“Further Incarceration of the Petitioners Pending Trial Would Violate Their Right Under Article 21”: Madras High Court Grants Bail in PMLA Proceedings
Sanchayita Lahkar
The High Court of Madras Single Bench of Justice Sunder Mohan held that the continued custody of two petitioners, arrested under the Prevention of Money Laundering Act, 2002, was unconstitutional in view of prolonged pre-trial detention and no likelihood of early trial conclusion. The Court directed that both petitioners be released on bail, subject to stringent conditions. It ruled that further incarceration would be contrary to Article 21 of the Constitution of India, given the delay in the commencement of trial and the absence of any complaint of witness tampering. The Court granted bail to both individuals upon satisfaction of the statutory bail bond and surety requirements before the XIII Additional Special Judge for CBI Cases, Chennai.
The Directorate of Enforcement registered ECIR No.09 of 2024 on 11.03.2024, based on multiple predicate offences recorded under the Narcotic Drugs and Psychotropic Substances Act, 1985, by various enforcement agencies including the Narcotics Control Bureau, New Delhi, and Customs Departments in Mumbai and Chennai. These predicate offences included Sections 9A, 25A, 29, 22(c), 23(c), 24, 30 and 25 read with Section 8(c) of the NDPS Act.
In connection with the ECIR, the first petitioner was arrested on 26.06.2024 and remanded to judicial custody on 15.07.2024. The second petitioner was arrested on 12.08.2024 and remanded the following day. The prosecution alleged that both individuals engaged in money laundering activities connected to narcotics trafficking.
The prosecution stated that the first petitioner was involved in three previous enforcement actions. The first case, from 2015, involved the alleged export of 50 kilograms of pseudoephedrine and was registered by Chennai Customs. The second case, in 2019, was initiated by Mumbai Customs for an attempted export of 38.867 kilograms of ketamine through the business entity M/s. Cube Impex. The third case, in 2024, was filed by the Narcotics Control Bureau in New Delhi for trafficking 50.070 kilograms of pseudoephedrine.
As for the second petitioner, he was alleged to have been involved only in the 2019 case and was not named as an accused in the 2015 and 2024 predicate offences. Nevertheless, the prosecution maintained that he had benefited from proceeds of crime derived from the offences in question.
The Directorate of Enforcement alleged that both petitioners received large unaccounted cash credits into their bank accounts, which were disproportionate to their declared income. It was further claimed that the loans availed by them were in the nature of accommodation entries, and the petitioners failed to adequately explain the sources of cash.
A statement was recorded from the first petitioner under Section 50 of the PMLA on 08.05.2024, in which he allegedly admitted that the cash investments he made originated from proceeds of narcotics trafficking. The prosecution asserted that several properties—both movable and immovable—were acquired by the petitioners during and after the registration of predicate offences.
Following the investigation, the Directorate filed a complaint before the Principal Sessions Judge, Chennai on 18.10.2024. The complaint named 20 accused, cited 19 witnesses, and annexed 190 documents running into over 20,000 pages. At the time of hearing the bail applications, summons had not yet been served on some of the accused.
The first petitioner argued that under Section 19 of the PMLA, the arresting authority was required to record valid reasons for the belief that the person is guilty. He submitted that the reasons offered were unsustainable since they were based on unverified cash deposits without established links to the alleged predicate offences. He further stated that he had already been granted bail in the 2024 predicate offence by the NCB and anticipatory bail in the 2019 case. In the 2015 case, he was not arrested.
The second petitioner contended that he had no involvement in two of the predicate cases and had been granted bail in the third. He challenged the prosecution’s inconsistent narrative and highlighted that the properties allegedly acquired through illicit means were purchased before the date of the first scheduled offence. He also pointed out the lack of a demonstrable link between the properties acquired and any criminal activity.
Both petitioners argued that their prolonged detention without trial violated Article 21 of the Constitution of India and relied on recent Supreme Court precedents including Manish Sisodia v. Directorate of Enforcement, Prem Prakash v. Union of India, and Javed Gulam Nabi Shaikh v. State of Maharashtra.
The respondent opposed the bail applications on the grounds that grant of bail in predicate offences does not negate money laundering charges. The prosecution also pointed to the political influence allegedly wielded by the petitioners, asserting that their release could undermine the trial process and ongoing investigations in foreign jurisdictions. However, no complaint of witness tampering had been submitted at the time of the hearing.
The Court recorded that the petitioners had been granted bail or anticipatory bail in all predicate offences and noted that all properties alleged to have been acquired from proceeds of crime had already been attached. It further stated:
“The trial is not likely to be concluded in the near future, as summons to some of the accused have not been served. There are 19 witnesses cited by the prosecution and several documents have been relied upon. Besides that, there are 20 accused in this case.”
On the issue of continued incarceration, the Court referred to the ruling of the Hon’ble Supreme Court in Manish Sisodia v. Directorate of Enforcement, which held:
“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.”
The Court also cited observations in Javed Gulam Nabi Shaikh v. State of Maharashtra, where the Supreme Court had noted:
“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.”
On the delay in production of the first petitioner before the Special Court after arrest, the Court noted:
“The first accused was thereafter kept in custody for five days to enable the respondent to produce the first accused before the learned Principal Sessions Judge, Chennai. The first accused was thereafter produced before the Court on 15.07.2024 and therefore, he was in illegal detention for nearly four days.”
The Court took judicial notice of the Supreme Court’s later decision in Subhash Sharma, stating: “If the accused is not produced before the Court within 24 hours, the arrest would be rendered illegal and would be in violation of Article 22(2) of the Constitution of India.”
With respect to allegations of political influence, the Court observed:“There is no complaint of any tampering or attempt to influence witnesses. It is needless to say that if the petitioners are found influencing any witness, it is always open to the prosecution to seek cancellation of bail.”
It concluded: “Considering the various factors, this Court is of the view that further incarceration of the petitioners pending trial would violate their right under Article 21 of the Constitution of India.”
The High Court ordered that both petitioners be released on bail upon furnishing a bond of ₹5,00,000 each, along with two sureties for a like sum, to the satisfaction of the XIII Additional Special Judge for CBI Cases, Chennai. The Court mandated that the sureties provide photographic and biometric identification along with appropriate documents for verification.
The petitioners were directed to surrender their passports before the trial court unless already seized by the Directorate of Enforcement. They were also required to appear regularly before the trial court and were warned that unjustified absence would entitle the prosecution to move for cancellation of bail.
The Court further directed the petitioners not to contact any witness directly or indirectly, and not to abscond during the trial. They were instructed not to tamper with evidence or interfere with the investigation in any manner. Additionally, the petitioners were to provide their mobile phone numbers to the trial court and keep them updated.
In the event of breach of any of the above conditions, the trial court was authorized to take action in accordance with law as though the bail had been granted by the Magistrate himself. The Court held that if either petitioner were to abscond, it would be open to the prosecution to initiate proceedings under Section 269 of the Bharatiya Nyaya Sanhita, 2023.
Advocates Representing the Parties
For the Petitioners: Mr. Abudu Kumar Rajarathinam, Senior Counsel for Mr. K.T. Sankara Subramanian; Mr. Sri Charan Rangarajan, Senior Counsel for Mr. K.T. Sankara Subramanian
For the Respondents: Mr. A.R.L. Sundaresan, Additional Solicitor General of India assisted by Mr. N. Ramesh, Special Public Prosecutor
Case Title: Jaffer Sadiq and Mohamed Saleem v. Assistant Director, Directorate of Enforcement
Case Number: Crl.O.P. Nos. 3508 & 3510 of 2025
Bench: Justice Sunder Mohan
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