Delhi HC Grants Bail Under PMLA as Woman Accused Not Automatically Subject to Section 45 Twin Cond

Leena Paulose Vs Directorate of Enforcement (Delhi High Court)

In, the Delhi High Court considered a bail application filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), read with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA), in connection with ECIR/54/DLZO-II/2021 registered by the Directorate of Enforcement (ED).

The ECIR originated from investigations into another ECIR concerning Religare Finvest Limited. During that investigation, a witness disclosed that she had received calls purportedly from officials connected with the Prime Minister’s Office and Home Minister’s Office. Technical analysis allegedly revealed that the calls were made through an application capable of masking the caller’s identity. The caller was identified as Sukesh Chandrasekhar, who was already in judicial custody in another matter.

An FIR was thereafter registered alleging offences including extortion, cheating, impersonation, criminal conspiracy, and offences under the Information Technology Act. According to the prosecution, more than Rs. 200 crores were extorted from the complainant through impersonation of senior government officials and false assurances of securing bail for her husband. The prosecution alleged that cash was collected through intermediaries and transferred through hawala channels and shell entities, including entities allegedly connected with the petitioner.

The ED subsequently initiated proceedings under Sections 3 and 4 of the PMLA. The prosecution complaint alleged that the petitioner operated five proprietorship concerns, including M/s Nail Artistry and M/s Super Car Artistry, through which funds were allegedly routed. The investigation also alleged that she was linked to a residential property acquired through a benami transaction, possessed luxury vehicles allegedly purchased from proceeds of crime, booked chartered flights costing approximately Rs. 7.29 crores, and opened a Demat account for share trading allegedly at the behest of Sukesh Chandrasekhar.

The petitioner was arrested in connection with the predicate FIR on 05.09.2021 and in the PMLA case on 09.10.2021. Her earlier bail plea before the Sessions Court had been rejected.

Before the High Court, the petitioner argued that she was entitled to the benefit of the proviso to Section 45 of the PMLA because she was a woman, and therefore the stringent twin conditions for bail under Section 45 would not apply. She also sought the benefit of Section 479 of the BNSS, contending that she had already undergone detention exceeding one-half of the maximum prescribed sentence of seven years under the PMLA. It was further argued that the prosecution had cited 311 witnesses and the matter was still at the stage of arguments on charge, making early conclusion of trial unlikely.

The petitioner also relied on parity with co-accused persons who had already been granted bail, including persons allegedly involved in hawala operations and handling of proceeds of crime. She contended that she was merely a beneficiary of the alleged proceeds of crime under the belief that the funds came from legitimate sources and that she had her own independent professional and business income.

The ED opposed the application, arguing that women are not automatically exempt from the rigours of Section 45 of the PMLA and that the petitioner was allegedly a key member of an organised crime syndicate. It was further contended that she was not entitled to the benefit of Section 479 of the BNSS because multiple criminal cases were pending against her and because delays in proceedings were attributable to the accused persons.

The High Court examined the applicability of Section 45 of the PMLA and referred to Supreme Court decisions including Kalvakuntla Kavitha v. Directorate of Enforcement and Shashi Bala v. Directorate of Enforcement. The Court observed that while grant of bail to a woman under the proviso to Section 45 is discretionary, the stringent twin conditions ordinarily do not apply unless exceptional circumstances are shown. The Court held that the statutory protection is available to all women and is not confined only to “vulnerable women.” It further held that the allegations regarding the petitioner’s role and the amount of proceeds of crime were insufficient to deny her the benefit of the proviso.

The Court next considered Section 479 of the BNSS relating to prolonged incarceration of undertrial prisoners. It noted that the petitioner had undergone custody for more than four years and six months against a maximum sentence of seven years under the PMLA. Although the ED argued that delays caused by the accused should be excluded, the Court observed that successive supplementary prosecution complaints had been filed over a period exceeding three years and that even before the alleged delays attributable to the accused, the petitioner had already completed more than half of the maximum sentence period.

The Court also considered Section 479(2) of the BNSS dealing with multiple pending cases. It held that the provision should not be interpreted in a manner that completely deprives an undertrial prisoner of the benefit of statutory bail protections. According to the Court, multiplicity of proceedings is a relevant factor but does not automatically bar grant of bail after the custody threshold under Section 479(1) has been crossed.

The Court further noted that out of 18 accused persons in the ECIR, 12 had already been granted bail. It observed that co-accused persons allegedly involved in hawala operations, handling of proceeds of crime, or enjoyment of such proceeds had already been enlarged on bail. The Court held that the petitioner’s role could not be considered graver than those accused persons and that she was entitled to parity.

While noting that bail had separately been declined to the petitioner in the predicate FIR involving MCOCA offences, the Court distinguished the present PMLA proceedings on the grounds that the stringent restrictions under MCOCA differed from those under the PMLA, the maximum sentence under the PMLA was only seven years, and parity considerations favoured the petitioner in the money laundering proceedings.

Accordingly, the High Court allowed the bail application and directed release of the petitioner on furnishing a personal bond of Rs. 10 lakhs with two sureties, subject to conditions including appearance before the Special Court, surrender of passport, disclosure of residential address and mobile number, non-tampering with evidence, and refraining from committing any offence during the bail period.

FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT

1. By way of this application, under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 [“BNSS”], read with Section 45 of the Prevention of Money Laundering Act, 2002 [“PMLA”], the petitioner seeks regular bail in connection with ECIR/54/DLZO-II/2021, dated 08.08.2021, under Sections 3 and 4 of the PMLA.

2. I have heard Mr. Anant Malik, learned counsel for the petitioner, and Mr. Vivek Gurnani, learned counsel for the Directorate of Enforcement [“ED”]. The counter affidavit of the respondent is also on record.

A. PROSECUTION CASE

3. The prosecution case, as it emerges from the material on record, is summarised hereinbelow:

A. The genesis of the present ECIR lies in an investigation pertaining to another ECIR/DLZO-II/05/2019 [“the 2019 ECIR”], related to Religare Finvest Limited. During the investigation in respect of the 2019 ECIR, it was found that one Ms. Aditi Singh had made certain financial transactions, on the basis of which she was summoned on 17.06.2021. Her statement was recorded under Section 50 of the PMLA, and she tendered her mobile phone.

B. After CDR and technical analysis of her phone, it was revealed that she was getting calls, purportedly from Government of India officers, specifically the Home Minister’s office and the Prime Minister’s office. It was also found that the calls were made through a mobile application, by which the caller can hide his/her real number and choose a number that he/she wants to reflect on the screen of the recipient.

C. The caller was identified to be Sukesh Chandrasekhar @ Sukash Chandrasekhar [hereinafter, “Sukesh”], who was in judicial custody in Rohini Jail, in connection with unrelated criminal proceedings. Sukesh is the petitioner’s husband.

D. FIR No. 208/2021, dated 07.08.2021, lodged at Special Cell, Delhi, for offences punishable under Sections 170, 384, 386, 388, 419, 420, 506, 120B of the Indian Penal Code, 1860 [“IPC”] and Section 66(D) of the Information Technology Act, 2000 [“the IT Act”], was registered on the complaint of Ms. Aditi Singh, with respect to extortion of money to the tune of more than Rs. 200 crores, against unknown persons.

E. Upon a demand being made by Sukesh, modalities for payment were communicated to Aditi Singh. Once the time and place was fixed, two brothers, by the names of Pradeep Ramdanee and Deepak Ramnani, would reach the place and take the delivery in terms of the arranged modalities. The same pattern was repeated multiple times. The money would then be transferred through hawala channels, either within India or outside. The money was routed through various entities, including the petitioner herein, as well as shell companies through accommodation entry providers, and other co-accused.

F. In furtherance of a complaint, Delhi Police laid a trap and apprehended Pradeep Ramdanee and Deepak Ramnani, who used to collect cash from the complainant on the instructions of Sukesh. Sukesh was thereafter arrested on 08.08.2021 from Rohini Jail. The allegation against him was that he extorted more than Rs. 200 crores from Aditi Singh, including by impersonation of senior government functionaries. She was promised the assistance of the said government functionaries to secure bail for her husband, who was in judicial custody in connection with the affairs of Religare Finvest Limited.

G. Sections 384, 386, 388, 419, 420, and 120B of the IPC are scheduled offences under Part A of the PMLA. ED, therefore, recorded ECIR/54/DLZO-II/2021 to investigate offences of money laundering under Sections 3 and 4 of the PMLA. The present bail application arises out of proceedings emanating from this ECIR.

H. The first prosecution complaint was filed on 04.12.2021 before the Sessions Court, Patiala House Courts. In the prosecution complaint, ED relied upon 192 documents, including statements under Section 50 of the PMLA, bank accounts statements and other documents related to proceeds of crime. Eight individuals were arrayed as accused persons, including the present petitioner, who is Sukesh’s wife. Five more supplementary prosecution complaints were filed, taking the total number of accused persons to eighteen.

I. In respect of the predicate offence, a chargesheet has also been filed in FIR No. 208/2021, lodged at Police Station Special Cell. In the chargesheet, Maharashtra Control of Organised Crime Act, 1999 [“MCOCA”] has been invoked, alleging that Sukesh and the petitioner were running an organised crime syndicate alongwith their associates. The petitioner has been named in four prior cases with Sukesh, details of which are as follows:

i. FIR No. 186/2017, lodged at Police Station Crime Branch, Delhi, under Sections 201/120B of the IPC and Sections 7/12/13 of the Prevention of Corruption Act, 1988.

ii. Crime No. 24/2013, registered at Central Crime Branch Police, Chennai, under Sections 406/409/420/34 of the IPC and Section 66D of the IT Act.

iii. Crime No. 33/2015, registered at Economic Offences Wing, Mumbai, under Sections 420/120B of the IPC and Sections 3/4 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978¹.

iv. Crime No. 64/2013 [RC 6E/2014/BSFC] registered at Central Crime Branch, Chennai, under Sections 406/409/420/120B of the IPC and Sections 13(1)(d)/13(2) of the Prevention of Corruption Act, 1988.

J. The petitioner was arrested in connection with FIR No. 208/2021, lodged at Police Station Special Cell, on 05.09.2021. While she was in judicial custody, she was arrested in connection with ECIR/54/DLZO-II/2021 on 09.10.2021.

K. The investigation revealed that the petitioner had five proprietorship concerns, namely M/s Nail Artistry, M/s Super Car Artistry, M/s News Express Post, M/s L S Fisheries, and M/s L S Education. She had opened M/s Nail Artistry in 2018, and was doing business of Nail Salon at Kochi, Chennai, and Bangalore, whereas M/s Super Car Artistry was opened in September 2020, and was doing business of sales/purchase of used high end vehicles. The three other entities are stated to be relatively inactive. Analysis of bank accounts of these companies revealed that, during the period of crime, i.e. June 2020 to August 2021, various amounts were credited from different unrelated firms/individuals in these accounts.

L. On the basis of statements of co-accused B. Mohanraj, Jeetender Kothari, Kamlesh Kothari, and the petitioner herself, it was revealed that the petitioner was the owner of a residential property [bearing Nos. 12 and 13, Kanathur Reddy Kuppam Village, Opp. Mayajal, ECR, Chennai] purchased through a benami transaction.

M. During investigation, 26 high end vehicles purchased from the proceeds of crime were seized from the premises linked to Sukesh and his associates. Out of the 26 vehicles, 16 vehicles were seized from the premises of the petitioner. All these vehicles were, in fact, purchased in the name of M/s Super Car Artistry or M/s Nail Artistry.

N. Statements of Shiva Subramanian and Anand Moorthy revealed that the transfer of approximately Rs. 20 lakhs in the bank account of M/s Nail Artistry took place by swiping debit/credit cards on 1% commission, against which cash was taken from the petitioner.

O. During the period of crime, the petitioner booked multiple chartered flights, costing approximately Rs. 7.29 crores, using the services of Halo Airways Pvt. Ltd.

P. The petitioner is also alleged to have opened a Demat account, and traded in shares at the behest of Sukesh, who claimed to have inside information.

4. The petitioner had earlier preferred a bail application before the Sessions Court, which was dismissed vide order dated 19.05.2023. The Sessions Court noted that the rigours of Section 45 of the PMLA are not required to be fulfilled by the petitioner, on account of being a woman. However, the Court dismissed her bail application having regard to sufficiency of evidence, seriousness of allegations against the petitioner, possibility of tampering evidence, and the fact that efforts were already being made for early completion of trial.

B. SUBMISSIONS BY LEARNED COUNSEL FOR THE PARTIES

5. Mr. Malik, in support of the application, submitted as follows:

a. The petitioner, being a woman, falls within the proviso to Section 45 of the PMLA, and therefore the rigours of the twin conditions prescribed under Section 45 would not apply to her. Reference in this connection was made to Supreme Court judgments in Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement² and Kalvakuntla Kavitha v. Directorate ofEnforcement³.

b. The petitioner seeks the benefit of Section 479 of the BNSS (corresponding to Section 436A of the Code of Criminal Procedure [“CrPC”]), which provides that an undertrial who has undergone detention for up to one-half of the maximum prescribed sentence, is ordinarily entitled to be released on bail. The maximum punishment prescribed under Section 4 of the PMLA is seven years, whereas the petitioner was arrested on 09.10.2021, and has already remained in judicial custody for more than four years and six months.

c. The prosecution has cited as many as 311 witnesses, and the matter is still at the stage of arguments on charge, with no likelihood of the trial concluding in the near future.

d. The petitioner also claims parity with several co-accused persons, who have already been granted bail by this Court as well as the Trial Court. Mr. Malik submitted that out of the 18 accused persons in the present ECIR, 12 have already been granted bail, three by this Court and nine by the Special Court. It was submitted that both co-accused Arun Muthoo and Avtar Singh Kochar were granted bail despite the rigours of Section 45 of the PMLA being applicable to them, and the petitioner’s case stands on an even better footing, both on facts and applicability of the twin conditions for grant of bail.

e. The petitioner was merely a beneficiary of the alleged proceeds of crime, under the bonafide impression that the money was being earned by her husband through legitimate means, and was being transferred to her, in the ordinary course of their matrimonial relationship. In support of this contention, reliance is placed on an Income Tax notice received by Sukesh for payment of tax and penalties for the Assessment Year 2012-13 till 2018-19. In particular, his tax liability for Assessment Year 2018-19 alone amounted to Rs. 1,23,16,61,880/-. It was further submitted that the petitioner is an independent businesswoman, as well as a professional model, actress, and dentist, having sufficient legitimate sources of income of her own. In support of this contention, she has placed on record her ITR acknowledgement for the Assessment Year 2020-2021, which reflects an income of Rs.43,69,050/-.

f. It was further submitted that co-accused Jacqueline Fernandez, whose role was allegedly similar to that of the petitioner, i.e. beneficiary of the proceeds of crime, was chargesheeted but not arrested at all.

g. Lastly, it was submitted that the petitioner is not a flight risk. Mr. Malik pointed out that the petitioner did not abscond even after being served notice by the ED; in fact, she joined and cooperated with the investigation throughout. She has deep roots in society, and there is no likelihood of her evading the process of law, if released on bail.

6. Mr. Gurnani, on the other hand, submitted as follows:

a. Women are not automatically exempted from the rigours of Section 45 of the PMLA. It was argued that the proviso to Section 45 cannot be construed as mandatory in nature, as such an interpretation would risk enabling misuse, by allowing women to be used as conduits or scapegoats in money laundering activities. To this effect, Mr. Gurnani relied on Saumya Charausia v. Directorate ofEnforcement⁴.

b. The petitioner is not entitled to the benefit of Section 479 of the BNSS, as she is involved in multiple cases, at least four with co-accused Sukesh. In view of Section 479(2) of the BNSS, she cannot claim the benefit of prolonged incarceration.

c. In any event, this is a fit case for invocation of the second proviso to Section 479(1), and detention beyond the provided period.

d. It was also argued that any delay attributable to the accused must be excluded while computing the period of custody for the purposes of Section 479 of the BNSS. Learned counsel relied upon Vijay Madanlal Chaudhary v. Union of India⁵ and Satender Kumar Antil v. CBI⁶. Although the matter is at the stage of arguments on charge, ED has already concluded its arguments, and it is the petitioner and other accused, who are responsible for delaying the proceedings.

e. On the issue of parity, Mr. Gurnani submitted that parity must be assessed in light of the role attributed to each accused. In the present case, it was argued that the petitioner was not a peripheral participant, but rather the second-in-command of the alleged crime syndicate, and that the proceeds of crime were actively handled and moved at her instance. It was further submitted that the utilisation of the proceeds of crime, as detailed earlier, occurred subsequent to the commission of the predicate offence, thereby establishing her active involvement.

f. The authorities cited by learned counsel for the parties are dismissed at the appropriate juncture, below.

C. ANALYSIS

I. APPLICABILITY OF SECTION 45 OF PMLA

7. The first question that falls for consideration is whether the petitioner, being a woman, should be granted the benefit of the proviso to Section 45 of the PMLA. The provision reads as follows:

“Section 45: Offences to be cognizable and non bailable:

(1) Notwithstanding anything contained in the Code of Criminal Procedure, 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 a 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 co-accused of money-laundering a sum of less than one crore rupees may be released on bail, if the Special Court so directs:…….”⁷

8. Although Section 45 provides for satisfaction of certain conditions for grant of bail in cases under PMLA, the proviso expressly vests discretion upon the Court, in case the accused is a woman. The Supreme Court, in K. Kavitha, while examining the scope and applicability of the proviso to Section 45 of the PMLA, and after considering its earlier decision in Saumya Chaurasia, held as follows:

“16. A perusal of the above proviso would thus reveal that the proviso permits certain category of accused including woman to be released on bail, without the twin requirement under Section 45 of the PMLA to be satisfied. No doubt that, as argued by the learned ASG, in a given case the accused even if a woman may not be automatically entitled to benefit of the said proviso and it would all depend upon thefacts and circumstances of each case.

17. However, when a statute specifically provides a special treatment for a certain category of accused, while denying such a benefit, the Court will be required to give specific reasons as to why such a benefit is to be denied.

xxx xxx xxx

22. We find that the learned Single Judge erroneously observed that the proviso to Section 45(1) of the PMLA is applicable only to a “vulnerable woman”.

23. We further find that the learned Single Judge totally misapplied the ratio laid down by this Court in the case of Saumya Chaurasia v. Directorate of Enforcement.

24. A perusal of the judgment of this Court in the case of Saumya Chaurasia (supra) would show that this Court has observed that the Courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 of the PMLA and similar provisions in the other Acts. The Court observes that the persons of tender age and women who are likely to be more vulnerable may sometimes be misused by unscrupulous elements and made scapegoats for committing such crime.

25. No doubt that this Court observes that nowadays the educated and well-placed women in the society engage themselves in commercial ventures and enterprises and advertently or inadvertently engage themselves in the illegal activities. The Court therefore puts a caution that the Courts, while deciding such matters, should exercise the discretion judiciously using their prudence.

26. This Court in the case of Saumya Chaurasia (supra), while paraphrasing proviso to Section 45(1) of the PMLA stated in paragraph 23 as follows:

“23. …No doubt the courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 and similar provisions in the other Acts, as the persons of tender age and women who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements …….”

27. This Court, in the carefully couched paragraph extracted above used the phrase “persons of tender age and woman who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements”. This is vastly different from saying that the proviso to Section 45(1) of the PMLA applies only to “vulnerable woman”. Further, this Court in the case of Saumya Chaurasia (supra) does not say that merely because a woman is highly educated or sophisticated or a Member of Parliament or a Member of Legislative Assembly, she is not entitled to the benefit of the proviso to Section 45(1) of the PMLA.”⁸

9. In Shashi Bala, the ED, in fact, itself admitted that the rigours of Section 45 of the PMLA would not be applicable to a woman.

10. The import of the above decisions is that in the case of a woman accused, even under PMLA, discretion is vested in the Court with regard to bail, and she is not to be subjected to the rigours of Section 45, unless exceptional reasons are demonstrated. The benefit of the proviso to Section 45 of the PMLA is available to all women as a class, and is not limited to “vulnerable women”, to the exclusion of educated or sophisticated individuals. ED’s case turns on the alleged involvement of the petitioner as a principal accused in the predicate case, and the quantum of proceeds of crime, which allegedly came into her hands, or passed through her hands. In my view, these factors are insufficient to oust the protection conferred upon the petitioner by statute. No such special circumstances have been shown in the present case.

II. APPLICABILITY OF SECTION 479 OF BNSS

11. It has been submitted on behalf of the petitioner that she is entitled to the benefit of Section 479 of the BNSS [corresponding to Section 436A of the CrPC], which reads as follows:

“Section 479: Maximum period for which under-trial prisoner can be detained

(1) Where a person has, during the period of investigation, inquiry or trial under this Sanhita of an offence under any law (not being an offence for which the punishment of death or life imprisonment has been specified as one of the punishments under that law) undergone detention for a period extending up to one-half of the maximum period of imprisonment specified for that offence under that law, he shall be released by the Court on bail:

Provided that where such person is a first-time offender (who has never been convicted of any offence in the past) he shall be released on bond by the Court, if he has undergone detention for the period extending up to one-third of the maximum period of imprisonment specified for such offence under that law:

Provided further that the Court may, after hearing the Public Prosecutor and for reasons to be recorded by it in writing, order the continued detention of such person for a period longer than one-half of the said period or release him on bail bond instead of his bond:

Provided also that no such person shall in any case be detained during the period of investigation, inquiry or trial for more than the maximum period of imprisonment provided for the said offence under that law. Explanation.—In computing the period of detention under this section for granting bail, the period of detention passed due to delay in proceeding caused by the accused shall be excluded.

2. Notwithstanding anything in sub-section (1), and subject to the third proviso thereof, where an investigation, inquiry or trial in more than one offence or in multiple cases are pending against a person, he shall not be released on bail by the Court.

3. The Superintendent of ail, where the accused person is detained, on completion of one-half or one third of the period mentioned in sub­section (1), as the case may be, shall forthwith make an application in writing to the Court to proceed under sub-section (1) for the release of such person on bail.”⁹

12. This provision was earlier incorporated in the CrPC as Section 436A. Although there are some significant differences in the text of the two statutes, the legislative objective and statutory interpretation of Section 436A of the CrPC have been considered inter alia in the following decisions of the Supreme Court:

a. In Satender Kumar Antil, the Court held as follows:

“63. Section 436-A of the Code has been inserted by Act 25 of 2005. This provision has got a laudable object behind it, particularly from the point of view of granting bail. This provision draws the maximum period for which an undertrial prisoner can be detained. This period has to be reckoned with the custody of the accused during the investigation, inquiry and trial. We have already explained that the word “trial” will have to be given an expanded meaning particularly when an appeal or admission is pending. Thus, in a case where an appeal is pending for a longer time, to bring it under Section 436-A, the period of incarceration in all forms will have to be reckoned, and so also for the revision.

64. Under this provision, when a person has undergone detention for a period extending to one-half of the maximum period of imprisonment specifiedfor that offence, he shall be released by the court on his personal bond with or without sureties. The word “shall” clearly denotes the mandatory compliance of this provision. We do feel that there is not even a need for a bail application in a case of this nature particularly when the reasons for delay are not attributable against the accused. We are also conscious of the fact that while taking a decision the Public Prosecutor is to be heard, and the court, if it is of the view that there is a need for continued detention longer than one-half of the said period, has to do so. However, such an exercise of power is expected to be undertaken sparingly being an exception to the general rule. Once again, we have to reiterate that “bail is the rule and jail is an exception” coupled with the principle governing the presumption of innocence. We have no doubt in our mind that this provision is a substantive one, facilitating liberty, being the core intendment of Article 21. The only caveat as furnished under the Explanation being the delay in the proceeding caused on account of the accused to be excluded….”¹⁰

b. In Vijay Madanlal Chaudhary¹¹, the Supreme Court held that the benefit of Section 436A of the CrPC extends to cases under the PMLA. However, it does not confer an absolute right to bail, and the Court can deny such benefit, particularly where the delay in trial is attributable to the accused. The decision has been followed in Ajay Ajit Peter Kelkar v. Directorate of Enforcement & Ors.¹².

c. In Senthil Balaji v. Directorate of Enforcement¹³, although the Supreme Court was not dealing with a plea under Section 436A of the CrPC, it held that where the trial of the scheduled offence and the PMLA complaint is unlikely to conclude within a reasonable time, Constitutional Courts must exercise their extraordinary jurisdiction to grant bail. The Court observed that Section 45 of the PMLA cannot be used as a tool for prolonged incarceration, as continued detention without the likelihood of an early trial would violate the accused’s fundamental right to speedy trial under Article 21. It was further clarified that, only where delay is attributable to the accused or where the accused poses a real threat to society, may such relief be declined.

13. Section 479 of the BNSS [corresponding to Section 436A of the CrPC], in view of the above decisions, would ordinarily entitle an accused to bail after completion of custody for one-half of the maximum period of sentence. In the case of a “first time offender”, this threshold is reduced to one-third, by application of the proviso. However, an exception may be made in terms of the second proviso. The computation of the period of detention is to be made after deduction of any period for which the delay was found to be due to the accused, by application of the Explanation. Further, Section 479(2) creates an exception in the case of an accused facing inquiry, investigation or trial in many offences or multiple cases.

14. In the context of the present case, the applicability of Section 479 is thus dependent upon the following questions:

A. Has the petitioner crossed the threshold period of custody under Section 479(1) and/or the first proviso thereto?

B. Is the period required to be adjusted under the explanation to Section 479(1) on account of any delay attributable to the accused?

C. In the petitioner’s case, does Section 479(2) require bail to be refused, in view of multiple offences/cases pending against her, despite crossing the threshold period of custody?

D. Do the facts of the case require an exception to be made under the second proviso to Section 479(1), even if the petitioner has crossed the threshold period of custody?

15. As far as the period of custody is concerned, the Nominal Roll in the present case shows that as of 13.01.2025, the petitioner had undergone custody for a period of 3 years, 3 months, and 24 days. As of today, therefore, she has undergone custody for a period of 4 years, 7 months, and 14 days. The maximum period of sentence for the offence under Section 3 of the PMLA is seven years. The petitioner has thus prima facie crossed the threshold of one-half the period of custody¹⁴.

16. In the present case, however, Mr. Gurnani relied upon the Explanation to Section 479(1), submitting that, even after filing of the last prosecution complaint on 22.12.2024, several adjournments have been taken by the petitioner and the other accused for arguments on charge¹⁵. He, therefore, submitted that the computation of the period of custody, ought to be adjusted for such delay.

17. The position that arguments on charge are yet to be advanced by the accused, despite several dates of hearing, is undisputed. The argument of Mr. Malik, however, is that the Court’s approach should be holistic, and take account of the delays caused by the prosecution as well as those caused by the accused. He submitted, on the facts of the present case, that filing of prosecution complaints took over three years, between filing of the first prosecution complaint on 04.12.2021, and the fifth supplementary complaint on 20.12.2024. Even when the last supplementary complaint was filed, the petitioner had already been in custody for more than three years and two months, which is almost half of the maximum sentence under Section 4 of the PMLA.

18. On consideration of the entire chronology of events, I am inclined to agree with Mr. Malik. The first prosecution complaint was filed on 04.12.2021, and five complaints have been filed subsequently over three and a half years. It is not the case that the petitioner never completed her arguments on the point of charge¹⁶. However, charges were not framed, due to the filing of successive prosecution complaints, lastly on 20.12.2024. The ED then advanced its arguments on charge, in respect of each of the accused, until 23.04.2025. By this time, the petitioner had been in custody for 3 years, 7 months, and 4 days. Thus, even assuming that the period after 24.04.2025 constitutes delay attributable to the accused, it is only such period that would be excluded from the computation of the period of custody, under the Explanation to Section 479 of the BNSS. In the present case, however, the petitioner had already completed more than half the maximum period of sentence by 23.04.2025, as she was arrested in connection with the subject case on 09.10.2021. It would thus be inappropriate to deny her the benefit of the provision on this ground.

19. The next aspect to be considered is whether the petitioner is to be deprived of the benefit of the statute by reason of Section 479(2) of the BNSS.

20. Gurnani submitted that the said provision, which was not part of Section 436A of the CrPC, but has been introduced in BNSS, makes an express exception in the case of individuals, who are subjected to investigation, inquiry or trial, in more than one offence or in multiple pending cases. It is submitted that in the petitioner’s case, in addition to the present complaint proceedings instituted by ED, she is accused in three cases, enumerated in paragraph 3(I), as also in the predicate offence, i.e. FIR No. 208/2021 at PS Special Cell. It was, however, accepted that, other than FIR No. 208/2021, the petitioner is on bail in the other three cases¹⁷.

21. Malik, on the other hand, submitted that Section 479(2) of the BNSS does not create an absolute bar to grant of bail, even in cases where more than one offence or multiple cases are pending against the accused. He argued that a strict or literal interpretation of the section would deprive an undertrial from the concession of bail, even if he/she has undergone more than half the maximum period of sentence. According to Mr. Malik, the section ought to be read as a whole, and construed in a manner consistent with the constitutional right to life and liberty, particularly at a pre-conviction stage. Mr. Malik submitted that such an approach would also be consistent with the judgment of the Supreme Court in Badshah Majid Malik v. Directorate of Enforcement & Ors.¹⁸, which was also rendered under Section 479 of the BNSS, in a case involving an offence under PMLA. The Supreme Court noted that the accused had not been convicted in any offence in the past. Although the observations of the Court make it clear that the accused was also an accused in the predicate offence, i.e. there was more than one FIR pending against him, he was released on bail under Section 479(1) of the BNSS.

22. Gurnani, however, submitted that Badshah Majid Malik does not consider the provision of Section 479(2) of the BNSS at all. Further, he drew my attention to three judgments of other High Courts, in which Section 479(2) of the BNSS has been interpreted, in two of which Badshah Majid Malik was also cited.

23. The Karnataka High Court in K Ramakrishna v. Directorate of Enforcement¹⁹ [also a PMLA case] favoured a conjoint reading, and held that Section 479(2) of the BNSS would also apply to the case of a “first time offender”²⁰. The High Court of Jammu and Kashmir & Ladakh in Muninder Singh @ Sonu v. UT of J&K & Ors.²¹ came to a similar conclusion with regard to a “first time offender”, if the charge was under more than one offence. In Panna Lal Mahto @ Ganjhu v. Union of India²² [also a PMLA Case], the Jharkhand High Court distinguished Badshah Majid Malik, on the ground that the accused therein was facing prosecution in several predicate and scheduled offence cases.

24. Relying upon these judgments, Mr. Gurnani submitted that, in cases to which Section 479(2) of the BNSS applies, the Court must consider the question of the petitioner’s entitlement to bail in its discretion, without strict applicability of Section 479(1) of the BNSS.

25. As far as the interpretation of the section is concerned, I am of the view that a holistic interpretation, informed both by the statutory objective and constitutional context, must be favoured. As noted by the Supreme Court, in Satinder Kumar Antil and Senthil Balaji [in the context of Section 436A of the CrPC], the statute provides a safeguard against prolonged incarceration pending trial. While an exception can be made under the first proviso to Section 436A CrPC [now the second proviso to Section 479(1) of the BNSS], that exception must be sparingly invoked to further the constitutional guarantee of liberty. In BNSS, a further provision was made, which entitles a first-time offender to the benefit of Section 479(1), upon completion of a lesser proportion of the maximum sentence [1/3^rd]. It would, in my view, be inconsistent in this approach to hold that Section 479(2) entirely eclipses Section 479(1), even if the accused is facing trial in more than one offence in the same FIR, or more than one criminal case. Instead, a harmonious reading of the various provisions contained in Section 479 of the BNSS requires the Court to take into account multiplicity of offences or pending proceedings as a significant factor, but does not altogether deprive the Court of its discretion to grant bail once the accused has crossed the custody threshold of Section 479(1) of the BNSS.

26. Adopting this approach, in the present case, the petitioner has already undergone custody for more than four years and six months against a maximum prescribed sentence of seven years, i.e., approximately two-thirds of the maximum sentence. This period of incarceration is significantly beyond the threshold contemplated under Section 479 of the BNSS. The case is still at the stage of framing of charges, and given the number of witnesses [311] and the volume of documents, it is unlikely that the trial will conclude in the near future. In fact, it is not implausible that the petitioner will even serve the maximum period of imprisonment, before the trial is concluded. Further, although the petitioner is involved in three other cases, except the predicate offence, she is on bail in all of them. In view of these factors, and upon a holistic consideration of Section 479 of the BNSS, the petitioner, in my view, is entitled to the benefit of the said provision.

27. Once it is held that the petitioner is entitled to the benefit of the statute, an exception can be made under the second proviso, but that power is to be exercised sparingly, as held by the Supreme Court in Satinder Kumar Antil. I have not been shown any compelling reason to apply that exception in the present case.

III. PARITY

29. Out of the 18 accused persons arrayed in the present ECIR, 12 have already been enlarged on bail, three by this Court and nine by the Special Court.

30. In particular, reliance has been placed on the order granting bail to co-accused Arun Muthoo by this Court²³, who was allegedly involved in assisting Sukesh in laundering and layering the proceeds of crime. While granting bail, this Court had also extended to him the benefit of Section 436A of the CrPC. Bail was also granted by this Court to co-accused Avtar Singh Kochar²⁴, who was alleged to be the principal hawala operator facilitating the movement of the proceeds of crime, though his age and medical ailments were also relevant considerations. Both Arun Muthoo and Avtar Singh Kochar were thus granted bail, despite the rigours of Section 45 of the PMLA being applicable to them.

31. Co-accused Pooja Singh has also been granted bail by this Court²⁵. She was alleged to be a salaried employee whose role was confined to handling of the alleged extorted amount.

32. Further, co-accused Jacqueline Fernandez, whose role was allegedly similar to that of the petitioner, being a beneficiary of the proceeds of crime, was granted bail by the Special Court vide order dated 15.11.2022.

33. Certain other co-accused have also been enlarged on bail by the Special Court, including Pradeep Ramdani, who was allegedly caught red-handed with proceeds of crime and was granted bail vide order dated 02.08.2022, and Pinky Irani, who was alleged to have facilitated interactions with celebrities and arranged expensive gifts for commission, was granted bail vide order dated 15.02.2022.

34. The role attributed to the petitioner in the present case under PMLA, is primarily that of handling, utilisation, and enjoyment of the proceeds of crime. She is alleged to have operated five proprietorship concerns, including M/s Nail Artistry and M/s Super Car Artistry,

through which substantial funds were routed from unrelated firms and individuals during the period from June 2020 to August 2021. These entities were allegedly used for facilitating cash transactions and acquiring high-end assets. The petitioner is further alleged to be the beneficial owner of a residential property in Chennai acquired through a benami transaction. Out of 26 luxury cars allegedly purchased from the proceeds of crime, 16 were recovered from premises linked to her, the cars having been purchased in the names of her firms. Statements of witnesses also indicate that approximately Rs. 20 lakhs was transferred into her company accounts through debit and credit card swipes against cash transactions on commission. She is also alleged to have booked multiple chartered flights worth approximately Rs. 7.29 crores and to have opened a Demat account for trading in shares at the behest of Sukesh, thereby assisting in the enjoyment and utilisation of the proceeds of crime.

36. While utilisation of the proceeds of crime is a matter to be considered at trial, Avtar Singh Kochchar, who was alleged to be the principal hawala operator, Arun Muthoo, who allegedly handled and layered the proceeds of crime, and Jacqueline Fernandez, who was alleged to be a beneficiary enjoying the proceeds of crime, have already been granted bail. I am of the view that the petitioner’s case cannot be said to stand on a graver footing than theirs. Particularly in the context of PMLA proceedings, the roles attributed to hawala operators and those directly involved in layering and movement of the proceeds of crime are also of utmost significance. Further, Jacqueline Fernandez is also, like the petitioner, accused as a beneficiary or user of proceeds of crime. The petitioner is, therefore, entitled to the benefit of parity with the co-accused.

IV. RESULT OF THE ABOVE DISCUSSION

35. Having regard to the period of custody undergone, viewed in the light of Section 479 of the BNSS, the fact that the petitioner had joined the investigation prior to her arrest, the non-applicability of the stringent conditions under Section 45 of the PMLA, and the benefit of parity with similarly placed co-accused who have already been granted bail, I am of the considered view that the petitioner is entitled to be released on bail in the present case.

36. It may be noted that by a separate judgment delivered today, I have declined bail to the petitioner in the predicate offence [FIR No. 208/2021, dated 07.08.2021, lodged at Special Cell, Delhi]. In my view, the present case, however, stands on a different footing, for the following principal reasons:

A. First, the twin restrictions on grant of bail under Section 21(4) of MCOCA are applicable to the petitioner, whereas Section 45 of the PMLA is not.

B. Second, the maximum period of sentence under Section 3 of MCOCA is life imprisonment, whereas in the present case, it is imprisonment for a period of seven years, which leads to an entirely different consideration of the period of custody already undergone.

C. Third, considerations of parity also enure to the petitioner’s benefit in the present case, where the allegations against her are confined to benefiting from the proceeds of crime. In contrast, the predicate dffence concerns her involvement as a member and second-in-command of the organised crime syndicate.

D. CONCLUSION

37. In view of the above discussion, the application is allowed, and it is directed that the petitioner be released on bail in connection with ECIR/54/DLZO-II/2021, dated 08.08.2021, under Sections 3 and 4 of PMLA, subject to furnishing a personal bond of Rs. 10,00,000/-, alongwith two sureties in the like amount, to the satisfaction of the concerned Special Court, and subject to the further following conditions:

a. The petitioner shall appear before the Special Court on each and every date of hearing;

b. The petitioner shall surrender her passport before the Special Court, and shall not leave the country without prior permission of the Special Court;

c. . The petitioner shall provide her permanent address to the Special Court, as also the address where she is residing during the pendency of the case. The petitioner shall intimate the Investigating Officer [“IO”], and file an affidavit before the Special Court, regarding any change in residential address;

d. The petitioner shall provide her mobile number to the concerned IO/Station House Officer, which shall be kept in working condition at all times. The mobile number shall not be switched off or changed without prior intimation to th12 IO during the pendency of the trial;

e. The petitioner shall not directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case or tamper with the evidence of the case, in any manner whatsoever;

f. The petitioner shall not commit any offence during the period of her release.

38 The bail application is disposed of in terms of the above.

39. It is clarified that any observations made in the present judgment are solely for the purpose of deciding the present bail application, and shall neither influence the trial proceedings, nor be construed as an expression of opinion on the merits of the case.

40. Copy of the judgment be communicated to the concerned Jail Superintendent electronically for information and necessary compliance.

Notes:

¹ The petitioner was not chargesheeted in Crime No. 33/2015, registered at Economic Offences Wing, Mumbai.

² Criminal Appeal No. 212/2025 decided on 15.01.2025 [hereinafter, “Shashi Bala”].

³ 2024 SCC OnLine SC 2269 [hereinafter, “K. Kavitha”].

⁴ (2024) 6 SCC 401 [hereinafter, “Saumya Chaurasia”].

⁵ (2023) 12 SCC 1 [hereinafter, “Vijay Madanlal Chaudhary”].

⁶ (2022) 10 SCC 451 [hereinafter, “Satender Kumar Antil”].

⁷ Emphasis supplied.

⁸ Emphasis supplied.

⁹ Emphasis supplied.

¹⁰ Emphasis supplied.

¹¹ Paragraph 321.

¹² 2024 SCC OnLine SC 4055, paragraph 3.

¹³ 2024 SCC OnLine SC 2626, paragraphs 27-29 [“V. Senthil Balaji”].

¹⁴ As the petitioner has crossed one-half the maximum period of sentence in the present case, it is not necessary to examine whether she is entitled to the benefit of the first proviso to Section 479(1), which reduces the required period to one-third the maximum sentence in case of “a first time offender (who has never been convicted of any offence in the past)”. Suffice it to note that no previous conviction of the petitioner for any offence appears from 1the record.

¹⁵ Reference may be made to the orders of the Special Court dated 24.04.2025, 25.04.2025, 29.04.2025, 02.05.2025, 19.05.2025, 21.05.2025, 01.08.2025, 02.08.202505.08.2025, 06.08.2025, 07.08.2025, 08.08.2025, 11.08.2025, 12.08.2025, 13.08.2025, 02.09.2025, 09.09.2025, 10.09.2025, 11.09.2025, 12.09.2025, 15.09.2025, 17.09.2025, 18.09.2025, 20.09.2025, 23.09.2025, 24.09.2025, 25.09.2025, 27.10.2025, 07.11.2025, 10.11.2025, 11.11.2025, 28.11.2025, 17.01.2026, 27.01.2026, 28.01.2026, 29.01.2026, and 24.03.2026.

¹⁶ Reference may be made to the order of the Special Court dated 05.07.2023, wherein counsel for the petitioner had argued on charge.19

¹⁷ Although four cases are enumerated in paragraph 3(I) hereinabove, the petitioner was not chargesheeted in Crime No. 33/2015 registered at PS EOW.

¹⁸ SLP (Crl.) No. 10846/2024, decided on 18.10.2024 [hereinafter, “Badshah Majid Malik”].

¹⁹ Criminal Petition No. 9930/2024, decided on 23.11.2024.

²⁰ A special leave petition against the said judgment was dismissed as withdrawn, with liberty to the accused to approach the Trial Court [SLP Crl No. 6/2025, dated 24.02.2026].

²¹ BAIL APP No. 136/2025, decided on 28.11.2025.

²² BAIl APP No. 9384/2022, decided on 06.12.2024.

²³ BAIL APPLN 1821/2024, decided on 20.02.2025.

²⁴ BAIL APPLN 1814/2022, decided on 29.11.2023.

²⁵ BAIL APPLN 79/2023, decided on 29.08.2023.