Padam Chand Jain Vs Enforcement Directorate (Supreme Court of India)
Summary: The Supreme Court of India granted bail to Padam Chand Jain in a money laundering case involving alleged defalcation of Rs.136.41 crore in connection with the management of tenders awarded to PHED. The Enforcement Directorate opposed bail, contending that the petitioner’s role was more serious than those attributed to co-accused Peeyush Jain, his son, and Sanjay Badaya, both of whom had already been granted bail by the Supreme Court. The agency also relied on the twin conditions prescribed under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA), arguing that bail could not be granted without satisfying those requirements. The petitioner sought parity with the co-accused and relied on the constitutional principles governing prolonged pre-trial detention.
The Supreme Court referred to Manish Sisodia v. Directorate of Enforcement, 2024 SCC OnLine 1920, and expressly corrected the High Court’s understanding that bail in that decision had been granted through the exercise of extraordinary powers under Article 142 of the Constitution. The Court clarified that the Manish Sisodia decision did not invoke Article 142; rather, it held that the twin conditions under Section 45 of the PMLA could not override the constitutional safeguards under Article 21. The Court reiterated that prolonged incarceration could not be allowed to convert pre-trial detention into punishment without trial. In the present case, thousands of documents were required to be examined and approximately 50 witnesses were to be heard. The principal evidence was documentary and had already been seized by the prosecution, reducing the possibility of tampering.
The Supreme Court also noted that the Minister for whose benefit the alleged transactions had reportedly occurred had not been made an accused and that the petitioner had already obtained bail in the predicate offences. Considering these circumstances, the earlier bail orders concerning co-accused and the constitutional protection against prolonged pre-trial detention, the Court directed the petitioner’s release on bail in connection with the complaint case dated 8 August 2024 arising from ECIR/JPZO/29/2023, subject to the satisfaction of the trial court. The special leave petition and pending applications were disposed of. The order does not decide the petitioner’s guilt or the merits of the money laundering allegations.
Cases Discussed
- Manish Sisodia v. Directorate of Enforcement (Supreme Court)— 2024 SCC OnLine SC 1920. The Court clarified that bail in this decision was not granted by invoking Article 142 of the Constitution. Instead, the decision recognised that the twin bail conditions under Section 45 of the PMLA cannot override Article 21 safeguards and that prolonged pre-trial detention cannot become punishment without trial.
- Peeyush Jain (Supreme Court), Criminal Appeal No.3754 of 2024. The petitioner’s son, described as a co-accused, had been granted bail by a coordinate Bench. The supplied order does not provide the full case title or the date of that bail order.
- Sanjay Badaya (Supreme Court)— SLP(Crl) No.15953 of 2024, bail order dated 17.12.2024. The Court noted that another co-accused had already been granted bail.
FULL TEXT OF THE SUPREME COURT JUDGMENT/ORDER
1.This is a petition seeking bail.
2.We have heard Shri Sidharth Luthra and Shri Siddharth Agrawal, learned senior counsel appearing on behalf of the petitioner and Shri Suryaprakash V. Raju, learned Additional Solicitor General appearing for the respondent.
3.Shri Luthra and Shri Agrawal, learned senior counsel, submits that the other co-accused, who are assigned the similar role, have already been granted bail either by this Bench or by another Bench of this Court.
4.Shri Raju, on the contrary submits that the petitioner is involved in a crime of defalcation of huge sum of Rs.136.41 Crores in the matter of managing the award of tenders to PHED. He submits that the role attributed to the petitioner herein is of much serious nature as compared to the role attributed to Shri Peeyush Jain, who is the son of the present petitioner and Shri Sanjay Badaya. He further submits that unless the twin conditions contained in Section 45 of the Prevention of Money Laundering Act, 2002 (for short, ‘PMLA’) are complied with bail in the matters concerning PMLA cannot be granted.
5.We have perused the material on record in the present case. The son of the petitioner herein, namely, Shri Peeyush Jain has been granted bail by a coordinate Bench of this Court in Criminal Appeal No.3754 of 2024 so also another accused, namely, Sanjay Badaya has been granted bail by this Court on 17.12.2024 in SLP(Crl) No.15953 of 2024.
6.Learned Single Judge of the High Court, while considering the law laid down by this Court in Manish Sisodia v. Directorate of Enforcement, 2024 SCC OnLine 1920, has observed that this Court has granted bail in the said matter in exercise of powers under Article 142 of the Constitution of India.
7.We may clarify that in the case of Manish Sisodia (supra) the 2
Court has not exercised the powers under Article 142 of the Constitution of India. The Court has held that the twin conditions under Section 45 of the PMLA cannot override the constitutional safeguards, as provided under Article 21 of the Constitution of India. This Court has held that a prolonged incarceration cannot be permitted to be converted pre-trial detention into a sentence without trial. Like in the case of Manish Sisodia (supra) in the present case also thousands of documents are required to be considered at the stage of trial, so also around 50 witnesses are required to be examined. The main evidence in the present case is documentary in nature, which is already seized by the prosecution agency. As such, there is no possibility of the same being tampered with.
8.It is further to be noted that the Minister, for whose benefit the alleged transactions have taken place, has also not been implecated as an accused in the present case. The petitioner has already been released on bail in the predicate offences.
9.In that view of the matter, we are inclined to grant bail to the petitioner herein.
10.The petitioner is directed to be released on bail in connection with Complaint Case dated 08.08.2024 in ECIR/JPZO/29/2023, to the satisfaction of the Trial Court.
11.The special leave petition is, accordingly, disposed of.
12.Pending application(s), if any, shall stand disposed of.
