TaxTMI 
TaxTMI 
2026 (1) TMI 392
X X X X Extracts X X X X
X X X X Extracts X X X X
....t and RC registered by CBI, vide RC 0962019S0002, dated 7th March, 2019, under Sections 409, 420, 467, 468 and 471 IPC, read with Sections 13(1)(c) & 13(1)(d) read with Section 13 (2) of the Prevention of Corruption Act. 3. The investigation of FIR No. 133 of 2018 was, thereafter, handed over to CBI and searches and seizures from 22 private institutions were conducted. During investigation of the case by CBI, the applicant was arrested and released on bail, vide order, dated 24th September, 2020, passed in CrMP (M) No. 1040 of 2020. 4. According to the applicant, the CBI has filed the charge sheet in twelve cases, including the case, related to the present ECIR in the Court of learned Additional Sessions Judge (CBI), Shimla. 5. As per the stand taken by the applicant, after the investigation, in the present ECIR, the ED has filed the complaint, under Sections 44 and 45 of the PMLA, before the learned Special Judge (PMLA) and the case is now listed for consideration on charge. 6. It is the case of the applicant that there are hundreds of witnesses, in the CBI challans, apart from the thousands of documents, which are being relying upon. According to the applicant, in the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ccused persons, the Enforcement Department has picked and without any reason had chosen only a few accused and others are on bail, though, all the other persons are accused of having committed the offences, under Sections 3 and 4 of the PMLA. 13. As per the applicant, all the allegations, levelled against him, have been made for the sake of allegations, being false and incorrect and the same can only be proved during the trial, which has remote possibility of being concluded within a reasonable time. As such, according to the applicant, no fruitful purpose will be served by keeping him in custody, for an indefinite amount of time. 14. The applicant is stated to be the permanent resident of District Shimla, belonging to a respectable family, as such, there is no chance of his, absconding from the course of justice. 15. According to the applicant, he had filed regular bail application, before this Court, bearing CrMP (M) No. 2444 of 2023, which was dismissed, vide order, dated 12th January, 2024. 16. 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 con....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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. 21.4. After recording the reason to believe in writing, the applicant and his co-accused were arrested by ED on 30th August, 2023, under Section 19 of PMLA, in the said ECIR. Thereafter, they were produced before the Special Designated Court (PMLA), Shimla, on 31st August, 2023, and the learned Special Court, after perusal of all the documents, including the arrest memo, grounds of arrest, reasons to believe and material for formation of such belief, has granted five days' ED custody, with a direction, to produce the accused persons before the Special Court on 4th September, 2023, on which date, they were produced before the Special Court and were remanded to judicial custody. 21.5. It is the further case of the ED that investigation is going on and is at crucial stage, which requires collection of additional evidence, examination of voluminous records and recording of statements of several persons associated with the applicant and other accused persons related to the case. 21.6. Elaborating their stand, it is the case o....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., in these entities, was to help in timely release of scholarship claim, under PMS Scheme, which was claimed by using false and forged documents, related to affiliation and fees structure. The applicant, in complete knowledge of these facts, stated to have deliberately, with an eye on profit, verified the scholarship claims. 21.13. As per the stand of the ED, the proceeds of crime obtained through shell entities was concealed by the applicant, by transferring the same in the account of M/s Pee Pee Construction and ultimately, using it to acquire a plot at Fagu, Theog, Shimla, in the name of his wife. 21.14. The proceeds of crime are also stated to have been used for business concerns namely, M/s Avinash Rajta and M/s Avinash Rajta & Co., whose operations are stated to have been controlled and handled by the applicant. The applicant is also stated to have used the proceeds of crime by investing the same in M/s Grand Emporio Hotels & Resorts Pvt. Ltd., in which, the applicant made his brother-in-law a Director, alongwith accused-Rajdeep Singh and Krishan Kumar. 21.15. As such, according to the ED, the applicant, is knowingly a party in acquisition of proceeds of crime, there....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n 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. 21.22. 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 behaviour of his co-accused. 21.23. In this regard, reliance has been placed on the judgment of the Delhi High Court in CRL.A No. 1207/2024, titled as Tasleem Ahmed versus State of NCT of Delhi, decided on 2nd September, 2025, wherein, it has been held that delay in trial caused by other co-accused persons cannot constitute a valid ground for seeking bail. 21.24. It is the case of the ED that there is no thumb-rule laid down by the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pplicant is stated to have constituted shell companies and proceeds of crime were invested in those shell companies. 22. On the basis of the above facts, a prayer has been made to dismiss the bail application. 23. The applicant, in this case, has been booked, under Section 3 of the PMLA and the punishment has been provided, under Section 4 of the PMLA. Section 4 of the PMLA is reproduced, as under: "4. Punishment for money-laundering.- Whoever commits the offence of money-laundering shall be punishable with rigorous imprisonment for a term which shall not be less than three years but which may extend to seven years and shall also be liable to fine. Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words "which may extend to seven years", the words "which may extend to ten years" had been substituted." 24. It is not in dispute that before releasing the accused on bail, in a case, registered under PMLA, it is incumbent upon the Court to record the findings with regard to the satisfaction of the twi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....f the trial does not proceed. The Special Leave Petition are, accordingly, dismissed with the aforesaid liberty." 30. 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. 31. 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 18th November, 2025, and now, he is before this Court. 32. Now, coming to the objection of the learned counsel appearing for the ED, qua the fact that delay in the trial is caused due to the accused persons and not by the ED. As per orders, dated 23rd September, 2025; 16th October, 2025; and 12th November, 2025, produced on the record, this Court is of the view that no role can be attributed to the applicant for causing delay in the trial. 33. Moreover, whatsoever has been prayed, which resulted into adjournment of the proceedings, before the learned trial Court, that has been done b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....3. In V. Senthil Balaji v. Deputy Director, Directorate of Enforcement, 2024 SCC OnLine SC 2626, of which, one of us was a member (Augustine George Masih, J.,), this Court, particularly in para 27, held that where a trial cannot be reasonably concluded and incarceration becomes prolonged, constitutional courts must intervene to safeguard the right to personal liberty under Article 21. The Court further emphasised that Section 45(1)(ii) of the PMLA cannot be interpreted to justify indefinite detention in cases involving voluminous, document-heavy material where trial is unlikely to begin promptly. The present case, in our view, stands on a similar footing. Para 27 of V. Senthil Balaji (supra) reads as follows: "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 unreasonab....
X X X X Extracts X X X X
X X X X Extracts X X X X
....before us, we find that several co-accused, whose alleged roles will ultimately be evaluated at trial, have already been granted bail. The Appellant has remained in custody for over seven months. The record is entirely documentary, as of now there are 66 witnesses, 184 documents, and more than 14,600 pages are involved, and the proceedings are still at the stage of supply of copy of the police report and other documents under Section 207, CrPC. In our view, these circumstances indicate that the commencement of trial is not imminent and that the trial itself is not likely to conclude once started in the near future. The continued detention of the Appellant requires closer scrutiny in light of constitutional considerations. 36. The learned senior counsel appearing for the applicant has also argued that the case, filed by the CBI, regarding the predicate offences, against the applicant, alongwith other accused persons are at the stage of consideration on charge. 37. 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 Deputy Director....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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 or protect the fundam....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nder 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. ......................
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 conditions which a statute p....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 very allegation is that the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....igently 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." 40. 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. In P. Chidambaram v. D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....us 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 cases with those pun....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 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 also reproduced the obse....
X X X X Extracts X X X X
X X X X Extracts X X X X
....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) 41. 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. 42. A three Judge Bench of the Hon'ble Supreme Court, in Union of Indi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....iod 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 egregious than these....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d 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 b 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 to speedy trial. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ant, 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 bail. A reference in th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....forcement, 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 keeping in view the pe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dency of the trial, in case No. ECIR/SHSZO/04/2019, dated 22.07.2019, registered with the Enforcement Directorate Office (ED), Sub-Zonal Office, Rani Villa, Bagrian House, Strawberry Hills, Chhota Shimla, Shimla, Himachal Pradesh, on his furnishing personal bail bond, in the sum of Rs. 2,00,000/-, with two sureties of the like amount, to the satisfaction of the learned trial Court. This order, however, shall be subject to the following conditions: a) The applicant shall regularly attend the trial Court on each and every date of hearing and if prevented by any reason to do so, seek exemption from appearance by filing appropriate application; b) The applicant shall not tamper with the prosecution evidence nor hamper the investigation of the case in any manner whatsoever; c) The applicant shall not make any inducement, threat or promises to any person acquainted with the facts of the case so as to dissuade them from disclosing such facts to the Court or the Police Officer; d) The applicant shall not leave the territory of India without the prior permission of the Court; and e) The applicant shall furnish an affidavit by tenth day of every m....