TaxTMI 
TaxTMI 
2026 (8) TMI 1611
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....sity of such restraint. Yet, when judicial custody ceases to be a brief prelude to trial and degenerates into years of indefinite confinement, the state silently commits a gravity of wrong that strikes at the very marrow of human dignity. The antiquity of this limitation finds its genesis in Roman jurisprudence, where Ulpian, a 2nd Century Roman jurist, recorded the core precept governing pre-trial/under-trial detention: Carcer ad continendos homines, non ad puniendos haberi debet, i.e. a prison ought to be used strictly for keeping men, not for punishing them. Pertinently, pre-trial/under-trial detention is purely preventive and temporary; it can never be permitted to degenerate into substantive punishment. When judicial custody stretches across years without the realistic prospect of an early trial, the prison wall ceases to serve as a vessel of lawful restraint and assumes the oppressive character of an unadjudicated sentence. Indefinite incarceration without the immediate prospect of trial is, in truth, the judicial equivalent of the infamous Lettres de Cachet; it substitutes the arbitrary certainty of the prison wall for the majesty of a lawful verdict. The intolerance for ....
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.... buyers and financial institutions in the name of various residential and commercial projects. The allegation of the ED is that the amount(s) so collected were not utilized for the purposes for which they had been received. Instead, substantial funds were allegedly diverted to intermediary entities and were utilized for acquisition of land for unrelated ventures, repayment of loans and other purposes unconnected with the projects for which the money had been collected. The ED has treated such diverted amounts as proceeds of crime arising out of the offences registered against the petitioner and other accused persons. It is further the case of the prosecution that the funds of UBPL were routed through a network of companies controlled by the petitioner, his father Raman Puri and his brother Vikram Puri. In particular, Buildcon Private Limited, Vanya Developers Private Limited and Universal Facility Private Limited are alleged to have been used as intermediary for diversion and layering of the proceeds of crime. It has been alleged that substantial amounts had been transferred from UBPL to Buildcon and other entities, which according to the ED, were not returned to UBPL and were subs....
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....on has alleged that such amounts were thereafter channelized to other entities and were not returned to UBPL. Similar allegations have been made regarding Vanya Developers Private Limited and Universal Facility Private Limited, which, according to the ED, had been used as an intermediary for diverting the funds from UBPL. The prosecution has further alleged that the petitioner had participated in the sale and transfer of assets and in transactions relating to the project which resulted in conflicting claims over the same unit(s). It has been alleged that the petitioner, along with his father and brother oversold properties and the relevant facts were concealed from buyers and statutory authorities. As per the ED, the petitioner has knowingly participated in the generation, concealment, possession, use and projection of the proceeds of crime as untainted property and has, consequently, committed the offence of money-laundering punishable under Section 4 of the PMLA. As per the prosecution complaint, the specific role ascribed to the petitioner is that he was a promoter and Director of UBPL and exercised control, along with his father and brother, over the business and affairs ....
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....s of the petitioner have been attached under the PMLA. It has been further contended that the properties provisionally attached by the ED include properties standing in the name of his parents which were purchased before the receipt of advances from customers by UBPL. Furthermore, the fixed deposits referred to by the prosecution also stand in the name of the father of the petitioner and not in the name of the petitioner. The only amount specifically attributed to the petitioner in the prosecution complaint is approximately Rs. 59.64 lakh which is shown as dues to Director in Table 26 of the complaint. It has been contended that this amount represents a legitimate entitlement of the petitioner as a Director and cannot be treated as an amount siphoned off from UBPL. It has, thus, been argued that the amount attributed to the petitioner is substantially below the monetary threshold referred to in the proviso to Section 45 of the PMLA. Learned senior counsel has further emphasized that the failure of the UBPL projects was the result of adverse conditions in the real estate market, inability of the buyers to make payments and the financial crisis faced by the company and not the result....
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.... fact of signing the cheques, execution of Builder-Buyer Agreements and conveyance-deeds & also having participated in the transactions of the group companies. Learned senior counsel has emphasized that the petitioner, along with his father and brother, exercised control over several companies which were used as intermediary for diversion and layering of proceeds of crime. It has been contended that approximately Rs. 46 crores had been diverted through Buildcon alone, apart from further amounts allegedly routed through Vanya Developers and Universal Facility Private Limited. It has been further contended that the role of the petitioner is supported by documentary material as well as his statements recorded under Section 50 of the PMLA. Learned senior counsel has further iterated that the allegations raised against the petitioner constitute grave economic offences involving large amounts collected from numerous home buyers and financial institutions. It has been further contended that the offence of money-laundering is a continuing offence and tracing the money trail is of substantial importance. Learned senior counsel has further iterated that the material collected ....
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....hstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless -] (i) the Public Prosecutor has been given a opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail: Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, 3[or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees] may be released on bail, if the Special Court so directs: xx xx xx xx xx (2) The limitation on granting of bail specified in sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail. III. Section 436-A of Cr.P.C., 1973 "436-A. Maximum period for which an undertrial prisoner can be d....
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....nding anything in sub-section (1), and subject to the third proviso thereof, where an investigation, inquiry or trial in more than one offence or in multiple cases are pending against a person, he shall not be released on bail by the Court. (3) The Superintendent of jail, where the accused person is detained, on completion of one-half or one-third of the period mentioned in subsection (1), as the case may be, shall forthwith make an application in writing to the Court to proceed under sub-section (1) for the release of such person on bail." Relevant Case Law 8. The precedents, apropos, to the matter(s) in issue, are as follows: I. The realm of regular bail on account of long custody vis-àvis statute other than PMLA: (i) Long back, in Hussainara Khatoon vs. Home Secy., State of Bihar reported as (1980) 1 SCC 81, the Hon'ble Supreme Court had declared that the right to speedy trial of offenders facing criminal charges is "implicit in the broad sweep and content of Article 21 as interpreted by this Court". Remarking that a valid procedure under Article 21 is one which contains a procedure that is "reasonable, fair and just" it was held that:....
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....le for making the offender commit the crime. Those factors may be social and economic, may be, the result of value erosion or parental neglect; may be, because of the stress of circumstances, or the manifestation of temptations in a milieu of affluence contrasted with indigence or other privations. 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. 20. We may hasten to add that the petitioner is still an accused; not a convict. The over-arching postulate of criminal jurisprudence that an accused is presumed to be innocent until proven guilty cannot be brushed aside lightly, howsoever stringent the penal law may be. 21. We are convinced that the manner in which the prosecuting agency as well as the Court have proceeded, the right of the accused to have a speedy trial could be s....
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.... II. The realm of regular bail on account of long incarceration vis-à-vis PMLA: (i) The Hon'ble Supreme Court in a judgment titled as V. Senthil Balaji versus The Deputy Director, Directorate of Enforcement, 2023 SCC Online SC 2626; has held as under: "24. There are a few penal statutes that make a departure from the provisions of sections 437, 438, and 439 of the Code of Criminal Procedure, 1973. A higher threshold is provided in these statutes for the grant of bail. By way of illustration, we may refer to Section 45(1)(ii) of PMLA, proviso to section 43D(5) of the Unlawful Activities (Prevention) Act, 1967 and Section 37 of the Narcotic Drugs and Psychotropic Substances Act, 1985 (for short, `NDPS Act'). The provisions regarding bail in some of such statutes start with a non-obstante clause for overriding the provisions of sections 437 to 439 of the CrPC, 1973. The legislature has done so to secure the object of making the penal provisions in such enactments. For example, the PMLA provides for Section 45(1)(ii) as money laundering poses a serious threat not only to the country's financial system but also to its integrity and sovereignty. 25. ....
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....ch 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 provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary powers, as held in the case of K.A. Najeeb2, 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 Constit....
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....apping for ransom, mass violence, etc. Neither is this a case where 100/1000s of depositors have been defrauded. The allegations have to be established and proven. The right to bail in cases of delay, coupled with incarceration for a long period, depending on the nature of the allegations, should be read into Section 439 of the Code and Section 45 of the PML Act. The reason is that the constitutional mandate is the higher law, and it is the basic right of the person charged of an offence and not convicted, that he be ensured and given a speedy trial. When the trial is not proceeding for reasons not attributable to the accused, the court, unless there are good reasons, may well be guided to exercise the power to grant bail. This would be truer where the trial would take years. xx xx xx xx 53. The Court further observed that, over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal....
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....he undertrial prisoner should not be enlarged on bail. Any deviation in the above proposition is constitutionally circumspect. 12. This brings us to the right to speedy trial which is an inseparable facet of Article 21 of the Constitution. Where delay in investigation or trial is such that incarceration becomes unduly prolonged, the constitutional guarantee of fairness is irreparably compromised. This Court in Surinder Singh v. State of Punjab, (2005) 7 SCC 387 held that while it would be impossible to lay down any invariable rule or evolve a straitjacket formula for grant of bail on completion of a specified period of detention in custody; unduly long deprivation of liberty pending trial strikes at the heart of Article 21." (v) The Hon'ble Supreme Court in a judgment titled as Arvind Dham versus Directorate of Enforcement, 2026 SCC Online SC 30; has held as under: "15. We have given our thoughtful consideration to the rival submissions and have carefully perused the record. 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 circu....
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....ny procedure which fails to ensure a reasonably expeditious trial cannot be regarded as "reasonable, fair, and just," and consequently falls foul of Article 21. This constitutional imperative assumes its most grave and poignant dimension when the accused is forced to endure pre-trial/under-trial detention while awaiting the conclusion of his trial. In such circumstances, prolonged judicial custody directly strikes at the cardinal pillar of criminal jurisprudence: ei incumbit probatio qui dicit, non qui negat, i.e. the burden of proof lies upon him who asserts, not upon him who denies. The doctrine of the presumption of innocence is a golden thread of the criminal law, and where an accused languishes behind bars without a conclusive verdict of guilt in sight, the passage of un-adjudicated time hollows out this presumption. As pre-trial incarceration stretches across months and years, this presumption begins to weigh heavily against the legitimacy of continued detention and in the absence of a formal judicial verdict of guilt, the prosecuting agency/State loses the moral and legal authority to keep the individual captive. In case(s), where the trial ultimately culminate in an acquitt....
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.... a ground for indefinite or prolonged incarceration, particularly when the prospects of trial culminating in near future are very distant. This constitutional imperative of "speedy trial" acquires its highest urgency in cases governed by special statutes, wherein, the legislature has provided for stringent statutory fetters on the grant of bail. Where the operation of law renders bail a distant, almost insurmountable goal, the state's responsibility to conduct the trial with utmost swiftness becomes an absolute, non-negotiable duty. 9.3. To counter the menace of money laundering and safeguard the economic fabric of the nation, the legislature, in its wisdom, has enacted and provided for stringent bail conditions for offences under the Prevention of Money Laundering Act, 2002 (PMLA); Section 45, whereof, embeds "twin conditions" by imposing heavy statutory fetters upon the judicial discretion to grant bail. By virtue of these conditions, the court is constrained to refuse bail unless it is satisfied that there are reasonable grounds for believing that the accused is not guilty of such offence and is not likely to commit any offence while on bail. However, a grave constitut....
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....when the State fails to discharge this heightened duty, the statutory threshold under Section 45 of PMLA must give way to the constitutional imperative of freedom. 9.5. The consequential question that now arises for pondering is one of quantification; What duration of under-trial custody constitutes "prolonged incarceration" so as to breach the sacrosanct threshold of Article 21? The jurisprudence, across centuries and legal traditions, has rejected the notion that personal liberty can be governed by mathematical formulas or rigid, mechanical arithmetic. The law, in its wisdom, recognizes that equity operates not through uniformity, but through sensitive contextual calibration. A critical distinction must be drawn between the statutory entitlement under Section 436-A Cr.P.C./479 BNSS and the broader constitutional power of a court to grant bail on account of prolonged incarceration under Article 21. There can neither be a straight-jacket formula, nor a fixed statutory clock that automatically signals when undertrial detention ceases to be lawful custody and degenerates into unconstitutional punishment. The threshold of "one-half/one-third of maximum punishment prescribed" pro....
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.... to say the least, a quixotic endeavour. Circumstantial flexibility, one additional or different fact, may make a sea of difference between conclusions in two cases. Such exercise would thus, indubitably, be dependent upon the factual matrix of the particular case which the Court is in seisin of, since every case has its own peculiar factual conspectus. Such judicial discretion, but ofcourse, ought to be exercised in accordance with the principles of justice, equity and good conscience. An age old adage reads, thus: "The judge even when he is free, is still not wholly free. He is not to innovate at pleasure. He is not a knight-errant roaming at will in pursuit of his own ideal of beauty or of goodness. He is to draw his inspiration from consecrated principles. He is not to yield to spasmodic sentiment, to vague and unregulated benevolence. He is to exercise a discretion informed by tradition, methodized by analogy, disciplined by system, and subordinated to the primordial necessity of order in the social life. Wide enough in all conscience is the field of discretion that remains" 10. As a sequitur to above-said rumination, the following postulates emerge: (I) A....
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..... Equally, the apprehension of the petitioner influencing the prosecution witnesses remains unsupported by any substantive material. The prosecution complaint already stands filed, the investigation is complete, and the evidence relied upon is predominantly documentary in nature, all of which is already in the custody of the ED. The ED has not furnished any list of vulnerable witness(s) much-less any tangible basis for the apprehension that the petitioner may interfere with the prosecution evidence. Thus, in the totality of the factual facts/circumstances of the petition in hand, in the considered opinion of this Court, the fetters imposed by Section 45 of PMLA stand diluted in light of Article 21. Keeping in view of the entirety of the factual milieu of the instant case; most pertinently the factum of petitioner (herein) being in custody for 01 year and 22 days vis-à-vis the procrastinated nature/stage of trial which is reflectable from the extensive prosecution evidence likely to be yet led (in the form of 49 witnesses and 90 relied upon documents running into more than 10,000 pages), the petitioner (herein) not being a proclaimed offender ever in the ECIR in question, ....