This is a neutral professional article. The judgment is analysed in the context of its factual background, issues framed, and conclusions reached by the Court.

2026 (9) TMI 558 - CALCUTTA HIGH COURT

At a Glance

Prolonged pre-trial incarceration in a money-laundering prosecution can justify bail on the constitutional protection of personal liberty and speedy trial under Article 21 of the Constitution of India, even where the accused does not satisfy the ordinary twin conditions in Section 45 of the Prevention of Money-Laundering Act, 2002. That conclusion is not automatic. The court must assess the period already spent in custody, the actual and likely progress of trial, the nature and security of the evidence, the source of delay, the risk of interference with witnesses, and the feasibility of conditions that preserve the fairness of the proceedings.

The operative decision granted bail to an accused who had remained in custody for more than a year. The court found that the statutory restriction in Section 45 had not been surmounted on the merits. Nevertheless, it treated the custody period, bail already granted in the predicate-offence case, the pending status of the predicate investigation, and the nature of certain material relied upon in the money-laundering case as circumstances warranting constitutional relief. The fact that the money-laundering trial had commenced and some witnesses had been examined did not prevent bail; it instead informed the strict conditions imposed to protect the trial.

The decision therefore marks an important distinction: Section 45 remains the governing statutory threshold for ordinary bail consideration, but it cannot be applied so mechanically that pre-trial detention becomes punitive where the constitutional right to liberty and a reasonably expeditious trial is materially engaged.

Background & Context

Money-laundering prosecutions operate within a stringent bail regime. The seriousness of allegations, the relationship between the scheduled offence and the alleged proceeds of crime, and apprehensions of absconding, witness intimidation or evidence tampering commonly weigh heavily against release. The statutory position does not, however, authorise detention as a substitute for punishment before adjudication of guilt.

In 2026 (9) TMI 558 - CALCUTTA HIGH COURT, the allegations were described as serious, including alleged impersonation and deception for obtaining substantial sums. On examining the investigative material, the court held that the accused had not overcome the restriction under Section 45. Yet the accused had remained in custody for more than a year, was on bail in the predicate-offence case, and the investigation in that predicate case remained pending.

The court also noted that the money-laundering investigation had dealt with certain original issues that did not necessarily concern the parking of tainted money and were not mentioned in the predicate-offence case. Their relevance was left for determination at trial, unless ultimately covered by the predicate case. This was not a final finding on the merits of the prosecution; it was a circumstance relevant to the continued necessity and proportionality of custody.

The trial had progressed beyond a purely preliminary stage, with some witnesses examined. The court accordingly balanced the liberty claim against the need to ensure the accused's presence and protect witnesses, granting bail subject to passport surrender, territorial restriction, disclosure of contact and residence particulars, non-contact with witnesses, regular trial attendance, and cancellation upon breach.

Key Issues / Provisions

Section 45: the statutory bail threshold

Section 45 of the Prevention of Money-Laundering Act, 2002 opens with a non obstante clause and provides that no person accused of an offence under the Act shall be released on bail or on bond unless: the Public Prosecutor has been given an opportunity to oppose the application; and, where the application is opposed, the court 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".

These are generally described as the twin conditions. Section 45(2) makes the restriction additional to limitations under the Code of Criminal Procedure, 1973 or other law. The statutory text thus requires more than the ordinary assessment of flight risk, witness influence and evidence tampering. But the provision regulates ordinary statutory bail; it does not convert pre-trial custody into a sentence.

Article 21 and the right to a reasonably expeditious trial

Article 21 of the Constitution of India declares: "No person shall be deprived of his life or personal liberty except according to procedure established by law." The right to speedy trial is a recognised facet of this protection. Where the likely duration of prosecution makes continued detention oppressive, constitutional courts may protect liberty through bail notwithstanding statutory rigours, while ensuring that trial interests are protected by proportionate conditions.

Procedural provisions and detention benchmarks

Section 65 of the Prevention of Money-Laundering Act, 2002 applies the Code of Criminal Procedure, 1973 to arrest, search, seizure, investigation, prosecution and other proceedings under the Act, "in so far as they are not inconsistent with the provisions of this Act." This explains why general bail principles continue to have relevance, subject to Section 45.

Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 provides for release where detention reaches one-half of the maximum imprisonment for the offence, and one-third for a first-time offender, subject to its provisos and explanation. It also directs exclusion of detention caused by delay attributable to the accused. Section 479(2) states that, where investigation, inquiry or trial in more than one offence or multiple cases is pending, the person shall not be released on bail under that section. In the operative decision, the prosecution relied on the fact that the stated detention period had not been crossed. The court did not regard that fact as conclusive against constitutional bail on the facts before it.

Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 empowers the High Court or Court of Session to direct release of a person in custody on bail and to impose conditions necessary for the purposes specified in Section 480(3). Those purposes include securing attendance, preventing repetition of a similar offence, and preventing inducement, threat, promise or evidence tampering. Such conditions are central to reconciling personal liberty with the integrity of a PMLA trial.

Detailed Analysis

Section 45 and Article 21 operate in distinct but connected fields

The operative ruling does not dilute Section 45 or hold that a year of custody, by itself, neutralises the twin conditions. It first recorded that the accused could not meet the Section 45 restriction. Bail was nevertheless granted after a separate constitutional assessment of the duration of custody, the incomplete predicate investigation, the status of trial, and the possibility of safeguarding the process by conditions. The analysis is therefore fact-sensitive and cannot be reduced to a fixed temporal formula.

The court's approach is consistent with the proposition that a bail court may make a tentative assessment without conducting a mini-trial. The statutory assessment remains relevant, as do the conventional risks of absconding, reoffending, witness influence and obstruction. But when the prosecution is not realistically capable of concluding within a reasonable time, continued custody must be tested against Article 21 rather than justified only by the gravity of accusation.

Constitutional authorities on prolonged incarceration

In 2024 (9) TMI 1497 - Supreme Court, the court accepted that there was prima facie material for the money-laundering allegation, yet granted bail because multiple scheduled-offence trials, numerous accused and several hundred witnesses made a timely conclusion unrealistic. The decision is significant because it confirms that a prima facie case and the heightened threshold under Section 45 do not, by themselves, answer the separate Article 21 question. Stringent conditions were used to address apprehensions of witness influence and interference.

In 2024 (8) TMI 614 - Supreme Court, prolonged custody, non-commencement of trial, voluminous material and the absence of record support for attributing delay to the accused resulted in bail. The court held that delay and prolonged incarceration must be read into the exercise of discretion under Section 45 and general bail jurisdiction. Its relevance lies in the insistence that an accused cannot be denied relief merely because the case record is extensive, particularly where the documentary material is already secured.

In 2025 (2) TMI 904 - Supreme Court, the accused had spent over a year in custody, while only one of 225 prosecution witnesses had been examined. The court found no reasonable prospect of timely completion and treated further detention as an infringement of the speedy-trial guarantee. The ruling demonstrates that the custody period must be viewed with the remaining procedural workload, and not in isolation.

In 2024 (9) TMI 321 - SC Order, custody of about 22 months, multiple complaints, a large proposed witness base and the failure of earlier expectations of expeditious trial justified relaxation of Section 45. The court reiterated that detention cannot become punishment before conviction and paired release with passport, attendance and non-tampering conditions.

In 2024 (5) TMI 1523 - Supreme Court, the court treated the statutory undertrial-detention protection under Section 436A of the Code of Criminal Procedure, 1973 as applicable to a PMLA prosecution. Since the trial had not commenced and the relevant incarceration threshold was due to be reached, release was directed. The authority concerns a statutory entitlement rather than only discretionary constitutional bail, but it reinforces the anti-incarceration rationale.

In 2025 (3) TMI 272 - SC Order (LB), bail followed despite the twin conditions where the evidence was substantially documentary and already seized, about 50 witnesses remained, and the accused was on bail in the predicate case. The decision supports the practical proposition that the security of material evidence reduces the force of a generic tampering objection, though a court must still separately assess the risk of influencing witnesses.

In 2026 (3) TMI 1376 - SC Order, the prosecution complaint had been filed, the accused had remained in custody for over eight months and had previously appeared before the investigating agency. The court found no present necessity for further custody, holding that Section 45 cannot justify indefinite detention. This authority shows that the constitutional inquiry is not confined to exceptionally lengthy custody; post-complaint necessity and cooperation are also material.

In 2025 (12) TMI 372 - Supreme Court, the court granted bail where the record was documentary, numerous witnesses and extensive documents remained, proceedings were still at the document-supply stage, and early trial commencement was not imminent. The principle applied was that even a custody period of over seven months requires close constitutional scrutiny where the trial trajectory indicates substantial further delay.

Authorities identifying the limits of the constitutional exception

In 2023 (11) TMI 63 - Supreme Court, bail was refused after a tentative assessment of the material disclosed a prima facie case and the prosecution assured timely progress. The court nevertheless preserved liberty to renew the application if the trial became unduly protracted or circumstances changed. The decision confirms that prolonged incarceration is a contextual ground, not an automatic release rule.

In 2026 (1) TMI 1568 - KARNATAKA HIGH COURT, custody of 127 days was held insufficient to amount to long incarceration, despite recognition that Article 21 may in appropriate cases outweigh Section 45. Liberty was reserved to seek bail again if the trial failed to progress or custody became unduly prolonged. The decision illustrates the importance of demonstrating both meaningful custody and an adverse trial prognosis.

In 2023 (5) TMI 527 - Supreme Court, bail orders were set aside because the statutory rigour of Section 45 had not been applied and the completion of proceedings in the predicate case had been wrongly treated as dispositive of the Enforcement Directorate's separate inquiry. The decision remains an essential caution: a constitutional argument based on incarceration does not permit a court to ignore Section 45 or conflate predicate-offence proceedings with the money-laundering investigation.

Comparative applications in PMLA prosecutions

Practical Implications

A bail application founded on prolonged incarceration should present a precise procedural chronology: arrest, filing of the prosecution complaint, cognizance, supply of documents, framing of charge, witnesses cited and examined, adjournments, and the realistic timetable for conclusion. The application should separately identify delay attributable to the prosecution, institutional circumstances or the defence. A constitutional plea is weakened where the record shows that the accused has caused substantial avoidable delay.

The applicant should address Section 45 directly. It is not sufficient to argue only that the complaint has been filed or that bail has been granted in the predicate case. The statutory twin conditions, the prosecution's right to oppose, and the ordinary bail risks must be met on their own terms, while the Article 21 submission must explain why continued detention has become disproportionate notwithstanding those considerations.

Where evidence is documentary and already seized, that fact should be demonstrated rather than merely asserted. Equally, a case involving vulnerable witnesses requires a workable protective proposal. Passport surrender, territorial restrictions, mandatory appearance, periodic reporting where appropriate, disclosure of mobile and residence details, non-contact directions, and an express cancellation clause are practical safeguards recognised across the authorities.

The pending status of the predicate case requires careful treatment. It may be relevant to the likely duration and structure of the proceedings, as it was in the operative decision. It does not, however, by itself prevent a PMLA prosecution or eliminate the need to apply Section 45, as the authority setting aside bail for failure to apply that provision makes clear.

Key Takeaways

• Section 45 establishes the ordinary and stringent statutory framework: opportunity to the Public Prosecutor and, upon opposition, reasonable grounds to believe that the accused is not guilty and unlikely to commit an offence on bail.
• Article 21 prevents the statutory regime from becoming a basis for indefinite or punitive undertrial detention where trial cannot reasonably conclude within a foreseeable period.
• There is no universal custody period that entitles an accused to release. Duration must be evaluated with trial progress, remaining witnesses, volume of material, attribution of delay and the necessity of custody.
• The fact that a trial has commenced does not foreclose bail. It may instead require conditions calibrated to protect witnesses and secure regular attendance.
• Bail in the predicate offence, documentary evidence already in custody, absence of a demonstrated flight risk and a credible compliance proposal may strengthen the liberty analysis, but none is individually determinative.
• A court granting constitutional bail must still engage with Section 45 and must not treat completion or progress of the predicate case as a substitute for the separate PMLA assessment.

Full Text:

2026 (9) TMI 558 - CALCUTTA HIGH COURT