PMLA Bail After Vijay Madanlal: The Twin-Conditions Question
The Supreme Court's judgment in Vijay Madanlal Choudhary v. Union of India (2022) reshaped the bail jurisprudence under the Prevention of Money Laundering Act. The post-judgment line of authority has worked through the practical consequences with a measure of inconsistency that practitioners must navigate carefully.
The framework
Section 45 of the Prevention of Money Laundering Act, 2002 imposes "twin conditions" on the grant of bail in PMLA matters: the Public Prosecutor must be given an opportunity to oppose, and the court must be satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and that the accused is not likely to commit any offence while on bail.
The twin conditions were struck down in 2017 by the Supreme Court in Nikesh Tarachand Shah, on the ground of arbitrariness under Article 14. Parliament re-enacted them through the Finance Act 2018 amendment, which the Supreme Court upheld in Vijay Madanlal Choudhary in 2022.
Vijay Madanlal: the holding
The Vijay Madanlal Court held that the twin conditions, as re-enacted, do not violate Article 14 or Article 21. The Court emphasised the special character of the offence of money laundering — its nexus with terrorism, organised crime and economic offences — as justification for the stricter bail standard.
The Court also held that the constitutional protections under Articles 20(3) and 21 do not apply with full vigour to PMLA proceedings at the stage of recording statements under Section 50, given that PMLA proceedings are not, at that stage, "criminal" in the constitutional sense.
The post-judgment landscape
Vijay Madanlal was a constitutional decision. Its application to individual bail matters has been worked through in a substantial body of subsequent High Court and Supreme Court authority, with three principal threads emerging.
The "broad probabilities" thread
One line of authority has read the twin conditions as requiring a court to consider only "broad probabilities" at the bail stage, rather than adjudicating on guilt. The court must form a tentative view based on materials on record — the prosecution complaint, the documents annexed, the statements recorded — without trespassing into trial-stage findings.
This thread has resulted in bail being granted in matters where the documentary nexus between the accused and the proceeds of crime was tenuous, despite the satisfaction-of-twin-conditions standard.
The "first-principle reading" thread
A second line has read the twin conditions strictly. Bail is denied unless the court can affirmatively form the view, on the materials before it, that there are reasonable grounds for believing the accused not guilty. The threshold is high; mere weakness in the prosecution case is not sufficient.
This thread has resulted in bail being denied in matters where the prosecution's documentary evidence, even if not conclusive, was sufficient to establish a prima facie connection to proceeds of crime.
The "personal liberty" thread
A third line, particularly visible in Supreme Court decisions, has emphasised personal liberty under Article 21 even within the PMLA framework. Where the accused has been in custody for an extended period without trial, where the trial is unlikely to be concluded within a reasonable time, or where the materials on record do not justify continued custody, the Supreme Court has granted bail without working through the twin conditions in detail.
The Manish Sisodia, Sanjay Singh and Senthil Balaji decisions illustrate this thread.
The twin conditions of Section 45 are constitutionally valid. Their application is not. Practitioners must read each bail order against its facts before relying on it as authority.
Practical observations
Three working observations from current practice. First: the bail application must engage with the twin conditions head-on. A bail application that argues only on traditional grounds (parity, sickness, period of custody) without addressing Section 45 will be dismissed.
Second: the documentary defence must be marshalled at the bail stage. The court is making a probabilistic assessment on the prosecution's case; the accused's documentary defence is the principal counter-weight. Statements under Section 50, banking records, third-party transactions, communications — all of it must be marshalled if it supports the defence.
Third: the personal-liberty argument under Article 21 has gained traction in recent Supreme Court orders. Where the accused has been in custody for over a year, where the trial is moving slowly, where the "broad probabilities" thread might support release — that thread should be argued in conjunction with the twin-conditions analysis, not in isolation.