Supreme Court Grants Bail in PMLA Case Citing Trial Delay & Long Custody, Distinguishes Recent Precedent

Post By 24law
February 20, 2025

Pranav B Prem

In a significant ruling, the Supreme Court granted bail to an accused in a money laundering case, citing prolonged incarceration and an unlikely conclusion of the trial in a reasonable timeframe. The decision distinguished a recent precedent that had emphasized the strict twin conditions under Section 45 of the Prevention of Money Laundering Act (PMLA).

Background of the Case

A bench comprising Justices Abhay S. Oka and Ujjal Bhuyan was hearing the plea of Udhaw Singh, who had been in custody for 14 months in connection with alleged money laundering. The Enforcement Directorate (ED) had listed 225 witnesses, yet only one had been examined so far. Given this scenario, the Court noted that the trial was unlikely to conclude in the near future.

Court's Observations on Delay in Trial

While granting bail, the Court referred to the landmark cases of Union of India v. K.A. Najeeb and V. Senthil Balaji v. Deputy Director, Directorate of Enforcement. Justice Oka, in his judgment, highlighted: "Under the Statutes like PMLA, the minimum sentence is three years, and the maximum is seven years. 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 Court emphasized that Section 45(1)(ii) of PMLA does not authorize indefinite detention when there is no possibility of a timely trial. The Court added: "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."

Distinguishing the Kanhaiya Prasad Judgment

One of the key aspects of this ruling was its clarification regarding the recent decision in Assistant Director v. Kanhaiya Prasad. In that case, the Supreme Court had cancelled bail, holding that the twin conditions under Section 45 of PMLA were mandatory. The ED relied on this precedent to oppose bail in the present case. However, the Court distinguished the facts, stating: "After having perused the judgment, we find that this was a case where the decisions of this Court in the case of Union of India v. K.A. Najeeb and in the case of V. Senthil Balaji were not applicable on facts. Perhaps that is the reason why these decisions were not placed before the coordinate Bench." Further, the Court pointed out that in Kanhaiya Prasad, the accused had only been in custody for less than seven months, and there was no finding of unreasonable delay in the trial. Therefore, the refusal to grant bail in that case was justified, but it did not apply to Udhaw Singh’s situation, where the trial was expected to take several years.

Solicitor General’s Concession & Final Order

The Solicitor General, during the proceedings, fairly conceded that the precedent in V. Senthil Balaji could be followed. Consequently, the Court allowed the appeal, directing the Special Court to release the appellant on bail with appropriate conditions. The Court laid down conditions, including:

The appellant must regularly attend the Special Court proceedings.

The appellant must surrender his passport.

The appellant must fully cooperate with the trial to ensure an expeditious hearing.