TaxTMI 
TaxTMI 
2026 (1) TMI 52
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....n of the ED. 4. The charge sheet is also stated to have been filed before the learned Special Judge, Shimla, upon which, cognizance has been taken by the Court. 5. According to the applicant, he had filed regular bail application, before this Court, bearing CrMP (M) No. 2636 of 2025, which was dismissed, vide order, dated 12th January, 2024. 6. The applicant has also given the details of the earlier bail applications, filed by him, before this Court, wherein he has been ordered to be released on interim bail, to contend that he has not abused the liberty granted to him, at any point of time, in the past. 7. It has been contended on behalf of the applicant that he had filed SLP before the Hon'ble Supreme Court, which came to be disposed of, vide order, dated 25th March, 2025. 8. Thereafter, the applicant had approached the learned trial Court, as per the directions of the Hon'ble Supreme Court, by filing a regular bail application, which came to be rejected, vide order dated 15th October, 2025. 9. According to the applicant, his passport has already been handed over to the CBI. 10. Contending that the applicant is innocent and has committed no offence and has fa....
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....desh. According to ED, they have diverted the said funds into their pockets/ accounts. 22 institutions are stated to be involved. In this regard, ED has relied upon the charge sheet submitted by CBI. The investigation is stated to be going on to unearth the illicit money and ascertain the proceeds of crime (PoC), obtained by way of this scam. 14.5. Elaborating their stand, it is the case of the ED that CBI registered Fir No. RC0962019S0002, dated 7th May, 2019, under Sections 409, 419, 465, 466 and 471 IPC, against the unknown persons. As per the allegations of the said case, there were complicity of individuals from State Government Education Department, Bank Officials and private institutions. Misappropriation in the disbursement of scholarship funds, in large scale, has also been alleged. The offences, under Sections 419 and 471 IPC, are also stated to be scheduled offences, mentioned in the schedule, appended to PMLA and as such, inquiry was initiated. 14.6. The applicant is stated to be the Vice Chairman of KC Group of Institutions at Pandoga, Una and Nawashehar, Punjab. According to the ED, during the course of investigation, it has been revealed that KC Group of Instit....
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....ty to renew the bail application after some time, the same does not restrict power of either High Court or trial Court to adjudicate the matter independently and on its merit. Mere grant of liberty to re-file a bail cannot be construed as a right to be enlarged on bail, at a later stage. 14.12. It has been averred in the reply that filing of successive bail applications without any change in circumstances cannot be entertained. In this regard, reliance has been placed on the judgments of the Hon'ble Supreme Court in Viruakshappa Gouda versus State of Karnataka, (2017) 5 SCC 406; Kalyan Chandra Sarkar versus Rajesh Ranjan, (2005) 2 SCC 42. 14.13. It has also been averred by the respondent-ED that mere the period of incarceration cannot be the sole consideration for grant of bail in a case of this nature, involving large scale embezzlement and laundering of public money meant for scholarships of poor students, as, the trial, in the present case, is at the stage of framing charge and the primary reason for non-framing of charges is the absence of majority of the accused persons. According to the ED, the applicant should not be allowed to derive benefit from the obstructive behav....
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.... over and explained to him. The said grounds of arrest are stated to bear his signatures, alongwith with the endorsement 'read and understood'. It has been submitted that any contention regarding non-supply of 'reasons to believe' is legally untenable and an attempt to retrospectively apply a subsequent development in law. 14.20. It has been contended on behalf of the ED that the very issue of non-compliance of Section 19 of the PMLA, now being raised by the applicant, has already been raised by him, before the Hon'ble Supreme Court and has been conclusively rejected. Therefore, the applicant cannot raise a settled issue again. The arrest and continued custody of the applicant are stated to be lawful and strictly in compliance of Section 19 of the PMLA. 14.21. According to the ED, the applicant, being Vice Chairman of KC Educational and Social Welfare Society; KC Social Welfare Trust and KC Group of Institutions, Pandoga and Nawashehar, looked after the work related to admissions and functional matters of KC Group of Institutions, Pandoga and Nawashehar. The work related to the claim of scholarship, under PMS Scheme, for SC/ST/OBC students of KC Group of Institutions, Pandoga....
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.... 16. The main trust of the arguments of the learned counsel appearing for the ED is about the fact that the earlier bail applications of the applicant have been dismissed on merit, by this Court; thereafter, the applicant has tried his luck by moving SLP before the learned Supreme Court and his SLP has also been dismissed. As such, it has been argued that the period of custody of the applicant is not the sole criterion to accept the prayer for bail, made by him. 17. Apart from this, it has also been argued that the delay, in the present case, has been caused by the accused persons and not on account of the prosecution. In order to buttress his contention, the learned counsel for the ED has drawn the attention of this Court, towards the orders, dated 23rd September, 2025; 18th October, 2025; and 12th November, 2025, passed by the learned trial Court, in this case. 18. The applicant, in the present case, has been arrested in the month of August, 2023 and prior to that, he remained in judicial custody, in the case registered by CBI, bearing No. RC0962019A0002, dated 7th May, 2019. Even, in this case, the applicant is in custody for almost two years and four months. 19. The ....
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....onclusion of the trial, against the applicant, are not so bright. 25. The said findings can be recorded, in view of the decision of the Hon'ble Supreme Court, in case titled as Mahesh Joshi versus Directorate of Enforcement, Neutral Citation No. 2025 INSC 1377. Relevant paras-10 to 14, of the said judgment, are reproduced, as under: 10. Furthermore, attention is drawn to the documentary nature of the case, wherein large number of pages, witnesses and documents are cited by the prosecution, and that the matter remains at the stage of supply of copy of the police report and other documents under Section 207, Code of Criminal Procedure (for short, "CrPC"). It is urged that the trial is unlikely to commence in the near future, and prolonged incarceration would be inconsistent with Article 21 of the Constitution of India. 11. On the contrary, the learned ASG submits that the allegations relate to serious economic offences. He refers to what the agency describes as a financial trail involving movement of funds through M/s Mugdog Packaging India LLP, M/s Maxclenz Retail Pvt. Ltd., and M/s Jay The Victory, before reaching the firm of the Appellant's son, M/s Sumangalam....
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.... extraordinary powers, as held in the case of K.A. Najeeb [(2021) 3 SCC 713], can only be exercised by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45(1)(ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under A....
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....." 27. By way of the order, dated 25th March, 2025, reproduced hereinabove, liberty has been granted, by the Hon'ble Supreme Court, to the applicant to file fresh bail application, before the concerned trial Court, within a period of six months, from the date of the order, in case, the trial does not proceed. 28. Consequently, the applicant had moved the bail application before the learned trial Court, which has been dismissed, by the learned trial Court, vide order, dated 15th October, 2025, and now, he is before this Court. 29. The learned counsel appearing for the applicant, in the present case, has also submitted the details of the cases, filed by the CBI, regarding the predicate offences. As per the said list, Corruption Case No. 8 of 2021, filed against applicant-Hitesh Gandhi, alongwith eleven other accused persons and Corruption Case No. 12 of 2021, filed against the applicant, alongwith ten other accused persons, are at the stage of consideration on charge. 30. In this background, the chances of commencement and conclusion of the trial, against the applicant, in near future, seem to be not so bright, as, the Hon'ble Supreme Court, in V. Senthil Balaji versus De....
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....us: "49. We find that, on account of a long period of incarceration running for around 17 months and the trial even not having been commenced, the appellant has been deprived of his right to speedy trial. 50. As observed by this Court, the right to speedy trial and the right to liberty are sacrosanct rights. On denial of these rights, the trial court as well as the High Court ought to have given due weightage to this factor. 51. Recently, this Court had an occasion to consider an application for bail in the case of Javed Gulam Nabi Shaikh v. State of Maharashtra wherein the accused was prosecuted under the provisions of the Unlawful Activities (Prevention) Act, 1967. This Court surveyed the entire law right from the judgment of this Court in the cases of Gudikanti Narasimhulu v. Public Prosecutor, High Court of Andhra Pradesh, Shri Gurbaksh Singh Sibbia v. State of Punjab, Hussainara Khatoon (I) v. Home Secretary, State of Bihar, Union of India v. K.A. Najeeb and Satender Kumar Antil v. Central Bureau of Investigation. The Court observed thus: "19. If the State or any prosecuting agency including the court concerned has no wherewithal to provide ....
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....al right to liberty under Article 21 of the Constitution. As observed time and again, the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial. 55. As observed by this Court in the case of Gudikanti Narasimhulu (supra), the objective to keep a person in judicial custody pending trial or disposal of an appeal is to secure the attendance of the prisoner at trial. 56. In the present case, the appellant is having deep roots in the society. There is no possibility of him fleeing away from the country and not being available for facing the trial. In any case, conditions can be imposed to address the concern of the State. 57. Insofar as the apprehension given by the learned ASG regarding the possibility of tampering the evidence is concerned, it is to be noted that the case largely depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant. ....
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....tion already undergone has exceeded a substantial part of the prescribed sentence. One of the reasons is that if, because of such provisions, incarceration of an undertrial accused is continued for an unreasonably long time, the provisions may be exposed to the vice of being violative of Article 21 of the Constitution of India. 27. Under the Statutes like PMLA, the minimum sentence is three years, and the maximum is seven years. The minimum sentence is higher when the scheduled offence is under the NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45 (1) (ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence. Another important consideration is the higher threshold or stringent cond....
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....witnesses, five had been examined and the custody period of the said applicant was little over one year. Relevant paras-6 to 11, of the said judgment, are reproduced, as under: 6. In the light of the gist of the contentions noted above, we have perused the petition papers, but without adverting to much details at this stage since the basic facts required for considering an application for bail alone is to be noted without effecting the main contentions of the parties to be put forth during trial. The basic allegation as made against the petitioner as noted is regarding the illegal activity during the period 1-6-2022 to 26-6-2022. Though the learned Additional Solicitor General with reference to the objection statement wherein details of the FIR filed in three other cases is referred to indicate the illegal activities in which the petitioner is involved, it is needless to mention that in the said cases the proceedings in any event would be taken against the petitioner to its logical conclusion. 7. In that background, keeping in view the allegation against the petitioner is of possessing the amount of Rs 30 lakhs in his bank account, apart from the fact that the ver....
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....t and the petitioner diligently adhering to such conditions, as also not being required in any other case. For the purpose of imposition of such conditions and issue of release order the petitioner shall be produced forthwith before the trial court. The petition is disposed of in the above terms." 33. The Hon'ble Supreme Court in Manish Sisodia versus Directorate of Enforcement, reported as 2024 SCC OnLine SC 1920, has elaborately discussed the provisions of PMLA, viz-a-viz, offences, which are punishable for death, imprisonment for life, ten years or more like offences under the Narcotic Drugs and Psychotropic Substances Act, murder, cases of rape, dacoity, kidnapping for ransom, mass violence, etc. Relevant paras-28 and 49 to 57 of the judgment, are reproduced, as follows: "28. Before considering the submissions of the learned ASG with regard to maintainability of the present appeals on account of the second order of this Court, it will be apposite to refer to certain observations made by this Court in its first order, which read thus: "26. However, we are also concerned about the prolonged period of incarceration suffered by the appellant - Manish Sisodia. I....
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.... tenacious as tenacious can be. 27. The appellant - Manish Sisodia has argued that given the number of witnesses, 294 in the prosecution filed by the CBI and 162 in the prosecution filed by the DoE, and the documents 31,000 pages and 25,000 pages respectively, the fact that the CBI has filed multiple charge sheets, the arguments of charge have not commenced. The trial court has allowed application of the accused for furnishing of additional documents, which order has been challenged by the prosecution under Section 482 of the Code before the High Court. It was stated at the Bar, on behalf of the prosecution that the said petition under Section 482 will be withdrawn. It was also stated at the Bar, by the prosecution that the trial would be concluded within next six to eight months. 28. Detention or jail before being pronounced guilty of an offence should not become punishment without trial. If the trial gets protracted despite assurances of the prosecution, and it is clear that case will not be decided within a foreseeable time, the prayer for bail may be meritorious. While the prosecution may pertain to an economic offence, yet it may not be proper to equate these....
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....Court had an occasion to consider an application for bail in the case of Javed Gulam Nabi Shaikh v. State of Maharashtra, 2024 SCC OnLine SC 1693, wherein the accused was prosecuted under the provisions of the Unlawful Activities (Prevention) Act, 1967. This Court surveyed the entire law right from the judgment of this Court in the cases of Gudikanti Narasimhulu v. Public Prosecutor, High Court of Andhra Pradesh, (1978) 1 SCC 240, Shri Gurbaksh Singh Sibbia v. State of Punjab, (1980) 2 SCC 565, Hussainara Khatoon (1) v. Home Secretary, State of Bihar, (1980) 1 SCC 81, Union of India v. K.A Najeeb, (2021) 3 SCC 713, and Satender Kumar Antil v Central Bureau of Investigation, (2022) 10 SCC 51. The Court observed thus: "19. 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." 52. The Court als....
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....al or disposal of an appeal is to secure the attendance of the prisoner at trial. 56. In the present case, the appellant is having deep roots in the society. There is no possibility of him fleeing away from the country and not being available for facing the trial. In any case, conditions can be imposed to address the concern of the State. 57. Insofar as the apprehension given by the learned ASG regarding the possibility of tampering the evidence is concerned, it is to be noted that the case largely depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant." (self emphasis supplied) 34. In view of the discussions made hereinabove, now, the next question, which arises for determination, before this Court, is, about the fact as to whether the twin conditions, as per Section 45 of the PMLA, are existing in favour of the applicant, on account of his long custody. 35. A three Judge Bench of the Hon'ble Supreme Co....
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....l for an extended period of time with little possibility of early completion of trial. The constitutionality of harsh conditions for bail in such special enactments, has thus been primarily justified on the touchstone of speedy trials to ensure the protection of innocent civilians. 13. We may also refer to the orders enlarging similarly-situated accused under UAPA passed by this Court in Angela Harish Sontakke v. State of Maharashtra, (2021) 3 SCC 723. That was also a case under Sections 10, 13, 17, 18, 18-A, 18-B, 20, 21, 38, 39 and 40(2) of the UAPA. This Court in its earnest effort to draw balance between the seriousness of the charges with the period of custody suffered and the likely period within which the trial could be expected to be completed took note of the five years' incarceration and over 200 witnesses left to be examined, and thus granted bail to the accused notwithstanding Section 43-D(5) of the UAPA. Similarly, in Sagar Tatyaram Gorkhe v. State of Maharashtra, (2021) 3 SCC 725, an accused under UAPA was enlarged for he had been in jail for four years and there were over 147 witnesses still unexamined. 14. The facts of the instant case are more....
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....is not only was beyond the statutory mandate of a prima facie assessment under Section 43-D(5), but it was premature and possibly would have prejudiced the trial itself. It was in these circumstances that this Court intervened and cancelled the bail. 17. It is thus clear to us that the presence of statutory restrictions like Section 43-D(5) of the UAPA per se does not oust the ability of the constitutional courts to grant bail on grounds of violation of Part III of the Constitution. Indeed, both the restrictions under a statute as well as the powers exercisable under constitutional jurisdiction can be well harmonised. Whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence. Such an approach would safeguard against the possibility of provisions like Section 43-D(5) of the d UAPA being used as the sole metric for denial of bail or for wholesale breach of constitutional right ....
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....l, against the applicant, in near future and considering the fact that the trial, arising out of the RC, registered by CBI, has also not yet been commenced, this Court is of the view that the embargo, as created by Section 45 of the PMLA, does not come in the way of releasing the applicant, on bail, as the applicant is in custody for about two years and four months, since, the Hon'ble Supreme Court in Athar Parwez versus Union of India, Neutral Citation No. 2024 INSC 995, has held that the constitutional jurisdiction, viz-a-viz, the restrictions, under the statute need to be harmonized. Relevant paras-19 to 21, of the judgment, are reproduced, as under: "19. Long incarceration and unlikely likelihood of trial being completed in near future has also been taken as a ground for exercising its constitutional role by the Constitutional Courts to grant bail on violation of Article 21 of the Constitution of India which guarantees trial to be concluded within a reasonable time. Gross delay in conclusion of the trial would justify such invocation leading to a conclusion of violation of Part III the Constitution of India, which may be taken as a ground to release an undertrial on ba....
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....sus Directorate of Enforcement, vide order, dated 30th July, 2024, has held that the rigors of Section 45 of the PMLA can be suitably relaxed to afford conditional liberty to the accused, who has spent considerable time in custody and there being no likelihood of the trial being concluded, in the short span. Relevant paras-6 and 7, of the judgment, are reproduced, as under: "6. The only scheduled offence against the petitioner is the one under Section 420 IPC, which is in relation to the leakage of REET question paper, and in which the petitioner has already been enlarged on regular bail by this Court. 7. of Adverting to the prayer for grant of bail in the instant case, it is pointed out by learned counsel for ED that the complaint case is at the stage of framing of charges and 24 witnesses are proposed to be examined. The conclusion proceedings, thus, will take some reasonable time. The petitioner has already been in custody for more than a year. Taking into consideration the period spent in custody and there being no likelihood of conclusion of trial within a short span, coupled with the fact that the petitioner is already on bail in the predicate offence, and k....