1. ISSUES PRESENTED AND CONSIDERED

(i) Whether, upon approval of a resolution plan under Section 31 of the Insolvency and Bankruptcy Code, 2016, the immunity under Section 32A bars continuation of attachment proceedings and requires lifting of a provisional attachment of the corporate debtor's property (including "attachment, seizure, retention or confiscation") in relation to pre-CIRP offences.

(ii) Whether the writ jurisdiction should be declined on the ground of availability of alternate statutory remedies under the Prevention of Money-Laundering Act, 2002, when the impugned attachment is asserted to be contrary to the mandate of Section 32A of the Insolvency and Bankruptcy Code, 2016.

(iii) Whether an order confirming a provisional attachment is unsustainable where the enforcement agency's own complaint asserts modification/lifting of attachment on immovable assets and seeks attachment of a different form of alleged proceeds, yet the adjudicating authority confirms the original provisional attachment "in its original form".

2. ISSUE-WISE DETAILED ANALYSIS

Issue (i): Effect of Section 32A (IBC) on attachment under PMLA after approval of resolution plan

Legal framework (as discussed by the Court): The Court analysed Section 32A of the Insolvency and Bankruptcy Code, 2016 as a non-obstante provision triggered upon approval of a resolution plan under Section 31. Section 32A(1) provides that the liability of the corporate debtor for offences committed prior to commencement of CIRP shall cease and the corporate debtor shall not be prosecuted from the date of plan approval, subject to the plan resulting in change in management/control to a person not falling within the disqualifying categories. Section 32A(2) bars action against the property of the corporate debtor in relation to pre-CIRP offences where the property is covered under the approved plan, and its Explanation clarifies that "action" includes attachment.

Interpretation and reasoning: The Court held that the immunity under Section 32A is conditioned on a successful resolution plan resulting in a complete change in the character of ownership and control. Once the ingredients of Section 32A are met, the corporate debtor obtains statutory immunity from prosecution for pre-CIRP offences, while persons responsible for the offence (other than the corporate debtor) remain liable. Consistently, Section 32A(2) extends protection to the corporate debtor's property covered under the approved plan, expressly including protection from attachment. The Court reasoned that, after plan approval meeting Section 32A parameters, attachment "either provisionally or otherwise" cannot continue "even for a day longer".

Conclusion: The provisional attachment and its confirmation were held unsustainable because, after approval of the resolution plan under Section 31 satisfying Section 32A's conditions, the attachment of the corporate debtor's property could not lawfully continue.

Issue (ii): Maintainability of writ petition despite alternate remedy under PMLA

Legal framework (as discussed by the Court): The Court noted the contention that statutory remedies (including appeal provisions and other relief mechanisms) were available under the Prevention of Money-Laundering Act, 2002, but reiterated the settled position that existence of an alternate remedy does not, by itself, bar exercise of writ jurisdiction, and that recognised exceptions permit writ intervention.

Interpretation and reasoning: The Court found the case fit for writ interference because the authorities had not lifted the attachment despite the "clear mandate" of Section 32A of the Insolvency and Bankruptcy Code, 2016. This failure rendered the alternate-remedy objection unsuitable for relegating the petitioner to statutory forums in the circumstances.

Conclusion: The Court rejected the alternate remedy objection and entertained the writ petition, holding the objection "stated only to be rejected" on the facts.

Issue (iii): Unsustainability of confirmation order when the complaint asserts modification of attachment but confirmation is in original form

Legal framework (as discussed by the Court): The Court examined the scheme where a provisional attachment under Section 5 of the Prevention of Money-Laundering Act, 2002 is followed by a complaint under Section 5(5) for confirmation by the adjudicating authority.

Interpretation and reasoning: The Court noted that, in the complaint filed for confirmation, the enforcement agency itself asserted that the alleged proceeds had "changed form" and stated that the earlier attachment on land/property stood lifted and that a monetary amount (sale proceeds under the approved resolution plan) was to be treated as provisionally attached. Despite this, the adjudicating authority confirmed the provisional attachment order "in its original form". The Court held that this inconsistency independently rendered the confirmation order unsustainable.

Conclusion: The confirmation order was quashed as unsustainable, inter alia because it confirmed an attachment in a form inconsistent with the enforcement agency's own stated modification in the confirmation complaint.

Final dispositive outcome (as decided): The Court allowed the writ petition and set aside/quashed (insofar as they pertained to the corporate debtor and its assets) the enforcement case information record, the provisional attachment order (including as modified), the show cause notice, the original complaint, and the adjudicating authority's confirmation order.

Issues: Whether the petitioner was entitled to bail in a prosecution under the Prevention of Money Laundering Act, 2002 having regard to the twin conditions for bail, the presumption relating to proceeds of crime, and the prolonged period of pre-trial incarceration coupled with delay in trial.

Analysis: The petition turned on the interplay between the statutory rigour of section 45 of the Prevention of Money Laundering Act, 2002 and the constitutional mandate of personal liberty under Article 21 of the Constitution of India. The material against the petitioner rested substantially on statements recorded under section 50 of the Prevention of Money Laundering Act, 2002 and on alleged recovery of documents and assets, but the Court treated the truth and veracity of that material as matters for trial. The Court also applied the statutory presumption under section 24 of the Prevention of Money Laundering Act, 2002 while noting that the Enforcement Directorate must first establish the foundational facts before the onus shifts to the accused. In assessing bail, the Court relied on the principles governing bail, including broad probabilities, nature of accusation, possibility of influencing witnesses, and the constitutional concern against punishment through prolonged pre-trial detention. It further considered that the petitioner was a first-time offender, had remained in custody for a substantial period, the trial involved voluminous evidence and numerous witnesses, and there was little likelihood of early conclusion of trial. The Court also considered the amended custodial-release principle reflected in section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 and the corresponding relaxation of section 436A of the Code of Criminal Procedure, 1973.

Conclusion: The petitioner satisfied the balance of considerations for bail and was held entitled to release on bail.

Ratio Decidendi: Where prolonged under-trial detention is substantial and early conclusion of trial is unlikely, constitutional liberty may justify grant of bail even in a stringent money-laundering prosecution, subject to the Court's satisfaction on the statutory safeguards and appropriate conditions.

Issues: Whether the Special Court can be directed to conduct simultaneous trial of the PMLA case and the predicate offence, and whether pendency of the predicate offence bars continuation of the PMLA trial.

Analysis: Section 44 of the Prevention of Money Laundering Act, 2002 was treated as the controlling provision governing trial of money-laundering offences and connected scheduled offences. The explanation to Section 44 was applied to hold that the Special Court's jurisdiction to deal with the PMLA offence is not dependent on orders passed in the scheduled offence, and that trial of both sets of offences by the same court is not to be construed as a joint trial. The Court relied on the settled position that money-laundering is an independent and stand-alone offence, and that the pendency of the predicate offence does not disable the Special Court from proceeding with the PMLA case. On that footing, there was no legal basis to compel a simultaneous trial at the instance of the accused.

Conclusion: The request for a direction to conduct simultaneous trial was rejected, and the PMLA trial was held to be maintainable independently of the pending predicate offence.

Ratio Decidendi: Prosecution under the PMLA is independent of the predicate offence, and Section 44 does not require simultaneous trial or make the Special Court's jurisdiction dependent on the progress or outcome of the scheduled offence.

The core legal questions considered by the Court in this judgment include:

- Whether the petitioner is entitled to bail on the ground of parity with a co-accused who was granted bail.

- Whether the petitioner's prolonged detention without trial justifies grant of bail under constitutional and statutory provisions.

- Whether the petitioner's prima facie involvement in offences under the Prevention of Money Laundering Act, 2002 (PMLA) and the Prevention of Corruption Act, 1988, read with relevant sections of the Indian Penal Code, is established sufficiently to deny bail.

- The applicability and interplay of provisions under the PMLA, the newly enacted Bharatiya Nagarik Suraksha Sanhita, 2023 (specifically section 479), and constitutional protections under Article 21 regarding speedy trial and personal liberty.

- The relevance of the nature and gravity of economic offences, especially corruption-related offences, in the consideration of bail applications.

- The weight to be accorded to the stage of investigation and trial, including whether investigation is complete and whether trial delay is attributable to the accused.

- The conditions and safeguards that may be imposed on bail to prevent tampering with evidence or influencing witnesses.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail on Parity with Co-accused

The petitioner sought bail on the ground of parity with a co-accused, Manik Bhattacharyya, who was granted bail by this Court. The petitioner argued that since the co-accused was enlarged on bail, he too should be granted similar relief.

The Enforcement Directorate (ED) opposed this, highlighting differences in the period of detention and the stage of investigation. The Court noted that Manik Bhattacharyya had been in custody for approximately 23.4 months before bail was granted, whereas the petitioner had been in custody for about 20 months. The Court found that parity was not automatic and had to be considered along with other factors such as the nature of involvement and stage of investigation.

The Court further observed that the petitioner was implicated later in the investigation and that the investigation against him was complete, unlike the co-accused. Thus, parity was not a sufficient ground alone for bail.

Issue 2: Prima Facie Involvement and Gravity of Offence

The petitioner was charged under sections 7, 7A, and 8 of the PMLA, and sections 120B, 420, 467, 468, 471, and 34 of the IPC, related to corruption and conspiracy in illegal recruitment and money laundering.

The Court examined the detailed allegations, including the petitioner's role in facilitating illegal appointments of candidates in the TET-2014 and other recruitment processes, collecting large sums of money (in crores), and maintaining nexus with other accused.

Evidence included statements recorded under section 50 of the PMLA, bank statements showing large fund transfers, seizure of incriminating documents and electronic devices, and a confrontational statement admitting receipt of Rs. 3.82 crores and Rs. 16 crores for illegal appointments.

The Court relied on the Division Bench's earlier observations that the petitioner played a pivotal role in a "deep and pervasive corruption" scheme affecting constitutional duties related to education. The Court held that prima facie involvement was established and the presumption under sections 22 and 23 of the PMLA applied, precluding a finding of "not guilty" at this stage.

Issue 3: Prolonged Detention and Right to Speedy Trial under Article 21

The petitioner had been in custody for about 22 months without trial, with the last custodial interrogation occurring nearly 20 months prior. The Court noted the case involved complex evidence with approximately 300 witnesses and thousands of pages of documents, making speedy trial unlikely in the near future.

The Court emphasized the constitutional protection under Article 21 for speedy trial and personal liberty, referencing Supreme Court precedents that prolonged incarceration without trial cannot be permitted regardless of the offence's seriousness. The Court referred to the principle that bail is the rule and jail is the exception.

The newly enacted section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023, was considered, which mandates release on bond if a first-time offender has undergone detention for one-third of the maximum imprisonment term. The petitioner was a first-time offender and had nearly completed one-third of the maximum sentence applicable under the PMLA.

The Court acknowledged that while the offence was grave, the delay in trial was not attributable solely to the petitioner, and the investigation was complete, reducing the risk of evidence tampering.

Issue 4: Application of Legal Framework and Precedents

The Court applied the factors laid down by the Supreme Court in Prosanta Kumar Sarkar v. Ashis Chatterjee, including the nature and gravity of the offence, prima facie involvement, likelihood of absconding, and impact on witnesses.

It also considered the special nature of economic offences, which are treated with greater seriousness due to their impact on the national economy and public trust, citing precedents such as Tarun Kumar v. Assistant Director, Directorate of Enforcement and State of Gujarat v. Mohanlal Jitamalji Porwal.

However, the Court balanced these considerations against the constitutional mandate under Article 21 and the statutory provisions of the 2023 Act, which favor bail in cases of prolonged detention.

Competing arguments about the petitioner's role and the strength of evidence were acknowledged, but the Court refrained from delving into merits, emphasizing that such issues are to be adjudicated during trial.

Issue 5: Conditions for Grant of Bail

Given the gravity of the offence and the risk of tampering with evidence or influencing witnesses, the Court imposed stringent bail conditions, including:

• Furnishing a bond of Rs. 10,00,000 with adequate sureties, half of whom must be local.
• Surrender of passport to the trial Court.
• Restriction on leaving the trial Court's jurisdiction without permission.
• Mandatory appearance on all hearing dates.
• Prohibition on tampering with evidence or intimidating witnesses.
• Prohibition on engaging in any criminal activity or contacting witnesses.
• Requirement to provide and maintain a mobile number with the trial Court.

The Court clarified that violation of these conditions would empower the trial Court to cancel bail without further reference.

3. SIGNIFICANT HOLDINGS

The Court held that despite the grave nature of the offences and prima facie involvement of the petitioner, the constitutional right to speedy trial and personal liberty under Article 21, read together with section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023, justified grant of bail due to prolonged detention without trial.

The Court stated verbatim:

"The right to life and personal liberty enshrined under Article 21 of the Constitution is overarching and sacrosanct. A constitutional Court cannot be restrained from granting bail to an accused on account of restrictive statutory provisions in a penal statute if it finds that the right of the accused-under trial under Article 21 of the Constitution has been infringed."

It reaffirmed the principle:

"Bail is the rule and jail is exception."

The Court emphasized that economic offences, while serious and affecting public trust and national economy, must still be balanced against fundamental rights.

On the issue of bail conditions, the Court held:

"Accordingly, the application for bail... is allowed... subject to stringent conditions to secure his attendance as well as deter him from influencing the witnesses of the case."

The Court clarified that its observations were limited to the bail application and did not express any opinion on the merits of the case, leaving the trial Court to independently adjudicate the matter.

In conclusion, the Court granted bail to the petitioner on furnishing bond and subject to strict conditions, recognizing the constitutional imperative of preventing prolonged pre-trial incarceration while safeguarding the integrity of the investigation and trial process.

Issues: (i) Whether the applicant satisfied the twin conditions for bail under the money-laundering statute. (ii) Whether the length of custody and the likelihood of delayed trial justified grant of regular bail despite the statutory restrictions.

Issue (i): Whether the applicant satisfied the twin conditions for bail under the money-laundering statute.

Analysis: The material relied on against the applicant did not show that the invitation letters issued in 2013-2014 had any established nexus with the later predicate offences, nor was there reliable material to show that the applicant had knowledge of, or participation in, the alleged scheduled offence. The alleged transfer of funds to Labquest was treated as a loan transaction on the record, and no material was shown to establish receipt of proceeds in any overseas entity of the applicant. The later email and messaging material was not accepted as sufficient to dislodge the applicant's explanation. On that basis, the Court recorded prima facie satisfaction that the statutory bail conditions stood met.

Conclusion: The twin conditions were treated as satisfied in favour of the applicant.

Issue (ii): Whether the length of custody and the likelihood of delayed trial justified grant of regular bail despite the statutory restrictions.

Analysis: The Court applied the constitutional principle that personal liberty and the right to speedy trial remain relevant even in prosecutions under stringent special statutes. It noted the large number of accused persons, witnesses, and pages of material, the nascent stage of the trial, the custody already undergone, and the absence of material showing that delay was attributable to the applicant. In that backdrop, prolonged incarceration was held to outweigh continued detention pending trial.

Conclusion: Regular bail was warranted in favour of the applicant on the ground of prolonged custody and likely delay in trial.

Final Conclusion: The application for regular bail was allowed, and the applicant was ordered to be released on bail subject to conditions.

Ratio Decidendi: In bail matters under a stringent special statute, statutory restrictions must yield where the court is prima facie satisfied that the accused is not shown to be guilty and continued incarceration would infringe the constitutional right to personal liberty and speedy trial, especially when the trial is unlikely to conclude within a reasonable time.

Issues: Whether bail should be granted in a prosecution under the Prevention of Money Laundering Act, 2002 where the arrest was questioned for non-compliance with the mandatory arrest procedure and the material relied upon consisted primarily of statements of co-accused persons.

Analysis: The Court treated compliance with the arrest safeguards under Section 19 of the Prevention of Money Laundering Act, 2002 as essential and held that the designated officer must record reasons and form an opinion on the basis of material that is legally reliable. It also relied on the principle that a statement recorded under Section 50 of the Prevention of Money Laundering Act, 2002, when the maker is in custody in proceedings of the same investigating agency, is not admissible against the maker. On the facts, the applicant had not been summoned before arrest, no statement had been recorded from him earlier, no material had been called from the licensing authority, and the opinion of guilt was stated to rest mainly on co-accused statements. The Court also noted that no further custodial interrogation was required.

Conclusion: Bail was warranted and the application was allowed.

Issues: Whether regular bail should be granted in a prosecution under the Prevention of Money Laundering Act, 2002 in view of the material collected during investigation and the period of custody already undergone.

Analysis: The application was assessed on the basis of the material indicating alleged diversion of loan funds, inflated turnover, fictitious stock declarations, statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002, and the petitioner's alleged role as an active participant and beneficiary of the proceeds of crime. The Court also considered the argument that prolonged custody and delay in trial justified release, but held that such factors could not by themselves override the statutory restrictions governing bail in PMLA cases. On the material placed, the Court found that reasonable grounds were not made out to believe that the petitioner was not guilty of the offence.

Conclusion: Bail was declined because the statutory conditions for release under Section 45 of the Prevention of Money Laundering Act, 2002 were not satisfied.

Final Conclusion: The petition for regular bail failed on merits, and the petitioner remained in custody pending trial.

Ratio Decidendi: In a PMLA prosecution, bail cannot be granted unless the Court is satisfied that the twin conditions under Section 45 are met; prolonged incarceration or delay in trial, by itself, does not displace that statutory requirement.

Issues: (i) Whether the applicant was entitled to bail in the PMLA case in view of prolonged custody, absence of charge-sheet in the predicate offence, and the constitutional guarantee of speedy trial; (ii) Whether counsel for an accused could directly communicate with the investigating officer in a pending matter by email outside court proceedings.

Issue (i): Whether the applicant was entitled to bail in the PMLA case in view of prolonged custody, absence of charge-sheet in the predicate offence, and the constitutional guarantee of speedy trial.

Analysis: The applicant had been in custody since 07.02.2024, while the predicate offence had not yet progressed to charge-sheet stage. The case rested on alleged proceeds of crime under the PMLA, but the Court treated the possibility of a timely joint adjudication of the predicate and PMLA proceedings as remote. Relying on the settled principle that statutory restrictions on bail do not eclipse constitutional protection under Article 21, the Court held that prolonged incarceration without realistic prospect of early trial completion justified relaxation of the PMLA bail rigour. The Court also noted that the applicant was already on bail in the predicate offence, custodial interrogation was not required, and the risk of absconding was not shown.

Conclusion: The applicant was held entitled to bail and release was directed on conditions.

Issue (ii): Whether counsel for an accused could directly communicate with the investigating officer in a pending matter by email outside court proceedings.

Analysis: The Court found that, once the matter was sub judice and the Enforcement Directorate was represented through counsel, any grievance about non-filing of reply ought to have been raised before the Court rather than by direct communication with the investigating officer. The Court relied on the professional standard that an advocate shall not communicate on the subject matter of controversy with a party represented by an advocate except through that advocate. It held that such direct email communication by the applicant's counsel was not proper.

Conclusion: The objection was upheld and the conduct of the applicant's counsel was disapproved.

Final Conclusion: Bail was granted to the applicant, but the Court also recorded that direct communication by counsel with the investigating officer in the pending proceeding was impermissible and contrary to professional propriety.

Ratio Decidendi: In bail matters under stringent special statutes, constitutional protection of personal liberty and the right to speedy trial may justify release where prolonged incarceration continues without a realistic prospect of timely trial completion, and advocates must channel all communications in a contested matter through the court and opposing counsel rather than directly with the represented investigating agency.

Issues: (i) Whether property acquired before the scheduled offence and otherwise claimed to be untainted could be provisionally attached as proceeds of crime; (ii) whether the provisional attachment order was without jurisdiction for want of recorded reasons to believe under Section 5(1) of the Prevention of Money-Laundering Act, 2002; (iii) whether there was non-compliance with the first proviso to Section 5(1) and the forwarding requirement under Section 5(2) of the Prevention of Money-Laundering Act, 2002; (iv) whether interference was warranted despite the availability of an alternative statutory remedy and the disputed factual matrix.

Issue (i): Whether property acquired before the scheduled offence and otherwise claimed to be untainted could be provisionally attached as proceeds of crime.

Analysis: The expression "proceeds of crime" was held to be of wide amplitude. The definition in Section 2(1)(u) covers not only property derived or obtained from criminal activity relating to a scheduled offence, but also the value of such property. The Court treated the later judicial exposition as making clear that the provision can reach equivalent-value property and that the restrictive view excluding such attachment could not be accepted. The earlier contrary understanding was held to be no longer good law in view of the later authoritative interpretation.

Conclusion: The challenge to attachment on the ground that the properties were acquired before the scheduled offence failed and the issue was decided against the petitioner.

Issue (ii): Whether the provisional attachment order was without jurisdiction for want of recorded reasons to believe under Section 5(1) of the Prevention of Money-Laundering Act, 2002.

Analysis: The Court held that Section 5(1) requires recorded reasons to believe based on material in possession, and on scrutiny of the attachment order found that such reasons had in fact been recorded in writing. The order referred to search material, alleged layering of funds, fake documents, and other circumstances supporting the statutory satisfaction. The order was described as provisional and subject to adjudication, which further supported the validity of the action at this stage.

Conclusion: The attachment order was not invalid for want of reasons to believe and the objection was rejected.

Issue (iii): Whether there was non-compliance with the first proviso to Section 5(1) and the forwarding requirement under Section 5(2) of the Prevention of Money-Laundering Act, 2002.

Analysis: The Court held that filing of a final report in every predicate FIR was not a sine qua non for provisional attachment and that Section 5(1) is attracted where the person is in possession of proceeds of crime likely to be concealed or dealt with to frustrate confiscation. It further held that the first proviso stood satisfied on the facts, including the existence of a complaint by an authorised person and the material connecting the petitioner with the alleged illegal mining and laundering activity. As to forwarding of the order and material, the requirement of immediate transmission was construed reasonably, and a short interval caused by closure of offices on holidays was not treated as fatal.

Conclusion: No breach of the first proviso or the forwarding requirement was found, and the objection failed.

Issue (iv): Whether interference was warranted despite the availability of an alternative statutory remedy and the disputed factual matrix.

Analysis: The Court noted that the attachment was only provisional and that the adjudicating authority under the statute was to examine the matter in the first instance. The presence of disputed questions of fact, together with the statutory remedy and the limited stage of the proceedings, militated against writ interference. The existence of an alternative remedy did not make the writ petition non-maintainable, but it was a relevant factor against granting relief on merits.

Conclusion: No writ interference was warranted on these facts.

Final Conclusion: The challenge to the provisional attachment failed in its entirety, and the petitions were dismissed while leaving the adjudicating authority free to decide the matter independently in accordance with law.

Ratio Decidendi: Under the Prevention of Money-Laundering Act, 2002, "proceeds of crime" includes equivalent-value property, and a provisional attachment is sustainable where the authorised officer records reasons to believe on the basis of material in possession that such property is liable to be concealed, transferred, or otherwise dealt with to frustrate confiscation.

Issues: Whether regular bail should be granted in a prosecution under the Prevention of Money Laundering Act, 2002 where the applicant had remained in custody for a substantial period, the trial was delayed, and the Court had to consider the twin conditions under Section 45 of the Act alongside the constitutional right to personal liberty and speedy trial.

Analysis: The material against the applicant comprised diary entries, bank transactions and a second agreement to sell, but the Court held that the authenticity and evidentiary worth of these materials, including the alleged forgery and the statement recorded under Section 50 of the Prevention of Money Laundering Act, 2002, required appreciation at trial. The Court held that a bail hearing could not become a mini-trial. It also held that the stringent conditions in Section 45 of the Prevention of Money Laundering Act, 2002 cannot operate as an absolute bar where prolonged incarceration is not attributable to the accused and the trial is unlikely to conclude in the near future. The Court relied on the constitutional mandate of Article 21 of the Constitution of India and the settled principle that bail is the rule and jail is the exception.

Conclusion: Regular bail was warranted, as the applicant's continued custody would be unjustified in view of the delay in trial and the constitutional protection of liberty, despite the statutory rigour of Section 45 of the Prevention of Money Laundering Act, 2002.

Ratio Decidendi: In a money laundering case, the rigours of Section 45 of the Prevention of Money Laundering Act, 2002 must yield where prolonged pre-trial incarceration and likely delay in conclusion of trial would defeat the accused's fundamental right under Article 21 of the Constitution of India.

Issues: (i) Whether cognizance had been validly taken on the complaint filed under the Prevention of Money Laundering Act, 2002 despite the absence of a formal cognizance order and the fact that the complaint was followed by further investigation; and (ii) whether Explanation II to Section 44(1)(b) of the Prevention of Money Laundering Act, 2002 permits supplementary complaints and applies retrospectively.

Issue (i): Whether cognizance had been validly taken on the complaint filed under the Prevention of Money Laundering Act, 2002 despite the absence of a formal cognizance order and the fact that the complaint was followed by further investigation.

Analysis: Cognizance under the special statute was held to arise when the Special Court applied its mind to the complaint and proceeded further, and not only when a formal order using the word "cognizance" was passed. The complaint was checked, registered, and copies were supplied to the accused, which showed judicial application of mind. The Court also applied the settled principle that, in proceedings before a Special Court under the special statute, the Criminal Procedure Code applies unless excluded, and that the Special Court must assess whether a prima facie case is made out before proceeding.

Conclusion: Cognizance was validly taken, and the challenge on the ground that no cognizance had been taken was rejected.

Issue (ii): Whether Explanation II to Section 44(1)(b) of the Prevention of Money Laundering Act, 2002 permits supplementary complaints and applies retrospectively.

Analysis: The Court held that the explanation is clarificatory and enables inclusion of subsequent complaints based on further investigation to bring additional oral or documentary evidence against any accused person. It further held that a complaint under the special statute need not await complete culmination of all investigation before being filed, and that the amendment does not create a new substantive right but clarifies the existing position. On that basis, the Court held the provision applicable to the case.

Conclusion: Supplementary complaints are maintainable under the provision, and Explanation II applies retrospectively.

Final Conclusion: The order of the Special Judge was upheld, the petition was dismissed, and the petitioner's objections to cognizance and maintainability failed.

Ratio Decidendi: Under the Prevention of Money Laundering Act, 2002, cognizance by the Special Court is taken on receipt and judicial consideration of the prosecution complaint, and a clarificatory explanation permitting subsequent complaints on further investigation operates retrospectively.

The core legal questions considered in this judgment include:

1. Whether the applicant, Hitesh Gandhi, is entitled to bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, given the circumstances of his arrest and the nature of the allegations against him.

2. Whether the non-supply of the 'reasons to believe' document to the applicant violates Section 19 of the Prevention of Money Laundering Act (PMLA), thus impacting the validity of his arrest and subsequent custody.

3. Whether there is undue delay in the trial process that would justify granting bail to the applicant.

4. Whether the twin conditions under Section 45 of the PMLA are satisfied, warranting the denial of bail.

ISSUE-WISE DETAILED ANALYSIS

1. Entitlement to Bail under Section 483 of BNSS

The legal framework under Section 483 of the BNSS is considered in the context of the applicant's prolonged judicial custody and the nature of the allegations against him. The Court examined the applicant's argument that he was arrested based on presumptions and that the charge sheet has already been filed, reducing the risk of tampering with evidence. However, the Enforcement Directorate (ED) opposed the bail, citing the ongoing investigation into a large-scale scholarship scam involving misappropriation of funds meant for SC, ST, and OBC students.

The Court noted that the applicant's previous bail applications were dismissed, and interim bail was only granted for specific periods due to personal circumstances, such as visiting a hospitalized relative. The ED's argument emphasized the seriousness of the offenses under the PMLA and the need for a thorough investigation, which could be compromised if bail were granted.

2. Non-Supply of 'Reasons to Believe' Document

The applicant contended that the failure to provide a copy of the 'reasons to believe' document violated Section 19 of the PMLA. However, the Court highlighted that the applicant had already challenged his arrest and remand orders in a separate writ petition, which was still pending. Consequently, the Court refrained from adjudicating this issue, as it would overreach the jurisdiction of the writ Court. The applicant's reliance on a Supreme Court judgment was deemed inapplicable in this context.

3. Alleged Delay in Trial

The applicant argued that the delay in trial proceedings justified bail. The Court examined the procedural history and noted that charges had not yet been framed due to the need to comply with mandatory provisions of the BNSS. The Court found no inordinate delay at this stage, as the case was adjourned for checking copies, and thus, the applicant could not benefit from precedents where bail was granted due to trial delays.

4. Satisfaction of Twin Conditions under Section 45 of PMLA

The Court considered whether the twin conditions for bail under Section 45 of the PMLA were met. The ED argued that the offenses under investigation were serious and required a different approach to bail. The Court agreed, noting that the investigation was at a crucial stage, involving the examination of voluminous records and potential witness influence by the applicant. The Court concluded that the twin conditions were not satisfied in favor of the applicant, justifying the denial of bail.

SIGNIFICANT HOLDINGS

The Court held that the applicant, Hitesh Gandhi, was not entitled to bail under the current circumstances. The Court emphasized the ongoing nature of the investigation, the seriousness of the allegations, and the potential risk to the prosecution's case if bail were granted. The Court also clarified that its observations were limited to the bail application and did not reflect on the merits of the case.

Core Principles Established

The judgment reinforced the principle that bail in cases involving serious offenses under the PMLA requires careful consideration of the investigation's status and potential risks to the prosecution. The Court also underscored the importance of adhering to procedural requirements and refraining from overstepping jurisdictional boundaries in related legal proceedings.

Final Determinations

The bail application was dismissed, with the Court concluding that the applicant failed to demonstrate sufficient grounds for bail at this stage. The Court's decision was based on the ongoing investigation, the nature of the allegations, and the unsatisfied twin conditions under Section 45 of the PMLA.

Issues: Whether the petition for bail or default bail should be entertained when an application for the same relief was already pending before the Special Court.

Analysis: The petition was not examined on merits because a similar application seeking bail or default bail was already pending before the competent Special Court. In those circumstances, entertaining parallel proceedings for the same relief was considered inappropriate, and the petitioner was relegated to pursue the remedy before the Special Court.

Conclusion: The petition was not entertained and the petitioner was directed to pursue the pending application before the Special Court.

Issues: (i) whether interim monetary relief could be directed in favour of a depositor in view of his urgent medical need and the society's admitted financial position; (ii) whether directions could be issued for initiation and progress of criminal and money-laundering action in relation to the alleged misappropriation and breach of trust; (iii) whether the State and recovery authorities were required to explain the manner in which surcharge and recovery proceedings were being pursued.

Issue (i): whether interim monetary relief could be directed in favour of a depositor in view of his urgent medical need and the society's admitted financial position

Analysis: The order records that the appellant was suffering from cancer and was in immediate need of funds for treatment. It also notes the admitted deposits available with the society and the limited extent of the appellant's own dues. On that basis, the Court considered it appropriate to grant immediate financial assistance pending further consideration of the dispute.

Conclusion: Interim relief was granted in favour of the appellant by directing release of the amount to meet treatment expenses.

Issue (ii): whether directions could be issued for initiation and progress of criminal and money-laundering action in relation to the alleged misappropriation and breach of trust

Analysis: The order treats the alleged siphoning of depositors' money as involving breach of trust and cheating, and notes pending criminal proceedings against some of the former office-bearers. It further records that the alleged conduct constituted a predicate offence and that the Enforcement Directorate's intervention was warranted in the circumstances stated in the order.

Conclusion: Directions were issued for action under the money-laundering framework and for filing of a status affidavit regarding the criminal proceedings.

Issue (iii): whether the State and recovery authorities were required to explain the manner in which surcharge and recovery proceedings were being pursued

Analysis: The order notes surcharge proceedings against former members, the pending appeals, and the controversy regarding the authority that initiated recovery. It also requires the State and the District Collector to explain the steps taken, including the status of recovery, execution, and protection of assets, so that the recovery process could be examined in the correct statutory manner.

Conclusion: Affidavit directions were issued to the State and the recovery authorities regarding surcharge, execution, and protection of assets.

Final Conclusion: The order granted immediate limited relief to the affected depositor, while also issuing continuing directions concerning surcharge recovery, criminal investigation, and money-laundering action, with the matter kept pending for further compliance.

Ratio Decidendi: Where urgent humanitarian need is shown and the factual matrix indicates available society funds, the Court may grant limited interim monetary relief while simultaneously directing the authorities to explain and pursue surcharge, recovery, and connected criminal proceedings in accordance with law.

Issues: Whether bail should be granted in a prosecution under the Prevention of Money Laundering Act, 2002 in view of prolonged custody, delay in trial, and the petitioner's health condition.

Analysis: The petitioner's custody had continued for a substantial period, while investigation against other co-accused was still pending and the trial was not likely to conclude in the near future. The material collected was voluminous, and the complaint involved a large number of witnesses, reinforcing the conclusion that continued incarceration would not serve any immediate trial purpose. The petitioner had also been treated as a patient requiring specialised medical care, supporting the view that he fell within the category of a sick person for bail consideration. The objection that release would prejudice investigation or lead to witness intimidation was not supported by material. In these circumstances, the rigours of the bail conditions under the special statute were considered capable of being relaxed.

Conclusion: Bail was granted to the petitioner.

Final Conclusion: Further pre-trial detention was found unwarranted, and the petitioner was directed to be released on bail subject to the terms fixed by the Special Court.

Ratio Decidendi: Where an undertrial has undergone prolonged incarceration, the trial is unlikely to conclude soon, and the circumstances justify it, the constitutional right to personal liberty and speedy trial may warrant grant of bail even in proceedings under the Prevention of Money Laundering Act, 2002.

Issues: Whether the petitioners, facing prosecution under the Prevention of Money Laundering Act, 2002, were entitled to regular bail in view of prolonged custody, delay in commencement of trial, and the constitutional guarantee of personal liberty despite the rigours of Section 45 of the Prevention of Money Laundering Act, 2002.

Analysis: The pending bail applications were considered in the light of the principle that bail is the rule and jail is the exception, and of the constitutional protection under Article 21 of the Constitution of India. The determining factors were the length of custody already undergone, the stage of trial, the absence of a foreseeable conclusion of trial, the large volume of material, the number of accused and witnesses, and the fact that the delay was not attributable to the petitioners. The Court applied the settled principle that the twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 do not create an absolute bar where prolonged incarceration and denial of speedy trial would infringe fundamental rights. The Court also noted that parity, the absence of flight risk, and the lack of misuse of interim bail supported release on bail. Section 436A of the Code of Criminal Procedure, 1973 was found not to be a bar to bail and could not be read as requiring detention until the statutory period is crossed.

Conclusion: The petitioners were held entitled to regular bail, and their release was ordered on terms and conditions.

Ratio Decidendi: In prosecutions under special statutes with stringent bail conditions, prolonged custody without a reasonable prospect of trial concluding within a reasonable time permits constitutional courts to grant bail on the ground of violation of Article 21, and such constitutional protection prevails over Section 45 of the Prevention of Money Laundering Act, 2002.

Issues: Whether the applicant should be granted interim bail to participate in proceedings concerning the secured property before the bank.

Analysis: A notice concerning the applicant's property had been issued under the SARFAESI regime, and the applicant's presence was necessary for participation in the related bank proceedings. The applicant had previously availed interim bail without misuse, and his passport remained in the investigating agency's custody. These circumstances supported temporary release while safeguarding the investigation through appropriate bail restrictions.

Conclusion: Interim bail was granted to the applicant for a limited period to enable participation in the bank proceedings, subject to stipulated safeguards.