SECTION 45 AND TWIN TEST (Syllabus GS Paper 3 – Economy/Internal Security)

News-CRUX-10     22nd June 2024        
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Context: The Delhi High Court has stayed a trial court's decision to grant bail to the Delhi Chief Minister, who faces charges under the Prevention of Money Laundering Act (PMLA), following a challenge by the Enforcement Directorate (ED) citing the court's failure to apply the required 'twin test' for bail under PMLA.

Section 45 and Twin Test

  • Section 45 of the PMLA: It  lays down stringent conditions for granting bail, emphasizing that bail is the exception rather than the norm for offences under this law.
  • The Twin Test Requirement: In bail applications under the PMLA, courts must apply a "twin test" when the public prosecutor opposes bail. This test necessitates two key considerations:

oReasonable Grounds for Innocence: The court must assess whether there are reasonable grounds to believe that the accused is not guilty of the offence.

oLikelihood of Reoffending: It must also determine whether the accused is unlikely to commit any offence while on bail.

  • Comparative Legislation: Similar provisions are found in other laws dealing with serious crimes, such as drug trafficking and terrorism, illustrating a broader legal approach to restrict bail in cases deemed highly detrimental to public interest.
  • UAPA Example: The Unlawful Activities Prevention Act (UAPA) imposes strict bail conditions akin to the PMLA, ensuring that bail is not granted unless the court finds the accusations prima facie true or determines exceptional circumstances warranting release.

Legal challenges to twin test

  • Nikesh Tarachand Shah v Union of India (2017): The court ruled the bail provision unconstitutional due to unreasonable conditions, citing violations of the right to equality.
  • Parliamentary Response: Finance Act, 2018: Parliament reintroduced the provisions through an amendment, prompting fresh legal challenges across various High Courts and eventually the Supreme Court.
  • Vijay Madanlal Choudhary v Union of India (2022): A three-judge Bench of supreme court disagreed with the earlier ruling, emphasizing the seriousness of money laundering and its implications for national security.