Column | Redefining liberty: Changing white-collar jurisprudence and its impact on bail strategy

Securing bail under the Prevention of Money Laundering Act (PMLA), 2002, can be challenging as the requirement for relief extends beyond the usual “triple-test” and demands compliance with the “twin conditions” under Section 45(1) (bar on bail for cognisable and non-bailable offences) of the law. The Supreme Court endorsed these stringent conditions in its landmark ruling in Vijay Madanlal Choudhary (2022), where it conceptualised money laundering as a serious economic threat. Post-2022, rulings on the issue have further redefined this high-stakes threshold. It is, therefore, important to take a closer look at the post-Vijay Madanlal Choudhary evolution of PMLA bail jurisprudence and analyse how bail hearings nowadays also involve references to the statutory rigour against constitutional safeguards and the fundamental presumption of innocence.

The conditions for grant of bail in PMLA offences are statutorily more rigid and difficult to satisfy, unlike the conventional offences under the Indian Penal Code, wherein, primarily, only the famous “triple-test” conditions are required to be satisfied, being (1) that the accused should not be a flight risk, (2) he shall not tamper with evidence or influence witnesses, and (3) he shall be available for investigation/trial.

In PMLA cases, Section 45(1) of the PMLA also requires, firstly, an “opportunity” to the public prosecutor to oppose the bail application. Secondly, the court should have “reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail”. These two additional conditions are famously called “twin conditions of bail”.

More importantly, similar twin conditions for securing bail are found in other special legislations, such as Section 37(1)(b) of the Narcotic Drugs and Psychotropic Substances (NDPS) Act, 1985, Section 212(6) of the Companies Act, 2013, Section 43D(5) of the Unlawful Activities Prevention Act (UAPA), 1967, and Section 21(4) of the Maharashtra Control of Organised Crime Act (MCOCA), 1999.

Arguably, such “twin conditions” reverse the presumption of innocence and thus run contrary to the ethos of the Indian Constitution. However, the Supreme Court, in the landmark judgment in Vijay Madanlal Choudhary (2022), upheld the constitutionality of these twin conditions while highlighting money laundering as a heinous economic crime.

Prolonged incarceration and no possibility of trial

The Supreme Court in Manish Sisodia vs Directorate of Enforcement (2024) reiterated and reinforced the principle laid down in Gudikanti Narasimhulu (1978) and K A Najeeb (2021) that prolonged incarceration – coupled with the fact that there is no possibility of expeditious commencement and conclusion of trial in the foreseeable future – is a valid ground for bail.

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It was further held that in such cases of substantial incarceration, the rigors of twin conditions will “melt down”. The said judgment was followed by the High Court of Delhi in the judgment of Sameer Mahandru vs Directorate of Enforcement (2024), among other cases.

As a result, bail applications nowadays frequently raise the ground of prolonged incarceration without the possibility of the start or conclusion of a trial in the near future, which violates the guarantee of the right to a speedy trial under Article 21.

Non-supply of proper grounds or reasons of arrest

In the judgment of Pankaj Bansal vs Union of India (2023), which was also a case involving PMLA offences, the Supreme Court held that a copy of written grounds of arrest is mandatorily required to be furnished to the arrested person as a matter of course and without exception.

Similarly, the Supreme Court in Prabir Purkayastha (2024), relying on the said judgment of Pankaj Bansal, carved out a critical distinction between “reasons of arrest” and “grounds of arrest”, wherein the former are formal parameters while the latter is factual and specific to the arrestee, and reiterated that the same have to be supplied to the arrestee.

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Importantly, grounds and reasons of arrest are required to be supplied to the arrestee not only in PMLA and UAPA cases but also in conventional IPC offences, as held by the Apex Court in the judgment of Vihaan Kumar (2025) and Mihir Rajesh Shah (2025), and are also required to be furnished to the family of the arrestee.

As a result, the bail applications being drafted now more frequently feature the ground of illegal arrest due to non-supply of proper “grounds of arrest” or “reasons of arrest” to the accused person or to his family, the same being violative of Article 22 of the Indian Constitution and sections 50 and 50-A of the Criminal Procedure Code (CrPC) – now sections 47 and 48 of the Bharatiya Nagarik Suraksha Sanhita (BNSS).

Reliability of PMLA co-accused’s statement

Another distinct characteristic of PMLA proceedings is that, unlike statements recorded under CrPC Section 161, the statements recorded under PMLA Section 50 by the investigating authorities are considered admissible in law and can be used against the accused at later stages.

But post the judgment of the High Court of Delhi in Preeti Chandra vs the Directorate of Enforcement in 2023, followed in Sanjay Jain (2024), the bail applicants have been vociferously contesting that statements recorded under PMLA Section 50, being inherently self-contradictory and unsubstantiated, cannot be the sole basis for rejecting the bail application of an accused.

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In the judgment of Sanjay Jain, it was held that when such statements recorded under PMLA Section 50 are “patently self-contradictory” or “two separate statements of the same witness are inconsistent with each other on material aspects”, the same will be a relevant consideration at the stage of bail and its benefit will enure to the bail applicant. The judgment of Sanjay Jain also held that the statement of a co-accused is not a substantive piece of evidence and can only be used for corroboration purposes.

No nexus between predicate offence, proceeds of crime

The Vijay Madanlal judgment made it amply clear that for any property to be called “proceeds of crime”, such “property must be derived or obtained, directly or indirectly, “as a result of” criminal activity relating to a scheduled offence.”

Proceeds of crime refers to ill-gotten money generated from a predicate offence (also known as a scheduled offence). Thus, any unaccounted money, which is not obtained from a predicate offence, is not proceeds of crime.

Relying on Vijay Madanlal, the High Court of Delhi, in the judgment of Parvez Ahmed (2024), granted bail to an accused and held, “The proceeds of crime have to be generated as a result of criminal activity (scheduled offence)”.

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The bail applications, therefore, more frequently include the ground that the prosecution has failed to show that the alleged proceeds of crime have been derived or obtained from the alleged predicate offence.

The logical corollary of the argument is that when the proceeds of crime have not been established, which is a central ingredient to constitute the offence of money-laundering under Section 3 of the PMLA, then the offence under the PMLA cannot survive.

Mandatory affidavit of disclosing criminal antecedents

The most recent development was introduced in the 2026 case of Zeba Khan, where the Supreme Court mandated that every bail application, including PMLA offences, must be accompanied by an affidavit disclosing details of “criminal antecedents and the existence of any coercive processes such as issuance of non-bailable warrants, declaration as a proclaimed offender, or similar proceedings”, etc, of the person seeking bail.

The review of Vijay Madanlal Choudhary is pending before the apex court in the case of Karti P Chidambaram and connected cases, primarily on two central issues – non-supply of the Enforcement Case Information Report or ECIR (basically, the first information report) to the accused persons and, second, the constitutional validity of reverse burden of proof envisaged under Section 24 of the PMLA. A Supreme Court ruling on the issues would further impact how bail applications are drafted.

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Dhruv Gupta is a criminal defence lawyer practising in the national capital.

Written by eminent law professionals, the Legal Minds Column aims to break down complex statutory frameworks into insights, both for members of the fraternity and the general public.

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