Case Note & Summary
The case involved a bail petition filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, by the petitioner, who was accused of offences under Sections 3(1) and 4 of the Prevention of Money Laundering Act, 2002. The prosecution alleged that the petitioner induced 825 victims to deposit Rs. 4,50,000 each with the promise of returning Rs. 9,00,000, thereby cheating them to the tune of approximately Rs. 43 Crores. A predicate offence was registered by the CBCID Puducherry, and subsequently, the Enforcement Directorate registered an ECIR on 08.09.2025. The petitioner was arrested on 18.09.2025 and had been in judicial custody since then. The petitioner sought bail on the grounds that the prosecution failed to identify any proceeds of crime, no shell entities or benami arrangements were established, and the dispute was merely a civil investment matter. He also contended that grounds of arrest were not furnished, that he cooperated with the investigation by appearing four times, and relied on the Supreme Court's decision in V. Senthil Balaji v. Deputy Director (2024 INSC 739) to argue that bail is the rule and that the rigour under Section 45 of the PMLA should not be applied mechanically. The respondent opposed the bail, contending that the petitioner cheated 800 persons of Rs. 43 Crores, withdrew substantial amounts during investigation, failed to cooperate, and posed a flight risk. The Court, after hearing both sides, distinguished the Senthil Balaji case on facts, noting that there the trial involved over 2000 accused and 600 witnesses, making timely conclusion impossible, whereas here there were only three accused. The Court held that long incarceration by itself does not overcome the rigour of Section 45 of the PMLA. Regarding the ground of non-furnishing of arrest grounds, the Court relied on Mihir Rajesh Shah v. State of Maharashtra (2026) 1 SCC 500, which prospectively mandated written communication of grounds of arrest but explicitly stated that the defence could not be invoked for arrests made before the judgment date (06.11.2025). Since the petitioner was arrested on 18.09.2025, the plea was not available. Additionally, the Court noted that the petitioner had raised this plea only in the fourth bail petition, which weighed against him. Consequently, the Court concluded that the petitioner failed to satisfy the conditions under Section 45 of the PMLA and dismissed the bail petition.
Headnote
A) Bail – Prevention of Money Laundering Act, 2002 – Section 45 – Long Incarceration – The Court held that long incarceration by itself is not sufficient to overcome the rigour under Section 45 of the PMLA. Distinguishing V. Senthil Balaji v. Deputy Director (2024 INSC 739), where bail was granted due to impossibility of trial conclusion with over 2000 accused, the present case had only three accused, making the trial completion feasible and thus the rigour applied. (Paras 6-8, 10) B) Criminal Procedure – Arrest and Grounds of Arrest – Article 22 of the Constitution – The Court relied on Mihir Rajesh Shah v. State of Maharashtra (2026) 1 SCC 500, holding that the defence relating to non-furnishing of grounds of arrest cannot be invoked for arrests made prior to the judgment (delivered on 06.11.2025). Since the petitioner was arrested on 18.09.2025, the plea was not available. Additionally, the petitioner raised this plea only in the fourth bail petition, which weighed against him. (Paras 9-10)
Issue of Consideration
Whether the petitioner is entitled to bail under Section 45 of the Prevention of Money Laundering Act, 2002, considering the period of incarceration and the alleged non-furnishing of grounds of arrest.
Final Decision
The Criminal Original Petition was dismissed. The Court held that the petitioner failed to overcome the rigour under Section 45 of the PMLA and the defence of non-furnishing of grounds of arrest was not available for pre-judgment arrests.
Law Points
- Legal points not extracted
- bail under PMLA
- Section 45 rigour
- long incarceration not sufficient
- grounds of arrest defense not available for pre-judgment arrests
- V. Senthil Balaji distinguished
- cooperation not sufficient
