Facts
The Petitioner, Managing Director of M/s Best Foods Ltd., was accused of orchestrating a bank fraud involving a consortium led by State Bank of India, resulting in an outstanding liability of ₹1,740.30 crore.
Source reference: p.2-3The CBI registered a predicate FIR in 2020 alleging siphoning of funds through shell entities and forged documents.
Source reference: p.2The Directorate of Enforcement (DoE) recorded an initial ECIR in 2022, but a second ECIR was recorded on 07.07.2025, leading to the Petitioner’s arrest on 08.08.2025.
Source reference: p.3-6The DoE alleged that loan funds were laundered into real estate and used to reacquire company assets during liquidation.
Source reference: p.17The Petitioner sought regular bail on grounds of prolonged incarceration (10 months), the documentary nature of evidence, and the fact that no chargesheet had been filed in the predicate offence after six years of investigation.
Source reference: p.22Issues
1. Whether the Petitioner is entitled to regular bail under Section 45 of the PMLA despite the "twin conditions," given the prolonged pretrial detention and slow progress of trial.
Source reference: p.20 / para. 312. Whether the rigours of Section 45 PMLA must yield to the fundamental right of personal liberty under Article 21 of the Constitution when a trial is unlikely to conclude in a reasonable time.
Source reference: p.26 / para. 39Law Applied
Section 45 of the Prevention of Money Laundering Act (PMLA), 2002, which mandates "twin conditions"—reasonable grounds to believe the accused is not guilty and unlikely to commit further offences—for the grant of bail.
Source reference: p.19Article 21 of the Constitution of India regarding the right to a speedy trial.
Source reference: p.21The precedent of V. Senthil Balaji v. Enforcement Directorate establishing that statutory rigours for bail cannot result in indefinite pretrial detention.
Source reference: p.23The doctrine from Arvind Dham v. Enforcement Directorate that the "melt down" of Section 45 occurs if the trial is unlikely to conclude within a reasonable duration relative to the maximum sentence.
Source reference: p.24-25Reasoning
The court observed that the investigation against the Petitioner is complete and a prosecution complaint has been filed, yet the matter remains at the stage of scrutiny of documents for over five months.
Source reference: p.21-22Highlighting that the DoE cited 54 witnesses and 20,000 pages of documents, the court determined there is no likelihood of the trial commencing or concluding soon.
Source reference: p.26The court noted that the predicate FIR was registered in 2020, yet the CBI has not filed a chargesheet in six years, and the DoE took no coercive action for three years after its first ECIR.
Source reference: p.22The court reasoned that since the evidence is primarily documentary and already in the custody of the authorities, the risk of tampering is minimal.
Source reference: p.26The court balanced the "twin conditions" of PMLA against the Petitioner’s right to personal liberty, finding that continued incarceration would metamorphose pretrial detention into punishment.
Source reference: p.20, 26Holding
The Court allowed the bail application, answering that prolonged incarceration and the unlikely conclusion of trial warrant relief notwithstanding Section 45 rigours.
The Petitioner was ordered to be released on a personal bond of ₹2,00,000 with two sureties, subject to conditions including the surrender of his passport, non-contact with witnesses, and appearing for further investigation as required.
Source reference: p.27-28The court clarified that these observations are limited to the bail stage and do not reflect on the merits of the case.
Source reference: p.28Original Court PDF
Dinesh GuptavsDirectorate Of Enforcement
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