New Delhi: On 5 Jan 2026, the Supreme Court’s order denying bail to activists Umar Khalid and Sharjeel Imam while releasing five others drew criticism (here and here) from a wide spectrum of political and legal commentators, including former Supreme Court judges.

Yet the controversy points to a deeper structural problem: the steady expansion in the scope of the Prevention of Money Laundering Act (PMLA), 2002, and the Unlawful Activities (Prevention) Act (UAPA), 1967.

National security and financial stability are the twin pillars of any sovereign nation. In India, the laws related to these, specifically the PMLA and UAPA, have undergone a seismic shift over the past two decades.

Both laws were initially conceived as special legislative instruments to tackle specific high-stakes financial and national security issues like transnational drug trafficking and secessionist insurgencies.

They are no longer extraordinary legislation to tackle extraordinary threats. Their ever-widening scope has deviated from their original mandates, a transition significantly facilitated and exacerbated by judicial deference.

The Supreme Court has cleared amendments that, many argue, violate constitutional rights, specifically Vijay Madanlal Choudhary vs Union of India (2022) in the PMLA and National Investigation Agency vs Zahoor Ahmad Shah Watali (2019) in the UAPA.

Vijay Madanlal allowed the government to equate money laundering with terrorism, reversed the presumption of innocence, and made bail the exception rather than the rule in money-laundering cases. Watali held that at the bail stage under the UAPA, courts must accept the prosecution’s case on its face and cannot weigh evidence, effectively making bail nearly unattainable in terror cases

The scale of this transformation is evident in the numbers: UAPA arrests surged from 1,948 in 2019 to 2,914 in 2023, a 49.6% increase in four years. Yet in 2022, only 41 people were convicted out of 2,636 arrested, a conviction rate of 1.6%.

Similarly, while the Enforcement Directorate claims a 96% conviction rate under the PMLA, this figure is based on just 25 trials completed out of 5,906 cases registered—only 0.42% of all cases. Of 513 arrests, only 45 persons have been convicted, yielding an actual conviction rate of 8.77%.

The Context

To understand the expanding scope of the PMLA and the UAPA, it is necessary to situate them in the context of their enactment. 

The PMLA emerged from the global anti-narcotics push of the late 1990s, when governments converged on the view that the most effective way to dismantle transnational drug cartels was to choke off their financial networks.

The genesis of the PMLA can be traced to the ‘Political Declaration and Global Programme of Action’ adopted by the United Nations General Assembly in 1990 and the subsequent ‘Special Session on Countering the World Drug Problem’ held in June 1998.

The 1998 UN Political Declaration urged member states to create mechanisms to prevent financial institutions from being used to launder drug-related money and to enact comprehensive laws to confiscate proceeds derived from such offences—an approach faithfully mirrored in the PMLA’s statement of objects and reasons. 

Money laundering was framed as a threat to the “integrity and sovereignty of nations”, and the legislative intent was explicit: to confer extraordinary powers of attachment, seizure and a reverse burden of proof to combat transborder, drug-linked money laundering. The term “proceeds of crime” was thus originally conceived in this narrow context.

Global Genesis

With the UN’s growing focus on narcotics, the Financial Action Task Force, established at the G7 Summit, began setting international standards to combat money laundering. 

The FATF promoted a global anti–money laundering framework and the creation of regional bodies such as the Asia/Pacific Group on Money Laundering. Over time, however, alignment with FATF recommendations was invoked to justify expanding the PMLA far beyond its original focus on drug trafficking.

While the PMLA emerged from this international campaign against illicit finance, the UAPA has a distinctly domestic lineage. Enacted in the 1960s, it responded to a decade marked by the Dravidian movement in the south and rising insurgency in the North East. Its original purpose was to preserve India’s territorial integrity by empowering the state to declare and ban “unlawful associations.”

The expansion and weaponisation of the UAPA, however, is largely a post-2004—and more sharply, post-Mumbai terror attacks—phenomenon.

Both the PMLA and the UAPA were thus enacted as extraordinary laws to address exceptional threats. Over time, they have drifted from their original mandates, steadily lowering the high thresholds that once justified their exceptional character. 

This dilution has enabled scope creep, allowing both laws to intrude into the domain of ordinary criminal justice through ever-expanding offence definitions and the inclusion of an ever-widening array of crimes under their ambit.

PMLA, 2018 : A Limitless Expansion

The PMLA is built on a predicate-offence model: the offence of money laundering cannot exist independently of a primary, or scheduled, offence that generates the “proceeds of crime.” 

At inception, this schedule was narrowly drawn, confined to grave crimes such as waging war against the state, narcotics offences under the NDPS Act, and arms trafficking.

Over successive amendments, this narrowly tailored schedule has expanded dramatically to include corruption, cheating, forgery, criminal conspiracy, fraud—156 offences under 30 laws, transforming a law aimed at transnational organised crime into one that routinely attaches itself to everyday policing and prosecution.

As a result, even a routine property dispute can now be escalated into a money-laundering investigation. The inclusion of violations under statutes such as the Biological Diversity Act, 2002, the Copyright Act, 1957, the Trade Marks Act, 1999, and the Wildlife (Protection) Act, 1972, has further strained any connection between these offences and the PMLA’s original objective of targeting drug money.

The most consequential expansion came in 2018, when the Prevention of Corruption Act 1988 was added to the Schedule. 

While corruption is undeniably grave, this single amendment enabled the PMLA to be routinely deployed against public servants and politicians, marking a decisive shift in the law’s reach—from combating transnational organised crime to becoming a central instrument of domestic criminal enforcement.

UAPA, 2019: Individualising Terror

The expansion of the UAPA’s scope reached a critical point with the enactment of the Unlawful Activities (Prevention) Amendment Act, 2019. 

The amendment authorised the union government to designate individuals, and not merely organisations, as terrorists by adding their names to the Fourth Schedule of the Act. Until then, the power to proscribe terrorist activity was confined to organisations alone.

The stated justification for this shift was the need to address so-called “lone wolf” attackers and to prevent banned organisations from reconstituting themselves under new names or splinter groups.

This power raises grave concerns because it allows the government to designate an individual as a terrorist without any trial or conviction, triggering social ostracism, reputational damage and loss of livelihood in the absence of judicial adjudication. 

This legislative drift is not merely theoretical: activists, journalists and others have repeatedly been incarcerated (here, here and here) for years without trial under the UAPA, as Article 14 has frequently reported.

Judicial Endorsement

While the legislative expansion of these laws is troubling, their transformation into instruments of political intimidation has been made possible by the Supreme Court’s retreat from its role as the sentinel on the qui vive. 

By repeatedly failing to impose an effective constitutional check on executive overreach, the Court has facilitated this shift.

This judicial abdication can be traced along two axes: the constitutional validation of draconian statutory provisions, and the systematic dilution of bail jurisprudence.

The Supreme Court also upheld section 45’s stringent twin bail conditions under the PMLA, effectively reversing the presumption of innocence and legitimising pre-trial detention as punishment. 

It declined to meaningfully examine the expansive definition of “proceeds of crime”, accepting the government’s position that any property derived from criminal activity would suffice, without assessing the impact of this reading when combined with an ever-expanding schedule of predicate offences. 

This deference has emboldened the Enforcement Directorate to invoke the PMLA in cases far removed from the law’s original focus on transnational drug trafficking, as Article 14 has reported.

A similar pattern is evident under the UAPA. In Watali, the Court upheld section 43D(5)’s stringent bail regime, citing the seriousness of terrorist offences, but failed to articulate workable standards for its application—leaving trial courts with little real discretion. 

Although Union of India vs K. A. Najeeb (2021) briefly signalled a course correction by affirming that prolonged incarceration without trial violates Article 21, this has remained an exception.

Wide, Unguided Powers

Subsequent decisions, including the denial of bail to Umar Khalid and Sharjeel Imam, reflect a return to judicial restraint. 

In doing so, the Court has endorsed an expanded understanding of “terrorism” that risks collapsing ordinary crimes and political protest into the UAPA’s exceptional framework, thereby vesting wide, unguided discretion in investigating agencies.

Taken together, these decisions have fundamentally reshaped India’s bail jurisprudence: bail is no longer the rule. 

The twin conditions imposed by section 45 of the PMLA and section 43D(5) of the UAPA create a burden that is nearly impossible for an accused to discharge, particularly while investigations are ongoing and the prosecution controls access to evidence. 

As a result, prolonged pre-trial incarceration has become the norm in PMLA and UAPA cases, with bail—if granted at all—often coming only after years in custody.

This regime erodes the presumption of innocence and undermines the right to a speedy trial guaranteed under Article 21. 

The distortion is compounded by a growing tendency of courts to effectively convict and sentence under the guise of bail orders—a practice that has now begun to seep beyond PMLA and UAPA into the ordinary criminal justice system.

A Makeover

As we noted, laws initially aimed at tackling global drug trade and secessionist movements have now been repurposed into a domestic policing framework that treats ordinary financial irregularities, political opposition, and ideological dissent as existential threats to the nation.

The ‘extraordinary’, validated by judicial remiss, has become ‘ordinary’ and the ‘state of exception’ threatens to become the ‘rule’. To re-establish the link between these laws and their original mandate, some recalibrations are required.

First, Parliament must immediately review the Schedule to the PMLA and remove non-serious crimes, such as copyright violations, trademark disputes, and other offences under the IPC. The PMLA should be reserved for its original purpose: combating the laundering of proceeds from serious, cross-border crimes.

Second, the Supreme Court must revisit its Vijay Madanlal and Watali judgments so that a bail hearing is not reduced to a mere rubber-stamping of the prosecution’s claim.

Third, the principle of proportionality, i.e. whether less restrictive alternatives could achieve the same objective, must be rigorously applied, and the prosecution must be required to demonstrate that the case genuinely falls within the narrow categories of offences that these laws were designed to address.

Finally, there should be a statutory provision for automatic bail if the trial in PMLA or UAPA cases does not commence within a fixed period (e.g., one year) or if it is not concluded within a reasonable timeframe (e.g., three years), ensuring that indefinite detention without conviction becomes a legal impossibility.

(Bhavik Kaushik is an assistant professor of law, with an interest in constitutional and criminal law, at Lloyd Law College, Greater Noida.)

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