Prolonged Detention Without Trial Violates Article 21 In PMLA Cases: Calcutta HC

Prioritizing the sacrosanct right to personal liberty over stringent statutory restrictions, the Calcutta High Court ruled that prolonged incarceration without the commencement of trial cannot morph into punitive detention, even in serious economic offences. The Court emphasized that constitutional safeguards under Constitution of India, 1950 must prevail when the prospect of a speedy trial is bleak and the investigation is already complete.

A Single Judge Bench of Justice Suvra Ghosh delivered the judgment while hearing a bail application in a money laundering case involving allegations of siphoning loan funds. The Court scrutinized whether the mandatory safeguards of Section 19 of the Prevention of Money Laundering Act, 2002 were complied with and evaluated the necessity of continued detention when the trial for both the predicate offence and the money laundering complaint remained stalled.

Court Observations on Section 19 Compliance

The Court analyzed the power of arrest granted to the Enforcement Directorate (ED), noting that it is not for the purpose of investigation but requires a recorded opinion of guilt based on material in possession. Referring to Radhika Agarwal v/s. Union of India & Others ( "(2025) 6 Supreme Court Cases 545": 2025 CaseBase(SC) 262), the Court noted that safeguards in the Prevention of Money Laundering Act, 2002 are of a higher standard to prevent arbitrary executive action.

The Court, in its reasoning, observed: "The very use of the phrase “reasons to believe” implies that the officer should have formed a prima facie opinion or belief on the basis of the material in his possession that the person is guilty or has committed the offence under the relevant Special Act. Sufficiency or adequacy of the material on the basis of which such belief is formed by the authorized officer, would not be a matter of scrutiny by the courts at such a nascent stage of inquiry or investigation."

Regarding the provision of grounds of arrest, the Court looked at the principles in Vihaan Kumar v/s. Union of India, concluding that providing the grounds to the petitioner, who could then inform his family, satisfied the mandate of Constitution of India, 1950.

Directions Issued to the Petitioner

The Court granted bail and issued the following directions:

"i. The petitioner shall surrender his passport before the learned trial Court at once, if not already surrendered in connection with any other case.

ii. He shall not leave the territorial jurisdiction of the learned trial Court without leave of the trial Court.

iii. He shall furnish the address where he shall presently reside before the learned trial Court, the E.D. and the Inspector-in-charge/Officer-in-charge of the police station under whose jurisdiction he shall presently reside.

iv. He shall appear before the learned trial Court on every date of hearing fixed before the learned Court.

v. He shall not tamper with evidence or intimidate witnesses in any manner whatsoever.

vi. He shall not indulge in any criminal activity and shall not communicate with or come in contact with the witnesses.

vii. He shall provide his mobile phone number before the learned trial Court and shall not change the same without prior intimation to the Court."

Background

The case originated from a Serious Fraud Investigation Office (SFIO) complaint under the Companies Act, 2013 and Companies Act, 1956, alleging financial irregularities by the petitioner's company. The ED subsequently registered an ECIR treating Section 447 of the Companies Act, 2013 as the predicate offence. The petitioner was arrested in August 2025 following search and seizure operations.

The petitioner argued that the ED lacked "material in possession" prior to the arrest and that the arrest was procedurally flawed under Section 19. They further contended that the investigation was complete, and since the trial proceedings had been stayed by the High Court in a separate revisional application, continued detention was unjustified. The ED opposed bail, citing the gravity of economic offences and the petitioner's role as the 'main conspirator' in siphoning loan funds.

The Court noted that the predicate offence was still at the stage of Section 207 of the Code of Criminal Procedure and the PMLA trial was unlikely to begin soon. Relying on Prabir Purkayastha v/s. State (NCT of Delhi) ( "(2024) 8 Supreme Court Cases 254": 2024 CaseBase(SC) 73), Arvind Kejriwal v/s. Directorate of Enforcement ( "(2025) 2 Supreme Court Cases 248": 2024 CaseBase(SC) 105), Pankaj Bansal v/s. Union of India & Ors. ( "(2024) 7 Supreme Court Cases 576": 2023 CaseBase(SC) 603), Vijay Madanlal Choudhary v/s. Union of India ( "2022 Supreme Court Cases OnLine SC 929": 2022 CaseBase(SC) 310), Y.S. Jagan Mohan Reddy v/s. CBI, Tarun Kumar v/s. Enforcement Directorate, and Rohit Tandon v/s. Directorate of Enforcement, the Court held that despite the seriousness of economic crimes, a blanket denial of bail is not warranted when personal liberty is at stake due to judicial delay.

Case Details:
Case No.: CRM (R) 44 of 2026
Case Title: Harish Bagla v/s Enforcement Directorate
Appearances:
For the Petitioner(s): Mr. Jatin Sehgal, Mr. Raymon Singh, Ms. Devya Soni, Mr. Viren Bansal, Mr. Ayan Poddar, Mr. Soumen Mohanty, Mr. P. Mitra
For the Respondent(s): Mr. Adil Rashid

Source: 2026 CaseBase(CAL) 2904