2026 (1) TMI 266 - SCH - Money Laundering

Money-laundering custody and delayed trial: gravity assessed case-by-case under Article 21, leading to regular bail

Regular bail under the money-laundering statute was considered on whether continued custody was justified in light of offence gravity and the accused's ... Money Laundering - seeking grant of regular bail - allegation of appellant being the ultimate beneficiary of the fraud which was a wellorchestrated scheme - diversion and siphoning of public funds through layered entities, resulting in substantial wrongful loss to Public Sector Banks - HELD THAT:- The court while dealing with the prayer for grant of bail has to consider gravity of offence, which has to be ascertained in the facts and circumstances of each case. One of the circumstances to consider the gravity of offences is also the term of sentence i.e., prescribed for the offence, the accused is alleged to have committed. The court has also to take into account the object of the special Act, the gravity of offence and the attending circumstances along with period of sentence. All economic offences cannot be classified into one group as it may involve various activities and may differ from one case to another. Therefore, it is not advisable on the part of the Court to categorize all the offences into one group and deny bail on that basis. It is well settled that if the State or any prosecuting agency including, the court, concerned has no wherewithal to provide or protect the fundamental right of an accused, to have a speedy trial as enshrined under Article 21 of the Constitution, then the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime. The record reveals that the prosecution complaint was filed on 06.09.2024. The Special Judge issued notice on 07.09.2024 to all proposed accused persons under the proviso to Section 223 of BNSS. The respondent challenged the said order before the High Court, resulting in eight months stay of proceedings, before the Special Judge, which was lifted on 23.05.2025 only upon withdrawal of the petition. The delay in the trial is thus attributable only to the respondent, not the appellant - The appellant has been in custody since 09.07.2024. The disposal of immovable properties occurred on 24.12.2024 and 17.02.2025 and pertains to M/s Marichika Properties, with which no material link to the appellant has been established. There is no evidence that the appellant was signatory to any sale document. The allegation of dissipation of proceeds of crime by him is, therefore, untenable at this stage. The impugned judgment and order dated 19.08.2025 is quashed and set aside - Appeal allowed. 1. ISSUES PRESENTED AND CONSIDERED (i) Whether, on the facts found, continued pre-trial incarceration under the money-laundering law, despite statutory bail restrictions, violated the accused's right to speedy trial under Article 21 so as to justify grant of regular bail. (ii) Whether the prosecution's objections to bail-alleged witness-influencing and alleged dissipation of attached properties-were substantiated so as to negate bail. (iii) Whether delay in progress of the case was attributable to the prosecution or the accused, and its bearing on the bail decision. 2. ISSUE-WISE DETAILED ANALYSIS A. Prolonged pre-trial incarceration vis-à-vis Article 21 and statutory bail restrictions Legal framework (as discussed by the Court): The Court examined bail in the context of Section 45 of the money-laundering law and the constitutional guarantee of personal liberty and speedy trial under Article 21. It treated the maximum prescribed punishment (seven years) as a relevant indicator while assessing 'gravity' for bail. The Court also considered that economic offences cannot be treated as a homogeneous class for a blanket denial of bail, and that statutory restrictions cannot be allowed to produce indefinite pre-trial detention contrary to Article 21. Interpretation and reasoning: The Court held that the right to speedy trial is not eclipsed by the nature of the offence, and that prolonged incarceration without commencement or reasonable progress of trial risks converting pre-trial detention into punishment. Applying this to the case, the Court relied on the following decisive factual findings: the accused had been in custody for about 16 months and 20 days; the maximum sentence was seven years; the evidence was primarily documentary and already in the prosecution's custody; investigation as regards the accused stood concluded (as recorded by the Special Court); cognizance had not yet been taken and the matter remained at scrutiny-of-documents stage; and there were about 210 witnesses, making early commencement of trial unlikely. The Court found no material showing effective steps leading to early trial progression despite the prosecution's stated request for day-to-day hearing. Conclusion: The Court concluded that continued incarceration in these circumstances violated Article 21 and warranted grant of regular bail, notwithstanding the statutory bail rigour, since indefinite pre-trial detention could not be justified where trial was not likely to commence soon and the prosecution already possessed the documentary material. B. Whether allegations of witness-influencing justified denial of bail Interpretation and reasoning: The Court tested the credibility of the allegation that the accused instructed a person (later cited as a prosecution witness) not to join the investigation. It found the allegation did not 'inspire confidence' because the accused had been in custody since 09.07.2024, whereas the concerned person was formally arrayed as a witness only much later. On this timeline, the Court found the accusation to be 'wholly incredulous'. Conclusion: The Court rejected witness-influencing as a substantiated ground to deny bail on the facts before it. C. Whether alleged dissipation of proceeds of crime/immovable properties was established against the accused Interpretation and reasoning: The Court examined the allegation that immovable properties were disposed of after attachment. It found that the disposals related to a company with which no material link to the accused had been established at that stage, and there was no evidence showing the accused was a signatory to any sale document. Given these factual gaps, the Court held the allegation of dissipation by the accused was untenable at that stage. Conclusion: The Court held that alleged dissipation of properties was not established against the accused so as to justify continued custody or denial of bail. D. Attribution of delay and its impact on bail Interpretation and reasoning: The Court examined the record and found that after the prosecution complaint was filed, proceedings before the trial court were stayed for about eight months due to the prosecution's challenge to the trial court's notice to proposed accused persons; the stay ended only when the challenge was withdrawn. The Court therefore held the delay was attributable to the prosecution and not to the accused. This conclusion reinforced the finding of Article 21 violation due to lack of trial progress while the accused remained incarcerated. Conclusion: The Court held that the prosecution-caused delay materially supported grant of bail. Result and operative directions (material to decision): The Court set aside the refusal of bail and directed release on regular bail on terms to be fixed by the trial court, with additional conditions requiring the accused to provide a contact phone number, surrender passport, and not leave India without permission.