Nishad Ahammed Kannur vs The State Rep. by
- Court
- Madras High Court
2026:MHC:3035
Crl.O.P.No.15913 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 22.07.2026
CORAM
THE HONOURABLE Mr. JUSTICE C.KUMARAPPAN
Crl.O.P.No.15913 of 2026
Nishad Ahammed Kannu ... Petitioner
Vs.
1. The State rep. By
Station House Officer,
Directorate of Enforcement Police Station,
Puducherry.
(Crime No.ECIR/CEZO-II/15/2025)
2. The CBCID,
Crime Branch,
Crime Investigation Department,
Puducherry. … Respondent
PRAYER : Criminal Original Petition filed under Section 483 of Bharatiya
Nagarik Suraksha Sanhita, 2023, to enlarge the petitioner on bail pending trial in
connection with Spl.C.C.No.1 of 2026 on the file of the learned Principal
Sessions Judge and Special Court for PMLA Cases, Puducherry.
For Petitioner : Mr.M.Sathya Kumar
For Respondent : Mr.A.Kumaraguru,
Special Public Prosecutor (Puducherry)
ORDER
The petitioner, who was arrested and remanded to judicial custody on
18.09.2025 for the alleged offence under Sections 3(1) & 4 of Prevention of
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Money Laundering Act, 2002 in Crime No.ECIR/CEZO-II/15/2025 on the file
of the respondent police, seeks bail.
2.The case of the prosecution is that the petitioner induced 825 victims to
deposit a sum of Rs.4,50,000/- each with the promise of paying Rs.9,00,000/- in
return, and subsequently cheated them. Based on the complaint lodged by the
investors, a separate case (predicate offence) was registered by the CBCID
Puducherry. Following the registration of this case, the respondent conducted an
enquiry and registered an ECIR on 08.09.2025. After completing the mandatory
proceedings, the petitioner was arrested on 18.09.2025 and now seeks bail.
3.The learned counsel for the petitioner would contend that the
prosecution has failed to identify any proceeds of crime as defined under
Section 2(1)(u) of the Prevention of Money Laundering Act, 2002 (hereinafter
referred to as “the PMLA” ). It is his further contention that the respondents
have neither identified any shell entities nor established any benami
arrangements or layering of funds. According to the learned counsel, the mere
rotation of funds cannot, by itself, constitute the offence of money laundering
under the provisions of the PMLA. He would further submit that the dispute is,
at best, a simple investment dispute and that, even in the predicate offence, the
petitioner was never arrested. However, under a misconception of law, the
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respondents arrested the petitioner on 18.09.2025 and, since then, he has been
under incarceration.
3.1. It is also the contention of the learned counsel for the petitioner that
the grounds of arrest were not furnished to him. He would further submit that a
mere e-mail complaint was converted into an ECIR, culminating in the arrest of
the petitioner, despite the fact that he had cooperated with the investigation by
appearing before the respondent on four occasions. The learned counsel for the
petitioner also placed reliance upon the judgment of the Hon'ble Supreme Court
in V. Senthil Balaji Vs. The Deputy Director, reported in 2024 INSC 739, and
would contend that the rigour under Section 45 of the PMLA cannot be invoked
to deny bail, as the right to personal liberty is sacrosanct and bail is the rule and
jail is an exception. Hence, he prayed to enlarge the petitioner on bail.
4. Per contra, the said contention was stoutly opposed by the learned
Special Public Prosecutor and would contend that the petitioner, under the false
promise of paying a monthly return of Rs.55,000/- for eleven months, collected
a sum of Rs.4,50,000/- each from nearly 800 persons, thereby cheating them to
the tune of about Rs.43 Crores. It is his further contention that, when the
respondents commenced the investigation, the petitioner withdrew substantial
amounts from various bank accounts. The learned Special Public Prosecutor
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would further submit that, at this stage, it is premature to go into the merits of
the defence and that the Court is only required to ascertain whether there exists
a prima facie case. It is also his contention that the petitioner did not cooperate
with the investigation, failed to appear before the investigating agency on
several occasions, and is a flight risk. Hence, he prayed for dismissal of the
present bail petition.
5. I have given my anxious consideration to the submissions made on
either side.
6. The main contention putfoth by the learned counsel for the petitioner is
that based upon the judgment of the Hon'ble Supreme Court in V. Senthil
Balaji's case (cited supra). No doubt, in the said judgment, the Hon'ble Supreme
Court held that bail is the rule and jail is an exception and ultimately granted
bail to the accused therein, observing that Section 45(1)(ii) of the PMLA does
not confer an unfettered power upon the State to detain an accused for an
unreasonably long period, particularly when there is no possibility of the trial
being concluded within a reasonable time. Therefore, the crucial consideration
in the said judgment was the impossibility of concluding the trial within a
reasonable time.
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7. At this juncture, the learned Special Public Prosecutor would invite the
attention of this Court to the factual matrix of V. Senthil Balaji's case (cited
supra) and submit that the said case initially involved only one accused, namely,
Senthil Balaji, who was alleged to have received illegal gratification from nearly
2,000 persons by promising them employment. Subsequently, all those 2,000
persons who allegedly paid the bribe were also arrayed as accused, resulting in
more than 2,000 accused and nearly 600 witnesses. It was in such extraordinary
factual circumstances that the Hon'ble Supreme Court, having found that the
trial could not be concluded within a reasonable time, enlarged the accused on
bail. As rightly contended by the learned Special Public Prosecutor, the present
case stands on an entirely different footing, inasmuch as there are only three
accused. Therefore, the facts of the present case are clearly distinguishable from
those in V. Senthil Balaji's case (cited supra), and the said judgment is not
applicable to the facts of the present case.
8. Admittedly, the present case relates to the alleged cheating of about 800
persons to the tune of Rs.43 Crores and, as rightly submitted by the learned
Special Public Prosecutor, the rigour under Section 45 of the PMLA squarely
applies. From the submissions made by the learned counsel for the petitioner,
the principal ground urged to overcome the rigour under Section 45 of the
PMLA is the period of incarceration since 18.09.2025. It is well settled
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principles of law that long incarceration, by itself, is not sufficient to overcome
the rigour under Section 45 of the PMLA.
9. Though the learned counsel for the petitioner sought to raise a defence
regarding the non-furnishing of the grounds of arrest by placing reliance upon
the judgment of the Hon'ble Supreme Court in Pankaj Bansal Vs. Union of
India , reported in (2024) 7 SCC 576 , the present case is governed by the
judgment of the Hon'ble Supreme Court in Mihir Rajesh Shah Vs. State of
Maharashtra, reported in (2026) 1 SCC 500. Admittedly, the petitioner was
arrested on 18.09.2025, whereas the judgment in Mihir Rajesh Shah's case
(cited supra) was delivered on 06.11.2025, wherein the Hon'ble Supreme Court
categorically held that the defence relating to the grounds of arrest cannot be
invoked in cases where the arrest had taken place prior to the said judgment. In
this regard, it is appropriate to extract paragraph 68 of the judgment in Mihir
Rajesh Shah's case (cited supra), which reads as follows:-
“68. We are cognizant that there existed no consistent or binding
requirement mandating written communication of the grounds of
arrest for all the offences. Holding as above, in our view, would
ensure implementation of the constitutional rights provided to an
arrestee as engrafted under Article 22 of the Constitution of
India in an effective manner. Such clarity on obligation would
avoid uncertainty in the administration of criminal justice. The
ends of fairness and legal discipline therefore demand that this
procedure as affirmed above shall govern arrests henceforth.”
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10. Apart from the above, it is pertinent to note that, in the earlier bail
petitions filed by the petitioner, no such defence regarding the grounds of arrest
was raised. It is only in the fourth bail petition that such a plea has been taken.
This conduct also weighs against the petitioner. Therefore, as rightly contended
by the learned Special Public Prosecutor, the petitioner has failed to overcome
the rigour under Section 45 of the PMLA. Hence, this Court does not find any
merit in the present bail petition.
11. Accordingly, this Criminal Original Petition is dismissed.
22.07.2026
kv
Index : Yes
Speaking order
Neutral Citation : Yes
To:
1.The Principal Sessions Judge and Special Court
for PMLA Cases, Puducherry.
2 The Station House Officer,
Directorate of Enforcement Police Station,
Puducherry.
3. The CBCID,
Crime Branch,
Crime Investigation Department,
Puducherry.
4.The Public Prosecutor, High Court of Madras.
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C.KUMARAPPAN , J.
kv
Crl.O.P.No.15913 of 2026
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