Rajasthan High Court | Bail Denied to Ex-PHED Minister in PMLA Case Over ₹2 Crore Bribery Allegations in Jal Jeevan Mission Tenders
Safiya Malik
The High Court of Rajasthan Single Bench of Justice Praveer Bhatnagar dismissed a bail application filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita (BNSS). The court concluded that the petitioner, who was arrested in connection with allegations of money laundering under the Prevention of Money Laundering Act, 2002 (PMLA), failed to establish grounds for bail. After reserving the order on August 8, 2025, and pronouncing it on August 26, 2025, the court declared that the bail application stands dismissed. The judgment stressed that the petitioner, holding a position of public trust, had failed to uphold the integrity expected from a ministerial role.
The petitioner, a former Minister of the Public Health Engineering Department (PHED), was arrested in connection with ECIR No.JPZO/29/2023, dated August 21, 2023, registered for offences punishable under Sections 3 and 4 of the PMLA. The Enforcement Directorate (ED) alleged that the petitioner had conspired with co-accused individuals to secure tenders illegally and had received bribes that were laundered through his son's firm.
The petitioner contended that he had been falsely implicated in the matter. His counsel argued that no prima facie case was established against him under Sections 3 and 4 of PMLA. The defence stated that the petitioner was appointed as the PHED Minister in November 2021, while the alleged co-accused had been securing tenders since 2019 using forged certificates and bribery. The petitioner had even suspended a department official for wrongly certifying a forged document and had blacklisted certain contractors. The defence maintained that this demonstrated his intent to curb corruption rather than participate in it.
It was further argued that the petitioner’s name did not appear in the charge sheet filed against the co-accused and was absent from the Enforcement Case Information Report (ECIR). The defence contended that subsequent FIRs filed against the petitioner were politically motivated. One of the key arguments was that the alleged amount of Rs. 50 lakh credited to the petitioner’s son’s firm constituted a loan, later repaid, and not proceeds of crime. Counsel for the petitioner also stated that co-accused individuals had retracted their statements under Section 50 of the PMLA, which could not be relied upon against the petitioner.
The petitioner argued that the bail applications of co-accused, namely Piyush, Padam Chand, and Sanjay Badaya, were allowed by the Supreme Court due to prolonged custody and the unlikelihood of trial completion. Based on parity, the petitioner claimed entitlement to bail.
The respondent, represented by the Enforcement Directorate, opposed the bail application, asserting that evidence demonstrated the petitioner’s direct involvement in laundering proceeds of crime. The ED alleged that the petitioner, through his associate Sanjay Badaya, facilitated the illegal award of tenders and received Rs. 2.01 crore out of a total Rs. 5.40 crore in bribes. An amount of Rs. 50 lakh was traced to the account of the petitioner’s son’s firm, Sumangalam Landmark LLP, despite no legitimate business dealings or financial capacity of the entities transferring the funds.
The ED submitted that statements of multiple witnesses under Section 50 of the PMLA confirmed that funds were layered through intermediaries to disguise bribes as legitimate transactions. The respondent argued that the petitioner’s role as a minister aggravated the seriousness of the offence, noting that he was entrusted with public funds but instead engaged in corrupt practices.
The ED further submitted that the petitioner could not claim parity with co-accused who were granted bail, as their custody periods were significantly longer, and their roles differed. It was argued that the petitioner held a central role in the alleged conspiracy, which disqualified him from seeking the benefit of parity. The prosecution also contested the defence’s reliance on the proviso of Section 45(1) of PMLA, stating that the threshold of Rs. 1 crore was exceeded, as the petitioner was alleged to have accepted bribes amounting to Rs. 2.01 crore.
Justice Praveer Bhatnagar recorded a series of detailed observations regarding the legal framework and the evidence presented. The court noted: “It is trite law that the court must take into consideration the twin conditions outlined in Section 45 of the Act when reviewing a bail application. Adhering to the strict requirements of Section 45 is essential to achieve the objectives of the PMLA.”
The court further observed: “Statements recorded under Section 50 of the PMLA are unequivocally admissible in court. Unlike provisions in some other laws, PMLA investigating officers are not classified as police officers. Therefore, the restrictions imposed by Section 25 of the Indian Evidence Act, which pertains to the admissibility of confessions made to police officers, do not apply to statements made under Section 50 of the PMLA.”
On the evidentiary value of such statements, the court stated: “Statements made during custody under Section 50 of the PMLA require thorough scrutiny. They may be considered inadmissible against the accused if individuals are not properly informed of their rights. The evidential value of a Section 50 statement is closely tied to the legality of the investigation. If the investigation contains flaws or procedural errors, the credibility of the statement is significantly compromised.”
The court held: “The prosecution must establish guilt through evidence that goes beyond mere statements made under Section 50 of PMLA and independent evidence is essential for securing a conviction.” However, it was noted: “Once a statement is recorded under Section 50, it is presumed to be true unless proven otherwise. This places the burden of disproving the authenticity or veracity of the statement on the accused, particularly under Section 24 of the PMLA, which mandates a reverse burden of proof on the accused.”
Assessing the petitioner’s alleged involvement, the court observed: “The financial transactions involving the petitioner’s son’s firm from 04.07.2023 to 18.05.2023 indicate that Rs. 50 lakh was credited to the firm’s account, likely at the behest of Sanjay Badaya or his associates. These transactions occurred in the account of the petitioner’s son without legitimate justification.” The court noted that several individuals who transferred funds had no financial capacity or business relationship with the petitioner or his son, confirming the prosecution’s claim of layered laundering.
The judgment recorded: “The immovable properties purchased by the petitioner’s son’s firm remain unexplained. The firm’s account shows an income of only Rs. 3.13 lakhs as of the specified date. Additionally, the other partner in the firm has not contributed any funds. Even if we assume that some loan amount has been taken from the bank, the firm lacks the means to repay the principal amount along with the interest incurred.”
Rejecting the argument of parity, the court stated: “The petitioner cannot be equated with the other co-accused, particularly since the petitioner has only been in custody for three months. The responsibilities associated with the petitioner’s role within the governmental department carry a weight that is not comparable to those of other accused parties.”
The court added: “Additionally, the expression ‘A fence eating the crop’ serves as a concerning caution in this context. It illustrates that the petitioner, in a position of power and responsibility, has not upheld the integrity and trust that are vital for someone in a high-ranking governmental role responsible for the diligent execution of public duties.”
The court concluded by directing that the bail application of the petitioner be dismissed. It recorded: “In conclusion, the bail application of the petitioner stands dismissed.”
Advocates Representing the Parties
For the Petitioner: Mr. V.R. Bajwa, Senior Advocate assisted by Mr. Snehdeep Khayalia, Advocate and Ms. Savita Nathawat, Advocate.
For the Respondent: Mr. Akshay Bhardwaj, Advocate for ED, Mr. Rajat Sharma, Advocate, Mr. Ashutosh Ranga, Advocate, and Mr. Ajay Singh, Advocate.
Case Title: Mahesh Joshi v. Enforcement Directorate
Neutral Citation: 2025: RJ-JP:33707
Case Number: S.B. Criminal Miscellaneous Bail Application No.8007/2025
Bench: Justice Praveer Bhatnagar
