SC criticises ED over bail conditions for women in money laundering cases

PTI, Jan 16, 2025, 2:01 PM IST

The Supreme Court has strongly criticised the Enforcement Directorate for submitting that rigorous bail conditions in money laundering cases will apply to women despite a statutory exception explicitly provided under the law.

A bench comprising Justices Abhay S Oka and Augustine George Masih, while hearing the bail plea of Shashi Bala, a government school teacher accused in a money laundering scam involving the Shine City Group of Companies, called the ED’s submissions “contrary to statute” and emphasised that such arguments would not be tolerated.

“We will not tolerate conduct… to make submissions contrary to statute,” the bench said and granted bail to Bala in the case, saying she had been in custody since November 2023 and there was little likelihood of her trial concluding anytime soon.

“If people who appear for the Union of India do not know basic provisions of law, why should they appear in the matter,” the bench said on Wednesday.

The ED argued that the stringent bail conditions under the Prevention of Money Laundering Act (PMLA), 2002, should apply to women.

Section 45 of the PMLA imposes stringent conditions for granting bail in money laundering cases, requiring the accused to prove that there is no prima facie case against them and that they are unlikely to commit another offence while on bail.

However, the law includes a notable exception for certain categories of individuals.

The proviso to Section 45(1) states that “a person, who is under the age of sixteen years or is a woman or is sick or infirm, may be released on bail if the Special Court so directs.” Various judgements have held that the exception under Section 45 applies universally to all women, irrespective of their occupation, education, or social background, provided they are not a flight risk or likely to tamper with evidence.

As per the details of the case, the Shine City Group, based in Lucknow, is accused of defrauding the public of Rs 800-1000 crore through fraudulent investment schemes promising high returns.

Investigations by the ED revealed that over 554 FIRs were registered against the group and its promoter, Rasheed Naseem, who is currently absconding.

Bala was made an accused as she was allegedly a key associate of Naseem.

According to the ED, she played a role in laundering proceeds of the crime and received over Rs 36 lakh as part of the fraudulent scheme.

She was arrested in November 2023 and subsequently denied bail by the Allahabad High Court in September 2024, which argued that her alleged close association with Naseem and the scale of the fraud negated her claim to being a “vulnerable woman” eligible for bail under the exception.

Bala moved the top court for bail.