2025 (6) TMI 1821 - SCH - Money Laundering

Money Laundering - predicate offence - parties have informed that charges have not yet been framed not to speak of the trial commencing - HELD THAT - Keeping in view the fact that the maximum sentence under PMLA is seven years we are of the view that present is a fit case for enlarging the petitioner on bail insofar as the PMLA case is concerned. Accordingly we direct that the petitioner may be produced before the learned Special Court within a maximum period of seven days from today who shall thereafter release the petitioner on bail on appropriate terms and conditions. SLP disposed off.

Summary

1. ISSUES PRESENTED and CONSIDERED

The core legal questions considered by the Court in these Special Leave Petitions (SLPs) are:

• Whether the petitioners, accused in predicate offences and undergoing investigation and prosecution under the Prevention of Money Laundering Act, 2002 (PMLA), are entitled to bail despite the pendency of their cases before the Special Court.
• Whether the prolonged incarceration of the petitioners, in the absence of framing of charges and commencement of trial, justifies the grant of bail under the PMLA regime.
• The applicability and interpretation of the maximum sentence prescribed under the PMLA in the context of bail considerations.
• The balancing of interests between the enforcement agency's mandate to investigate and prosecute money laundering offences and the fundamental right of the accused to liberty, especially when the trial has not commenced.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Entitlement to Bail under PMLA in the Context of Prolonged Pre-trial Incarceration

Relevant Legal Framework and Precedents: The Prevention of Money Laundering Act, 2002, is a special statute aimed at combating money laundering and related offences. It prescribes stringent conditions for bail, reflecting the seriousness of the offences. However, the Act does not explicitly exclude the application of general principles of bail under the Code of Criminal Procedure, 1973, especially where prolonged incarceration occurs without trial. Supreme Court precedents have emphasized the need to balance the right to liberty against the need for effective investigation and trial in economic offences.

Court's Interpretation and Reasoning: The Court recognized that the petitioners have been named accused in predicate offences and have been under investigation by the Enforcement Directorate (ED) under the PMLA. The Court noted that the Enforcement Case Information Report (ECIR) has been filed, and prosecution complaints have been taken cognizance of by the Special Court. Despite this, the Court observed that charges have not yet been framed, nor has the trial commenced in any of the cases.

The Court placed significant emphasis on the duration of pre-trial custody, noting that the petitioners have been in custody since dates ranging from August 2021 to October 2023, amounting to prolonged incarceration without trial. The Court considered the maximum sentence prescribed under the PMLA, which is seven years, and reasoned that the long incarceration without trial is disproportionate to the maximum punishment envisaged.

Key Evidence and Findings: The factual matrix shows that the petitioners have been in custody for extended periods, with no charges framed and no trial initiated. This factual position was confirmed by the counsel for both parties upon the Court's query.

Application of Law to Facts: Applying the principle that prolonged pre-trial detention without commencement of trial is an infringement of the right to personal liberty, the Court concluded that the petitioners' continued incarceration was unjustified. The Court found that the petitioners' bail applications deserved consideration in light of their long custody and the maximum sentence under the PMLA.

Treatment of Competing Arguments: The Enforcement Directorate, representing the respondent, opposed bail on the ground of the seriousness of the offences and the need to prevent interference with the investigation. However, the Court balanced this against the fundamental right to liberty and the absence of trial progress. The Court implicitly held that the enforcement interest does not outweigh the right to bail when trial is not underway and incarceration is prolonged.

Conclusions: The Court concluded that the petitioners are entitled to bail in the PMLA cases. The Court directed their production before the Special Court within seven days, which shall release them on bail on appropriate terms and conditions.

Issue 2: Consideration of Special Circumstances Including Gender and Duration of Custody

Relevant Legal Framework and Precedents: The Court's approach to bail applications often considers special circumstances such as gender, health, and the length of custody. The Supreme Court has previously recognized that women accused should be treated with sensitivity in custodial matters.

Court's Interpretation and Reasoning: In one of the petitions, the Court specifically noted that the petitioner is a lady who has been in custody since August 2023 without trial. This factor reinforced the Court's view that bail was appropriate in this case, acknowledging the need for humane treatment and the avoidance of unnecessary incarceration.

Key Evidence and Findings: The petitioner's gender and the length of custody were undisputed facts. The Court relied on these to strengthen its direction for bail.

Application of Law to Facts: The Court applied the principle of humane treatment and the right to liberty, especially in the case of female accused, to justify bail.

Treatment of Competing Arguments: No specific competing arguments on this point were detailed, but the Court's emphasis on the petitioner's gender indicates a recognition of the need for special consideration.

Conclusions: The Court found the petitioner's gender and prolonged custody to be significant factors supporting bail.

3. SIGNIFICANT HOLDINGS

The Court established the following core principles and determinations:

• "Having regard to the long incarceration of the petitioner and keeping in view the fact that the maximum sentence under PMLA is seven years, we are of the view that present is a fit case for enlarging the petitioner on bail insofar as the PMLA case is concerned."
• The absence of framing of charges and commencement of trial, despite prolonged custody, militates in favor of granting bail.
• The fundamental right to liberty must be balanced against the enforcement interest, and prolonged pre-trial detention without trial is unjustified under the PMLA framework.
• Special circumstances such as gender and the length of custody are relevant considerations in bail applications.
• The Special Court is directed to release the petitioners on bail on appropriate terms and conditions within a stipulated time frame.