Twin Conditions for Bail under PMLA cannot override Article 21 Rights: Supreme Court

Subordinating statutory bail restrictions to constitutional liberties, the Supreme Court has declared that prolonged incarceration cannot be sanctioned under money laundering law when trials face indefinite delay. The Bench compared the twin conditions for bail under PMLA as against the right to life and personal liberty of the accused.

A bench comprising Justice Aravind Kumar and Justice Vipul M. Pancholi heard the appeal challenging a High Court order that refused regular bail under Section 439 of the Code of Criminal Procedure, 1973 read with Section 45 of the Prevention of Money Laundering Act, 2002.

Interpretation of Section 19(2) and Trial Delay Rationale

Addressing the procedural challenge regarding the five-day delay in forwarding arrest materials to the Adjudicating Authority under Section 19(2) of the Prevention of Money Laundering Act, 2002, the Supreme Court rejected the contention that such delay invalidates the arrest. The Apex Court observed that administrative compilations involving massive voluminous records naturally require reasonable time and do not breach procedural safeguards as long as the transfer is simultaneous and without unnecessary delay.

However, turning to the prolonged incarceration of the accused, the Supreme Court highlighted that the investigation against the appellant was complete, yet the trial faced immense delay due to the involvement of 97 accused persons, 48 witnesses, and thousands of pages of documents. While discussing the twin conditions for bail under PMLA, the Bench observed that "In a bail matter, especially in serious offences, the job of a Court is to balance the rights of the State with those of the Arrestee. In special laws such as PMLA, 2002, the conditions for granting bail are stringent, and the circumstances in which bail can be granted are rare, for the simple reason that economic offences of a large magnitude punch a whole through the financial fabric of the country, causing a top-down ripple effect into the entire eco-system resulting in large consequences for most of the population. That is the justification for making the provisions of PMLA stringent. In the same breath, sight must not be lost of the fact that the institutions have a duty to expeditiously investigate the cases, or else the justification to keep an accused person under custody for an indefinite period of time. Process must not be turned into a punishment unto itself."

Reinforcing that statutory bars must align with personal liberty protections, the Apex Court observed that the principle laid down in Manish Sisodia v. Directorate of Enforcement ( "(2024 SCC OnLine SC 1920)": 2024 CaseBase(SC) 665) applies firmly to money laundering prosecutions.

Background

The case stems from proceedings originally linked to insolvency actions against M/s. Concast Steel and Power Limited. Following proceedings under the IBC, 2016, the CBI registered an FIR under Sections 420, 477A, and 120B of the IPC, 1860 and Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988. Subsequently, the Enforcement Directorate registered an ECIR alleging money laundering involving alleged proceeds of crime to the tune of Rs. 6,210.72 Crores through shell companies.

The appellant was arrested on December 18, 2024, and spent over 20 months in custody. The appellant argued that non-compliance with Section 19(2) of the Prevention of Money Laundering Act, 2002 vitiated the arrest and relied upon rulings including Union of India V. KA Najeeb, Arvind Dham V. Directorate of Enforcement ( "2026 SCC OnLine SC 30": 2026 CaseBase(SC) 56), Basudeb Bagchi & Anr. V. Enforcement Directorate ( "SLP (Crl.) 7613 / 2026": 2026 CaseBase(CAL) 73), Arvind Walia v. Directorate of Enforcement & Anr. ( "SLP (Crl.) 2461 / 2026": 2026 CaseBase(SC) 3844), and Padam Chand Jain V. Enforcement Directorate. The prosecution opposed the plea citing the magnitude of the economic offence.

The Supreme Court allowed the appeal, set aside the order of the High Court of Calcutta in CRM (R) 84 / 2025, and granted regular bail to the appellant subject to specified conditions.

Case Details:
Case No.: Criminal Appeal No(s). 4904 of 2026 (Arising out of SLP (Crl.) No. 10994 of 2026)
Neutral Citation: 2026 INSC 1124
Case Title: Sanjay Sureka @Sanjay Kumar Sureka v. Directorate of Enforcement

Source: 2026 CaseBase(SC) 8263