# Padam Singhee v. Directorate of Enforcement

- **Citation:** (2024) 11 ILRA 421
- **Court:** High Court of Judicature at Allahabad
- **Decided:** 2024-11-14
- **Case number:** Criminal Misc. Bail Application No. 32236 of 2024
- **Bench:** Samit Gopal
- **Source:** https://unisonlegal.in/judgment/allahabad-high-court/padam-singhee-v-directorate-of-enforcement-51022
- **Pages:** 24

## Headnote

Criminal law- Criminal Procedure Code,
1973 - Section 439 - Bail application-
Prevention of Money Laundering Act, 2002
- Sections 3, 4 & 45 - Bail - Prolonged
incarceration - Delay in trial -Trial of
predicate
offence
yet
to
begin
-
Cognizance taken in PMLA case without
charge sheet in predicate offence -
existence of predicate offence is sine qua
non for trial under PMLA - Delay in trial
infringes fundamental right under Article
21 - PMLA - Section 45 - Twin
conditions - Not absolute - Can be
relaxed in cases of undue delay and where
accused is already on bail in predicate
offence-Bail granted. (Paras 5,6,8 and 9)

HELD:
After having heard learned counsels for the
parties and perusing the records, it is evident
that- (1) The applicant is in custody in
422 INDIAN LAW REPORTS ALLAHABAD SERIES
connection with an offence under Prevention of
Money Laundering Act. (2) In the predicate
offence he has been granted bail. The said order
stands final till date. (3) No charge sheet has
been submitted in the predicate offence with
regards to the present issue being committed
relating to Punjab National Bank till date. (4)
The law with regards to trial is clear and well
settled. (5) The case under PMLA and the
predicate offence has to be tried together by the
same court which is not possible in the present
case as of now since predicate offence is yet to
see its charge sheet, if any. (6) The challenge
to declaring M/s SVOGL Oil Gas & Energy
Limited as "Wilful Defaulter" and its account as
"Fraud" was successful and the same was
struck down by Hon'ble Delhi High Court. The
said order also attains finality. (7) Custodial
interrogation is not needed. The principle of
"bail is a rule and jail is an exception" is being
consistently followed and repeatedly being
reiterated and reminded by the Apex Court and
other Courts. (9) The applicant is in jail since
07.02.2024. (10) There are no chances of his
absconding. (11) Looking to the facts and
circumstances of the case, it is a fit case for
grant of bail. (Para 8)

Bail Application allowed. (E-14)

List of Cases cited:

## Text

_Characters 0–39,725 of 81,256. This is a partial read: ask again with offset=39725 for what follows._

11 All. Padam Singhee Vs. Directorate of Enforcement
421

17. The Constitution Bench in Cox
and Kings Ltd. (supra) examined the issue
as to whether a non-signatory to an
agreement can be held bound by it. It is
held that the said issue may require
consideration of evidence on factual
aspects and ordinarily it should be left to
the tribunal to decide the same. At the
referral stage, a referral court should not
enter into the said issue. Following the law
laid down in the Constitution Bench
judgement in Cox and Kings Ltd. (supra),
the
Supreme
Court
while
deciding
Arbitration
Petition
No.38
of
2020,
constituted the arbitral tribunal but left it
open to the parties to raise the said issue
before it. Accordingly, I am of the view
that
the
said
issue
which
involves
appreciation of evidence should be left to
the wisdom of the arbitral tribunal for being
decided in accordance with law.

18. In the result, I am of the opinion
that the arbitration clause in the partnership
agreement dated 2 March 2020 read with
supplementary partnership agreement dated
20 February 2021 would merit constitution
of an arbitral tribunal. This would be
without
prejudice
to
the
pleas
and
contentions of the parties.

19. The court proposes the name of
Mr. Justice Vipin Sinha, Former Judge of
this Court R/o 10, N.K. Mukherji Road,
behind Rajapur Roadways Workshop,
Civil
Lines,
Prayagraj
(Mob.
No.
9415309091) as arbitrator to decide the
disputes between the parties. The fees
shall be as provided under the Fourth
Schedule
to
the
Arbitration
and
Conciliation Act, 1996.

20. Let the office seek consent and
obtain disclosures as contemplated under
Section 11(8) of the Act.

21. The instant application will be put
up for further orders after receipt of
consent/disclosures from the proposed
arbitrator in the month of December, 2024.
----------
(2024) 11 ILRA 421
APPELLATE JURISDICTION
CRIMINAL SIDE
DATED: ALLAHABAD 14.11.2024

BEFORE

THE HON'BLE SAMIT GOPAL, J.

Criminal Misc. Bail Application No. 32236 of
2024

Padam Singhee ...Applicant
Versus
Directorate of Enforcement
 ...Opposite Party

Counsel for the Applicant:
Ram M. Kaushik

Counsel for the Opposite Party:
Jitendra Prasad Mishra, Pawan Kumar
Srivastava

Criminal law- Criminal Procedure Code,
1973 - Section 439 - Bail application-
Prevention of Money Laundering Act, 2002
- Sections 3, 4 & 45 - Bail - Prolonged
incarceration - Delay in trial -Trial of
predicate
offence
yet
to
begin
-
Cognizance taken in PMLA case without
charge sheet in predicate offence -
existence of predicate offence is sine qua
non for trial under PMLA - Delay in trial
infringes fundamental right under Article
21 - PMLA - Section 45 - Twin
conditions - Not absolute - Can be
relaxed in cases of undue delay and where
accused is already on bail in predicate
offence-Bail granted. (Paras 5,6,8 and 9)

HELD:
After having heard learned counsels for the
parties and perusing the records, it is evident
that- (1) The applicant is in custody in
422 INDIAN LAW REPORTS ALLAHABAD SERIES
connection with an offence under Prevention of
Money Laundering Act. (2) In the predicate
offence he has been granted bail. The said order
stands final till date. (3) No charge sheet has
been submitted in the predicate offence with
regards to the present issue being committed
relating to Punjab National Bank till date. (4)
The law with regards to trial is clear and well
settled. (5) The case under PMLA and the
predicate offence has to be tried together by the
same court which is not possible in the present
case as of now since predicate offence is yet to
see its charge sheet, if any. (6) The challenge
to declaring M/s SVOGL Oil Gas & Energy
Limited as "Wilful Defaulter" and its account as
"Fraud" was successful and the same was
struck down by Hon'ble Delhi High Court. The
said order also attains finality. (7) Custodial
interrogation is not needed. The principle of
"bail is a rule and jail is an exception" is being
consistently followed and repeatedly being
reiterated and reminded by the Apex Court and
other Courts. (9) The applicant is in jail since
07.02.2024. (10) There are no chances of his
absconding. (11) Looking to the facts and
circumstances of the case, it is a fit case for
grant of bail. (Para 8)

Bail Application allowed. (E-14)

List of Cases cited:

1. V. Senthil Balaji
Vs Deputy Director,
Directorate of Enforcement: 2024 SCC OnLine
SC 2626

2. K.A. Najeeb, (2021) 3 SCC 713

3.
Manish
Sisodia
Vs
Directorate
of
Enforcement, 2024 SCC OnLine SC 1920

4. Arvind Kejriwal Vs C.B.I.: 2024 SCC OnLine
SC 2550

5. Prem Prakash Vs U.O.I. through the
Directorate of Enforcement: 2024 SCC OnLine
SC 2270

6. Jalaluddin Khan Vs U.O.I.: 2024 SCC OnLine
SC 1945

7.
Ramkripal
Meena
Vs
Directorate
of
Enforcement: 2024 SCC OnLine SC 2276
8. Sk. Javed Iqbal Vs St. of U.P.: (2024) 8 SCC
293

9. Javed Gulam Nabi Shaikh Vs St. of Mah. &
anr.: 2024 SCC OnLine SC 1693

10. Shoma Kanti Sen Vs St. of Mah.: (2024) 6
SCC 591

11.
Sanjay
Agarwal
Vs
Directorate
of
Enforcement: 2022 SCC OnLine SC 1748

(Delivered by Hon'ble Samit Gopal, J.)

1. Heard Sri Kapil Sibal, learned
Senior
Advocate
through
Video
Conferencing assisted by Sri Tanveer
Ahmad Mir, Sri Ram M. Kaushik, learned
counsels for the applicant, who are present
in Court and Sri Gyan Prakash, learned
Senior Advocate / Additional Solicitor
General, Government of India assisted by
Sri J.P. Mishra and Sri Kuldeep Srivastava,
learned counsels for the Enforcement of
Directorate/opposite party.

2.
This
Criminal
Misc.
Bail
Application under Section 439 Code of
Criminal Procedure,1973 has been filed by
the applicant- Padam Singhee with the
following prayers:-

"It is, therefore, most respectfully
prayed that this Hon'ble Court may
graciously be pleased to allow the present
bail application and direct to release the
applicant on bail in Enforcement Case
Information
Report
bearing
No.
ECIR/DLZO-I/35/2021 under Section 3⁄4 of
Prevention of Money Laundering Act, 2002
lodged by the Directorate of Enforcement
on 26.03.2021.

It is further prayed that this
Hon'ble Court may graciously be pleased
to release the Applicant on Interim Bail in
relation to Enforcement Case Information
Report bearing No. ECIR/DLZO-I/35/2021
11 All. Padam Singhee Vs. Directorate of Enforcement
423
under Section 3⁄4 of Prevention of Money
Laundering Act, 2002 lodged by the
Directorate of Enforcement on 26.03.2021;
during the pendency of the present case
before this Hon'ble Court, otherwise the
personal liberty of the Applicant shall be at
stake which cannot be compensated in any
manner and/or to pass such other and
further order this Hon'ble Court may deem
fit and proper under the facts and
circumstance of the case."

3. The facts of the case are that a
complaint dated 05.04.2024 was filed by
the Assistant Director (PMLA), Directorate
of Enforcement, Delhi Zonal Office-I, New
Delhi against (i) M/s SVOGL Oil Gas &
Energy
Limited
(through
the
then
Chairman and Managing Director, Sh.
Prem Singhee and the then Joint Managing
Director) Tower-1, Fifth Floor, NBCC
Plaza, Sector V, Push Vihar, New Delhi110017, (ii) Mr. Padam Singhee S/o Late
Sh. Chimanlal Singhee, Director of M/s.
SVOGL and; (iii) Mr. Prem Singhee S/o
Late Sh. Chimanlal Singhee, Director of
M/s. SVOGL, (iv) M/s Practical Properties
Private
Limited
(through
Authorized
Representative), 432-E, F/F Devli Village
New Delhi South Delhi-110052, (v) M/s
Bee Tee Credit Marketing Private Limited
(through Authorized Representative), 90/N,
New Alipore, 3rd Floor Flat No. 4, Block
E, Kolkata West Bengal 700053, (vi) M/s
Resimpex Real Estate Private Limited
(through Authorized Representative), 605,
Suncity Business Tower, Golf Course
Road,
Sector-54,
Gurugram,
Haryana
122001 and (vii) M/s Realtech Property
Solution
Private
Limited
(through
Authorized Representative), 133-A, Flat
No. 7, F/F, R/S, B/P, kh No. 301/350
Saidulajab Westend Marg, New Delhi
South West Delhi 110030 with the
following prayers:-

"Therefore, in the facts and
circumstances stated hereinabove, it is most
humbly prayed that;

a. This Hon'ble Court may be
pleased to take cognizance of the offence of
money laundering as defined u/s 3,
punishable u/s 4 of Prevention of Money
Laundering Act, 2002, and proceed in
accordance with law, issue summons
against accused persons, try and punish
according to law.

b. To pass appropriate order for
confiscation of properties, to the extent of
proceeds of crime of this case, frozen
during search action dated 15.12.2024 and
06.01.2024 being proceeds of crime in
terms of section 8 (5) of Prevention of
Money Laundering Act, 2002.

c.
Confiscate
the
properties
attached
vide
Provisional
Attachment
Order No. 04/2024 dated 25.01.2024 in
terms of section 8(5) of PMLA, 2002.

d.
Confiscate
the
properties
attached
vide
Provisional
Attachment
Order No.06/2024 dated 22.03.2024 in
terms of section 8(5) of PMLA, 2002.

e. The Complaint craves leave of
the Hon'ble Court to file Supplementary
prosecution Complaint, if required.

f. To grant any other relief, which
this Hon'ble Court deem fit and proper, in
the facts and circumstances of the case."

The court took cognizance upon
the same and summoned the accused
persons vide an order of the same date. The
applicant is in jail since 07.02.2024 in the
said case.

4. The allegation involved are under
the Prevention of Money Laundering Act,
2002 in the present matter. M/s SVOGL
Oil Gas & Energy Limited availed credit
facilities from Punjab National Bank
between 2006 and 2017. Padam Singhee
and Prem Singhee key managerial persons
424 INDIAN LAW REPORTS ALLAHABAD SERIES
of M/s SVOGL and others through
associate entities siphoned off the loans
availed by indulging in criminal conspiracy
and generated Proceeds of Crime within the
meaning of Section 2(1) (u) of PMLA. The
loss incurred to the Complainant Bank is to
the tune of Rs. 252,61,46,476/- which
constitutes Proceeds of Crime in the instant
case.

5. Learned counsel for the applicant
submitted as under:-

(1) Loan was taken by the
company of which the applicant is the Joint
Managing Director.

(2) The said loan was not repaid.

(3) The account of loan of the
company
was
declared
NPA
with
retrospective effect from 26.12.2013.

(4) No offence thus is made out
in the above mentioned situation and
circumstances.

(5) On the basis of a complaint
lodged by Punjab National Bank, NOIDA,
a First Information Report bearing FIR No.
RCBD1/2021/E/0001, dated 10.03.2021
was registered by the Central Bureau of
Investigation under Sections 120B r/w 409
& 420 I.P.C. and Section 13(2) r/w
13(1)(d) of Prevention of Corruption Act,
1988 against the applicant and others being
the predicate offence in which the applicant
has been granted bail vide order dated
14.5.2024 passed by Special Judicial
Magistrate (C.B.I.), Ghaziabad, copy of the
said order has been annexed as annexure
no. 5 to the affidavit.

(6) No charge sheet till date has
been submitted in the predicate offence
particularly with regards to the issue
relating to Punjab National Bank.

(7) The claim of the Bank for
declaring M/s SVOGL Oil Gas & Energy
Limited as a "Wilful Defaulter" or its
account as "Fraud" has been struck down
by Hon'ble Delhi High Court vide its order
dated 12.5.2023 in which the challenge was
of classifying the accounts as "Red Flag
Accounts" or "Fraud Accounts" in writ
petition being Writ Petition (C) No. 306 of
2019 connected with other petitions. The
said order has been placed before the Court
which is annexure no. 11 to the affidavit.

(8) The predicate offence since
remains to see the charge sheet and the
present matter is also to be tried together by
the same court, there will be delay in the
trial since charge sheet has not been
submitted in the predicate offence and as
such the trial cannot proceed.

(9) No fraud has been committed
since the claim of the Bank for declaring
the Company as "Wilful Defaulter" or its
account as "Fraud" has been struck down
by Hon'ble Delhi High Court.

(10) After release of the applicant
on bail in the predicate offence the said
order is not under challenge and has
attained finality till date.

(11) Reliance has been placed on
orders / judgments of the Apex Court to
submit that subsequent to grant of bail to
the accused in the predicate offence, he is
entitled to bail, delay in trial violates the
right of the accused under Article 21 of the
Constitution of India, the period of
detention of the accused also has to be
considered, the twin conditions under
Section 45 of PMLA imposing restraint of
grant of bail to an accused is not absolute,
the grant of bail is a rule whereas jail is an
exception and that the principle of law of
bail is not to be withheld as a punishment.
The following judgments / orders of the
Apex Court have been placed for the same
before the Court:

A. In the case of V. Senthil
Balaji v. Deputy Director, Directorate of
Enforcement : 2024 SCC OnLine SC
11 All. Padam Singhee Vs. Directorate of Enforcement
425
2626 the Apex Court has been held as
under:

"EFFECT OF THE DELAY IN
DISPOSAL OF THE CASES

14. As of now, the appellant has
been incarcerated for more than 15
months in connection with the offence
punishable under Section 4 of the
PMLA. The minimum punishment for an
offence punishable under Section 4 is
imprisonment for three years, which may
extend to seven years. If the scheduled
offences are under paragraph 2 of Part A of
the Schedule in the PMLA, the sentence
may extend to 10 years. In the appellant's
case, the maximum sentence can be of 7
years as there is no scheduled offence
under paragraph 2 of Part A of Schedule II
alleged against the appellant.

15. We have already narrated that
there are three scheduled offences. In the
main case (CC Nos. 22 and 24 of 2021),
there are about 2000 accused and 550
prosecution witnesses cited. Thus, it can be
said that there are more than 2000 accused
in the three scheduled offences, and the
number of witnesses proposed to be
examined exceeds 600.

16. This Bench is also dealing
with MA no. 1381 of 2024 seeking various
reliefs such as a transfer of investigation of
scheduled offences, appointment of special
public prosecutor etc. The orders passed in
the said application would reveal that the
sanction to prosecute all public servants,
including the appellant, has now been
granted. Charges have not been framed in
the scheduled offences.

17. Thus, on the issue of framing
of charge or discharge, a large number of
accused will have to be heard. The trial of
the scheduled offences will be a warrant
case. Therefore, even if the trials of the
scheduled offences are expedited, the
process of framing charges may take a few
months as many advocates representing
more than 2000 accused persons will have
to be heard. There are bound to be further
proceedings arising out of orders on charge.
After that, more than 600 witnesses will
have to be examined. Documentary and
electronic evidence is relied upon in the
scheduled offences. Even if few witnesses
are dropped, a few hundred witnesses will
have to be examined. Presence of all the
accused will have to be procured and their
statements under Section 313 of the
Criminal Procedure Code, 1973 will have
to be recorded. Therefore, even in ideal
conditions, the possibility of the trial of
scheduled offences concluding even within
a reasonable time of three to four years
appears to be completely ruled out.

18. In the offence under the
PMLA, the charge has not been framed. In
view of Clause (d) of sub-section (1) of
Section 44 of PMLA, the procedure for
sessions trial will have to be followed for
the prosecution of an offence punishable
under Section 4 of the PMLA. In view of
clause (c) of sub-section (1) of Section 44,
it is possible to transfer the trial of the
scheduled offences to the Special Court
under the PMLA.

19.
The
offence
of
money
laundering has been defined under Section
3 of the PMLA which reads thus:

"3.
Offence
of
moneylaundering.-Whosoever
directly
or
indirectly attempts to indulge or knowingly
assists or knowingly is a party or is actually
involved in any process or activity
connected with the [proceeds of crime
including its concealment, possession,
acquisition or use and projecting or
claiming] it as untainted property shall be
guilty of offence of money-laundering.

[Explanation.-For the removal
of doubts, it is hereby clarified that,-
426 INDIAN LAW REPORTS ALLAHABAD SERIES

(i) a person shall be guilty of
offence of money-laundering if such person
is found to have directly or indirectly
attempted to indulge or knowingly assisted
or knowingly is a party or is actually
involved in one or more of the following
processes or activities connected with
proceeds of crime, namely:-

(a) concealment; or

(b) possession; or

(c) acquisition; or

(d) use; or

(e)
projecting
as
untainted
property; or

(f)
claiming
as
untainted
property, in any manner whatsoever;

(ii)
the
process
or
activity
connected with proceeds of crime is a
continuing activity and continues till such
time a person is directly or indirectly
enjoying the proceeds of crime by its
concealment or possession or acquisition or
use or projecting it as untainted property or
claiming it as untainted property in any
manner whatsoever.]

20. Existence of proceeds of
crime is a condition precedent for the
offence under Section 3. Proceeds of
crime have been defined in Section 2(u) of
the PMLA which reads thus:

"2
...................................................

(u) "proceeds of crime" means
any property derived or obtained, directly
or indirectly, by any person as a result of
criminal activity relating to a scheduled
offence or the value of any such property or
where such property is taken or held
outside the country, then the property
equivalent in value held within the country
[or abroad];

Explanation.-For the removal of
doubts, it is hereby clarified that "proceeds
of crime" include property not only derived
or obtained from the scheduled offence but
also any property which may directly or
indirectly be derived or obtained as a result
of any criminal activity relatable to the
scheduled offence;"

21. Hence, the existence of a
scheduled offence is sine qua non for
alleging the existence of proceeds of crime.
A property derived or obtained, directly or
indirectly, by a person as a result of the
criminal activity relating to a scheduled
offence constitutes proceeds of crime. The
existence of proceeds of crime at the time
of the trial of the offence under Section 3 of
PMLA can be proved only if the scheduled
offence is established in the prosecution of
the scheduled offence. Therefore, even if
the trial of the case under the PMLA
proceeds, it cannot be finally decided
unless the trial of scheduled offences
concludes. In the facts of the case, there
is no possibility of the trial of the
scheduled offences commencing in the
near future. Therefore, we see no
possibility of both trials concluding
within a few years.

22. In the case of K.A. Najeeb,
(2021) 3 SCC 713, in paragraph 17 this
Court held thus:

"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
11 All. Padam Singhee Vs. Directorate of Enforcement
427
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
UAPA being used as the sole metric for
denial of bail or for wholesale breach of
constitutional right to speedy trial."

(emphasis added)

23. In the case of Manish Sisodia
v. Directorate of Enforcement, 2024 SCC
OnLine SC 1920 in paragraphs 49 to 57,
this Court held thus:

"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 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
observations
made
in
Gudikanti
Narasimhulu (supra), which read thus:

"10. In the aforesaid context, we
may remind the trial courts and the High
Courts of what came to be observed by this
Court in Gudikanti Narasimhulu v. Public
Prosecutor, High Court, (1978) 1 SCC 240.
We quote:

"What is often forgotten, and
therefore warrants reminder, is the object
to keep a person in judicial custody
pending trial or disposal of an appeal.
Lord Russel, C.J., said [R v. Rose, (1898)
18 Cox]:

"I observe that in this case bail
was refused for the prisoner. It cannot be
too strongly impressed on the, magistracy
of the country that bail is not to be withheld
as a punishment, but that the requirements
as to bail are merely to secure the
attendance of the prisoner at trial.""

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 is an exception is,
at times, followed in breach. On account of
non-grant of bail even in straight forward
open and shut cases, this Court is flooded
with huge number of bail petitions thereby
adding to the huge pendency. It is high time
that the trial courts and the High Courts
428 INDIAN LAW REPORTS ALLAHABAD SERIES
should recognize the principle that "bail is
rule and jail is exception".

54. In the present case, in the
ED matter as well as the CBI matter, 493
witnesses have been named. The case
involves
thousands
of
pages
of
documents and over a lakh pages of
digitized documents. It is thus clear that
there is not even the remotest possibility
of the trial being concluded in the near
future.
In
our
view,
keeping
the
appellant behind the bars for an
unlimited period of time in the hope of
speedy completion of trial would deprive
his fundamental 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.

..............................................
" (emphasis added)

24. There are a few penal statutes
that make a departure from the provisions
of Sections 437, 438, and 439 of the
Criminal Procedure Code, 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 nonobstante clause for overriding
the provisions of Sections 437 to 439 of the
CrPC. 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. Considering the gravity of the
offences in such statutes, expeditious
disposal of trials for the crimes under these
statutes is contemplated. Moreover, such
statutes contain provisions laying down
higher threshold for the grant of bail. The
expeditious disposal of the trial is also
warranted
considering
the
higher
threshold set for the grant of bail. Hence,
the requirement of expeditious disposal of
cases must be read into these statutes.
Inordinate delay in the conclusion of the
trial and the higher threshold for the
grant of bail cannot go together. It is a
well-settled principle of our criminal
jurisprudence that "bail is the rule, and
jail is the exception." These stringent
provisions regarding the grant of bail,
11 All. Padam Singhee Vs. Directorate of Enforcement
429
such as Section 45(1)(iii) of the PMLA,
cannot become a tool which can be used
to incarcerate the accused without trial
for an unreasonably long time.

26. There are a series of decisions
of this Court starting from the decision in
the case of K.A. Najeeb, which hold that
such stringent provisions for the grant of
bail do not take away the power of
Constitutional Courts to grant bail on
the grounds of violation of Part III of the
Constitution of India. We have already
referred to paragraph 17 of the said
decision, which lays down that the rigours
of such provisions will melt down where
there is no likelihood of trial being
completed in a reasonable time and the
period of incarceration 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
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. Najeeb,
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 Article 21 of the
Constitution of India will be defeated. In
a given case, if an undue delay in the
disposal of the trial of scheduled offences
or disposal of trial under the PMLA can
be
substantially
attributed
to
the
accused, the Constitutional Courts can
always decline to exercise jurisdiction to
430 INDIAN LAW REPORTS ALLAHABAD SERIES
issue prerogative writs. An exception will
also be in a case where, considering the
antecedents of the accused, there is every
possibility of the accused becoming a real
threat to society if enlarged on bail. The
jurisdiction to issue prerogative writs is
always discretionary.

28.
Some
day,
the
courts,
especially the Constitutional Courts, will
have to take a call on a peculiar situation
that arises in our justice delivery system.
There are cases where clean acquittal is
granted by the criminal courts to the
accused after very long incarceration as an
undertrial. When we say clean acquittal, we
are excluding the cases where the witnesses
have turned hostile or there is a bona fide
defective investigation. In such cases of
clean acquittal, crucial years in the life of
the accused are lost. In a given case, it
may amount to violation of rights of the
accused
under
Article
21
of
the
Constitution which may give rise to a
claim for compensation.

29.
As
stated
earlier,
the
appellant has been incarcerated for 15
months
or
more
for
the
offence
punishable under the PMLA. In the facts
of the case, the trial of the scheduled
offences and, consequently, the PMLA
offence is not likely to be completed in
three to four years or even more. If the
appellant's detention is continued, it will
amount to an infringement of his
fundamental right under Article 21 of
the Constitution of India of speedy trial."

B. In the case of Arvind
Kejriwal
v.
Central
Bureau
of
Investigation : 2024 SCC OnLine SC
2550 the Apex Court has held as under:

"38.
The
evolution
of
bail
jurisprudence in India underscores that the
'issue of bail is one of liberty, justice,
public safety and burden of the public
treasury, all of which insist that a
developed jurisprudence of bail is integral
to a socially sensitised judicial process'.
The principle has further been expanded
to
establish
that
the
prolonged
incarceration of an accused person,
pending trial, amounts to an unjust
deprivation of personal liberty. This
Court in Union of India v. K.A. Najeeb has
expanded this principle even in a case
under the provisions of the Unlawful
Activities
(Prevention)
Act,
1967
(hereinafter 'UAPA') notwithstanding the
statutory embargo contained in Section 43D(5) of that Act, laying down that the
legislative policy against the grant of bail
will melt down where there is no
likelihood of trial being completed within
a reasonable time. The courts would
invariably bend towards 'liberty' with a
flexible approach towards an undertrial,
save and except when the release of such
person
is
likely
to
shatter
societal
aspirations, derail the trial or deface the
very criminal justice system which is
integral to rule of law."

C. In the case of Prem Prakash
v.
Union
of
India
through
the
Directorate of Enforcement : 2024 SCC
OnLine SC 2270 the Apex Court has held
as under:

"9. The appellant was taken into
custody on 11.08.2023. He was already in
custody from 25.08.2022 in ECIR No. 4 of
2022. His application for bail was rejected
by the Special Judge on 20.09.2023. He
preferred a bail application before the High
Court. The High Court has declined bail to
the appellant. Aggrieved, the appellant is
before us.

10. We have heard Mr. Ranjit
Kumar, Learned Senior counsel for the
appellant, ably assisted by Mr. Indrajit
Sinha and Mr. Siddharth Naidu, learned
advocates. We have also heard Mr. S.V.
Raju, Learned Additional Solicitor General,
11 All. Padam Singhee Vs. Directorate of Enforcement
431
ably assisted by Mr. Zoheb Hussain and
Mr. Kanu Agarwal for the respondents.
Learned Senior Counsels on both sides
have placed their respective contentions
and also filed detailed written submissions.

SECTION
45
PMLACONTOURS

11. Considering that the present is
a bail application for the offence under
Section 45 of PMLA, the twin conditions
mentioned
thereof
become
relevant.
Section 45(1) of PMLA reads as under:-

"45. Offences to be cognizable
and non-bailable. (1) Notwithstanding
anything
contained
in
the
Criminal
Procedure Code, 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 an 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 or is accused
either on his own or along with other coaccused of money-laundering a sum of less
than one crore rupees, may be released on
bail, if the Special Court so directs:

Provided further that the Special
Court shall not take cognizance of any
offence punishable under Section 4 except
upon a complaint in writing made by-

(i) the Director; or

(ii) any officer of the Central
Government
or
a
State
Government
authorised in writing in this behalf by the
Central Government by a general or special
order made in this behalf by that
Government."

In Vijay Madanlal Choudhary v.
Union of India, 2022 SCC OnLine SC 929,
this Court categorically held that while
Section 45 of PMLA restricts the right of
the accused to grant of bail, it could not
be said that the conditions provided
under
Section
45
impose
absolute
restraint on the grant of bail. Para 131 is
extracted hereinbelow:-

"131. It is important to note that
the twin conditions provided under Section
45 of the 2002 Act, though restrict the right
of the accused to grant of bail, but it
cannot be said that the conditions
provided under Section 45 impose
absolute restraint on the grant of bail.
The discretion vests in the court, which is
not arbitrary or irrational but judicial,
guided by the principles of law as provided
under Section 45 of the 2002 Act. ..."

These observations are significant
and if read in the context of the recent
pronouncement
of
this
Court
dated
09.08.2024 in Criminal Appeal No. 3295 of
2024 [Manish Sisodia (II) v. Directorate of
Enforcement], it will be amply clear that
even under PMLA the governing principle
is that "Bail is the Rule and Jail is the
Exception". In para 53 of [Manish Sisodia
(II), this Court observed as under:-

"53.....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 is an exception is,
at times, followed in breach. On account of
non-grant of bail even in straight forward
open and shut cases, this Court is flooded
with huge number of bail petitions thereby
adding to the huge pendency. It is high
time that the trial courts and the High
Courts should recognize the principle
that "bail is rule and jail is exception."
432 INDIAN LAW REPORTS ALLAHABAD SERIES

All that Section 45 of PMLA
mentions is that certain conditions are to be
satisfied. The principle that, "bail is the
rule and jail is the exception" is only a
paraphrasing of Article 21 of the
Constitution of India, which states that
no person shall be deprived of his life or
personal liberty except according to the
procedure established by law. Liberty of
the individual is always a Rule and
deprivation is the exception. Deprivation
can only be by the procedure established
by law, which has to be a valid and
reasonable procedure. Section 45 of
PMLA by imposing twin conditions does
not re-write this principle to mean that
deprivation is the norm and liberty is the
exception. As set out earlier, all that is
required is that in cases where bail is
subject to the satisfaction of twin
conditions, those conditions must be
satisfied.

12. Independently and as has
been emphatically reiterated in Manish
Sisodia (II) (supra) relying on Ramkripal
Meena v. Directorate of Enforcement (SLP
(Crl.) No. 3205 of 2024 dated 30.07.2024)
and Javed Gulam Nabi Shaikh v. State of
Maharashtra, 2024 SCC OnLine SC 1693,
where the accused has already been in
custody for a considerable number of
months and there being no likelihood of
conclusion of trial within a short span,
the rigours of Section 45 of PMLA can
be suitably relaxed to afford conditional
liberty. Further, Manish Sisodia (II)
(supra) reiterated the holding in Javed
Gulam Nabi Sheikh (Supra), that keeping
persons behind the bars for unlimited
periods of time in the hope of speedy
completion of trial would deprive the
fundamental right of persons under Article
21 of the Constitution of India and that
prolonged
incarceration
before
being
pronounced
guilty ought
not
to
be
permitted to become the punishment
without trial. In fact, Manish Sisodia (II)
(Supra) reiterated the holding in Manish
Sisodia (I) v. Directorate of Enforcement
(judgment dated 30.10.2023 in Criminal
Appeal No. 3352 of 2023) where it was
held as under:-

"28. Detention or jail before
being pronounced guilty of an offence
should not become punishment without
trial.