLA stipulates strict conditions for granting bail, requiring the accused to prove that there is no prima facie case against them.

However, the exception allows women, minors, and the sick to be granted bail at the discretion of the Special Court.

This provision is debated in terms of whether it applies universally to women or if certain women, such as well-placed or educated ones, should be excluded.

Key Legal Precedents on Women and Bail under PMLA

• In 2023, Delhi High Court granted bail to Preeti Chandra, rejecting the ED’s argument that she was not a “household lady,” reaffirming that all women are entitled to the exception unless other factors apply.
• In 2024, Kavitha, a BRS leader, was denied bail by a Delhi trial court for not being a "vulnerable" woman. However, the Supreme Court later granted her bail, reinforcing that the exception applies to all women, barring specific exceptions.

About Prevention of Money Laundering Act, 2002 (PMLA)

The Prevention of Money Laundering Act (PMLA), 2002 is a law enacted by the Parliament of India to prevent and combat money laundering activities.

Key Provisions of PMLA

·        Section 3 defines money laundering as any attempt, assistance, or involvement in processes connected to the proceeds of crime to project it as untainted property.

·        Section 4 underlines punishment for money laundering.

·        The offence of money laundering shall be punishable with rigorous imprisonment for a term not less than three years extending to seven years and shall also be liable to a fine.

·        Attachment and Confiscation of Property: It allows for the attachment and confiscation of property involved in money laundering.

·        It mandates entities, such as banks and financial institutions, to maintain records of transactions and report suspicious transactions to the Financial Intelligence Unit (FIU).