Prolonged Pre-trial Detention under PMLA Violates Article 21 Where Trial Commencement Is Unlikely and Foundational Facts Are Hazy

In brief

The question

1. Whether a High Court can grant bail after a coordinate bench’s rejection and the Supreme Court’s dismissal of an SLP in limine.

The court held

The Court answered the issues in the affirmative, holding that the "twin conditions" of Section 45 were satisfied as there were reasonable grounds to believe the applicants were not guilty due to the "hazy" nature of the evidence and lack of established "proceeds of crime".

It also directed

The Court granted regular bail to all five applicants (Pravez Khan, Neeraj Chauhan, Rajesh Kumar, Suraj Shat, and Lovee Narula) subject to a personal bond of Rs. 1,00,000/- each, a surety of like amount, and a restriction on leaving the country without permission.

01Facts

The Delhi Police Crime Branch registered an FIR in March 2024 alleging a criminal syndicate manufactured and sold spurious cancer medicines (Opdyta and Keytruda).

pp. 6-7

The Enforcement Directorate (ED) subsequently registered an ECIR under the PMLA.

p. 7

The five applicants were arrested for various roles: supplying empty vials (Pravez Khan), misappropriating vials from hospitals (Neeraj Chauhan), manufacturing spurious drugs (Suraj Shat), and distributing/selling them in the market (Lovee Narula and Rajesh Kumar).

pp. 8-10

Applicants Rajesh Kumar and Lovee Narula were not named in the predicate offence.

p. 28

Previously, a coordinate bench of the High Court and the Supreme Court (in limine) had rejected bail for two applicants.

pp. 22-23

02Issues

i.1. Whether a High Court can grant bail after a coordinate bench’s rejection and the Supreme Court’s dismissal of an SLP in limine.

pp. 23-25 / para. 5.2-5.4

ii.2. Whether self-incriminating statements recorded under Section 50 of the PMLA while the accused is in custody are admissible.

pp. 26-28 / para. 5.7-5.10

iii.3. Whether the prosecution established "foundational facts" under Section 24 regarding the existence of "proceeds of crime" linked to the predicate offence.

pp. 30-33 / para. 6.2-6.5

iv.4. Whether prolonged incarceration without trial violates the fundamental right to liberty under Article 21, overriding PMLA statutory restrictions.

pp. 39-40 / para. 9

03Law Applied

The court applied Section 45 of the PMLA, which mandates a twin-test for bail: reasonable grounds to believe the accused is not guilty and is unlikely to commit further offences.

pp. 17-18

It relied on Vijay Madanlal Choudhary v. Union of India regarding the necessity of established "foundational facts" for the Section 24 presumption.

p. 30

The court followed Prem Prakash v. Union of India, which held that custodial statements to the same agency are inadmissible due to lack of a "free mind".

pp. 26-27

It applied the principle from Kusal Toppo v. State of Jharkhand that dismissal of an SLP in limine does not affirm the lower court's judgment.

pp. 23-24

It invoked Arvind Dham v. ED and V. Senthil Balaji v. State, affirming that Article 21 (right to speedy trial) takes precedence over statutory bail restrictions during prolonged incarceration.

pp. 39-40

Provisions in the judgment · 18 · Linked ones open on LawLens

Prevention of Money-Laundering Act, 2002 9 provisions

Section 3 Section 4 Section 17 Section 19 Section 23 Section 24 Section 44 Section 45 Section 50

Indian Penal Code, 1860 Section 34 Section 274 Section 275 Section 276 Section 420 Section 468 Section 471

Code of Criminal Procedure, 1973 Section 438 Section 439

04Reasoning

The Court observed that since the Supreme Court dismissed previous SLPs in limine, it was not barred from reconsidering bail on fresh grounds.

pp. 23-24

It analyzed the Section 50 PMLA statements and determined they were recorded while applicants were in ED custody, rendering the self-incriminating portions inadmissible as they lacked voluntariness.

pp. 28-29

The Court found the ED failed to establish "foundational facts": there was no evidence linking the doctors/hospitals to the "empty vials," no end-users were examined to prove the drugs were spurious, and forensic reports showed the majority of seized vials actually contained genuine medicine.

pp. 33-37

Given that the ED requested six more months for investigation after applicants had already spent over two years in jail, the Court found a violation of Article 21.

pp. 40-41