Aravindakshan.P.R.Vs Assistant Director, Directorate Of Enforcement

C.S.Dias, J

The applications are filed under Section 439 of the Code of Criminal Procedure, 1973, by the 15th and 16th accused in Crime No.ECIR/KCZO/45/2021, which is registered against 55 accused persons by the Enforcement Directorate, Cochin, for allegedly committing the offences under Section 3 read with Section 17 and punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (‘Act’, in short). The petitioners were arrested on 26.09.2023 and 23.09.2023, respectively. B. A No.2339/2024 is filed by the 15th accused, and B. A No.1568/2024 is filed by the 16th accused. As the applications arise out of the same crime, they were consolidated, jointly heard, and are being disposed of by this common order.

The prosecution case, in brief, is that, from 2014 to 2020, the accused 1 to 6 had sanctioned and disbursed multiple loans from the Karuvannur Service Co-operative Bank Ltd - 112 (‘Bank’, in short) to the same person, against the loan limits set by the Bank, by accepting the title deeds of the same property as collateral security, forging the membership records of the Society and including persons who are not members of the Society. The accused persons had furnished false addresses, manipulated the software of the computer system and disbursed loans in the names of property owners without their knowledge or consent. The accused persons had also manipulated the supermarket's inventory run by the Bank. Consequently, the accused persons have cheated the Bank Rs.100/- Crore. The first informant, Smt.Sreekala (Secretary-in-Charge of the Bank) filed a complaint before the Irinjalakkuda Police Station and FIR No.650/2021 was registered on 14.7.2021 against Sunil Kumar T.R, the former Secretary of the Bank (the thirty-third accused); Biju.M.K, the former Branch Manager of the Bank (the thirty-fourth accused); Jilse.C.K, the former Senior Accountant of the Bank (the sixteenth accused); Kiran.P.P., a member of the Society (the ninth accused); Bijoy.A.K, a Commission Agent (the first accused) and Reji Anil, the Accountant of the Supermarket for committing the offences under Sections 406, 420, 409 and 465 read with Sec.34 of the Indian Penal Code (‘IPC’, for short). Subsequently, the crime was transferred to the Crime Branch, by order No. D3- 108924/2021/PHQ dated 21.7.2021 and was re-registered as Crime No.165/2021. The DYSP-1, Crime Branch, Thrissur, by letter bearing No.289/DY.SP-I/CB/TSR/21 dated 22.9.2021, informed the Deputy Director of Enforcement Directorate, Kochi, regarding the details of the accused persons and the status of the crime. As Section 420 of the IPC is a scheduled offence under the Act, enquiries were initiated against the accused persons. After recording the facts of the scheduled offence, ECIR No.KCZO/45/2021, dated 2.8.2021, was registered. By committing the above criminal activity, the accused have obtained and possessed the proceeds of crime, layered and projected the proceeds of the crime as untainted money as defined under Sections 2(1)(u) and 2(1) (v) of the Act. The proceeds of the crime generated, acquired, possessed and concealed by the accused persons are now being projected and claimed as untainted money and properties. Thus, the accused have committed the above offences.

The essence of the prosecution case against the 15th accused, in the complaint, is that, out of the proceeds of the crime, which was in possession of Satheesh Kumar (14th accused), Rs.50/-lakh in cash was layered and deposited in fixed deposits in the name of the 15th accused in bank account No.9340. The 15th accused has deposited ten fixed deposits of Rs.5,00,000/- each in the bank. The 15th accused was a Municipal Counsellor, who received an honorarium of Rs.90,000/- per annum. He has not filed any income tax returns. However, on an analysis of the bank accounts of the 15th accused, substantial cash deposits were made in his bank accounts in the financial years 2014-2015 to 2017 -2018. The 15th accused was knowingly assisting the 14th accused in layering the proceeds of the crime. The five bank accounts of the 15th accused have been provisionally attached.

The crux of the prosecution case against the 16th accused, in the complaint, is that he was the former Accountant of the bank. He was not entitled to avail any loan from the bank as per the bye-laws. Yet, he has availed loans in the names of his family members by mortgaging the properties owned by his father. He availed three loans for Rs.1,50,00,000/-. Now, the outstanding loan amount is Rs.1,44,17,365/-. He has also availed loans in the names of five other persons for Rs.2,75,00,000/-. Now, the outstanding loan amount is Rs.3,62,46,556/-. Therefore, the total outstanding amount in the name of the 16th accused is Rs.5,06,63,921/-. He has parked the proceeds of the crime in the real estate business. The investigation has revealed that the 16th accused has not filed his income tax returns. But he has purchased immovable properties, with the proceeds of the crime, in his and his wife’s names. He has sold the properties and re-invested the proceeds of the crime in real estate. His wife was the Director of the CCM Traders in 2019. She also worked as a pharmacist. However, she could not produce any evidence for the source of her income. In her statement given on 10.11.2022, she stated that her husband did all the monetary transactions. Three items of properties purchased with the proceeds of the crime have been provisionally attached.

The main contentions of the 15th accused in the bail application are that he is the Counsellor of the Vadakkanchery Municipality. He has not received any loan from the bank. There is no material to implicate him as an accused in the case. It was a calculated move by his political opponents to get him implicated in the present crime. He had appeared before the Investigating Agency on seven occasions and produced all the relevant materials to prove his innocence. On 12.9.2023, he was manhandled by the Investigating Agency. He was arrested on 26.9.2023. The only allegation in the remand application that was filed was that one Kiran P.P (9th accused) had deposited Rs.20,00,500/- in his name, which was transferred by the 14th accused. The Enforcement Directorate Officials had got his custody on two occasions. The investigation in the case, so far as he is concerned, is complete. The complaint was filed on 14.07.2021. However, the investigation in Crime No.651/2021 for the predicate offence is not completed. He is not an accused in the said crime, and the charge sheet has not been filed. Even though the 15th accused had filed similar applications for bail before the Special Court, the same were dismissed by Annexures 10,11 and 13 orders. He was coerced to give statements according to the whims of the Investigating Agency. He does not have any criminal antecedents. He has been in judicial custody for the last nearly 15 months. He is ready to abide by any stringent condition that this Court may impose. Hence, the application may be allowed.

The core contentions of the 16th accused in his bail application are that he has not committed any of the offences alleged against him. He joined the Society in 2007. He worked as Peon, Junior Clerk, Accountant and the Supervisor of the Super Markets of the Society till 2020. He has no direct involvement with the Bank. Therefore, the prosecution's allegation that he used his official position to secure loans from the Bank is incorrect. The Investigating Officer has produced blank loan applications showing that he was a co-applicant. His signatures in the applications were forged. The seven persons, namely Paulson, Babu, Sreedeep, Shanim Shahul, Thankamma, Ibrahim and Shammer, in whose names the 16th accused had availed loans are incorrect. They are not fictitious persons but are members of the Society. They had given incorrect addresses in their application forms. The Bank granted the seven persons loans after getting sanction from the Administrative Board. The investigation in the case is complete, and a partial complaint has been filed, which runs into 30,000 pages. Although he had filed similar applications for bail, the same were dismissed by Annexures A1 and A2 orders. The 16th accused is suffering from hypertension and is under treatment. He has been in judicial custody for the last nearly 15 months. The investigation into the predicate offence is still ongoing. There is no likelihood of the trial commencing in the near future. He is also ready to abide by any stringent condition that this Court may impose. There are no reasonable grounds to find that the 16th accused has committed the above offences. He also has no criminal antecedents. Hence, the application may be allowed.

The respondents have filed a bail objection report in B.A No.2339/2024 refuting the contentions in the said application. The respondents have reiterated the allegations in the complaint and have narrated the statements of each of the witnesses. It is contended that there are reasonable grounds to believe that the 15th accused has committed the above offences. The 15th accused has not diluted the twin conditions under Section 45 of the Act. The 15th accused is an influential person. He has misappropriated Crores of rupees. Furthermore, the investigation is to be conducted to ascertain the trail of the proceeds of the crime, the beneficiaries of the proceeds of the crime and the role of each accused person. The investigation has revealed that the 15th accused has committed the above offences. In view of the settled position of the law under the Act, the 15th accused is not entitled to be released on bail. Hence, the bail application may be dismissed.

Heard; Sri. Arun Bose and Sri.R.Sudhish, the learned counsel appearing for the petitioners and Sri.C.L.Sundaresh, the learned  Additional  Solicitor  General  of  India,  assisted  by  Sri. Jayashankar V. Nair at length.

The   learned   counsel   appearing   for   the   15th accused contended that the Enforcement Directorate Officials have been conducting the investigation pertaining to the transactions between 2014 and 2016. The predicate offence originated from Crime 650/2021 registered by the Irinjalakuda Police Station for committing the predicate offence under Sec.420 of the IPC. Although the complaint was filed on 14.7.2021 in the present crime, the investigation of the predicate offence is not complete, and the charge sheet has not been filed. The 15th accused is not an accused in the crime. He has not availed any loan from the bank. No material has been seized from his possession. Though it was initially alleged that the 15th accused received Rs.63,56,400/- in his mother's name, the said allegation has been given up in the complaint. The 15th accused has clearly given his explanation regarding his source of income. He was receiving the honorarium for ten years. He was running a quarry business from 2010 to 2016 and earned Rs.50,000/- per month. He was employed as a driver and earned Rs.5000/- per month. He had also conducted a hotel. The 14th accused had transferred Rs.20,00,500/- to his account only for the purpose of taking a demand draft in favour of the Malabar Medical College, Calicut, for securing medical admission for the 14th accused daughter. The 15th accused withdrew the said amount on the same day, took a demand draft in favour of the institution, and handed it over to the 14th accused. The punishment that can be imposed on the 15th accused is between 3 and 7 years. There is no material to substantiate the 15th accused’s involvement in the crime. There is no likelihood of the trial in the case commencing in the near future. The petitioner does not have any criminal antecedents. The learned counsel relied on the decisions of the Honourable Supreme Court in Shaheen Welfare Association vs. Union of India and Others [(1996) 2 SCC 616], Prem Prakash vs. Union of India[MANU/SC/0943/2024], Javed Gulam Nabi Shaikh vs. State of Maharashtra and Others [2024 SCC Online SC 1693], Manish Sisodia v. Directorate of Enforcement [(2024 SCC Online SC 1920], Sekar @ Sekar Reddy.J vs. Directorate of Enforcement[2022 (7) SCC 370], Senthil Balaji V. vs. Deputy Director, Directorate of Enforcement [2024 SCC Online SC 2626] and South Indian Bank Ltd.  Thrissur  vs. Directorate of Enforcement, Cochin[2024 (5) KHC 214], to support his contentions. He prayed that the application may be allowed.

The learned counsel appearing for the 16th accused also vehemently argued that there is no material to substantiate the said petitioner's involvement in the crime. The allegation that the said petitioner had availed loans in the name of fictitious persons is false. All the so-called fictitious people are very much alive. It is only because they gave incorrect addresses in their loan application forms that they could not be traced out. The petitioner's signature has been forged in the loan applications. The loans were sanctioned in favour of the loanees as per the bye-laws of the banks and approved by the Administrative Board of the Society. The allegation that there was an undervaluation of the property is incorrect. The petitioner is suffering from hypertension and has been advised regular medical treatment. The predicate crime is still under investigation. There is no possibility of the trial in the case commencing in the near future. The learned counsel relied on the decisions of the Honourable Supreme Court in Vijaya Nair v. Directorate of Enforcement [SLP (Crl. No.22137/2024] and Senthil Balaji’s case (supra). He prayed that the application may be allowed.

The learned Additional Solicitor General of India opposed the applications. He drew the attention of this Court to the allegations in the complaint and the statements of the witnesses. He reiterated the contentions in the bail objection report. He relied on the decision of the Hon'ble Supreme Court in Himanshu Chandravadan Desai v. State of Gujarat [(2005) 13 SCC 234] to buttress his contentions. He submitted that the applications may be dismissed.

The power of the Courts to grant bail to a person accused of an offence under the Act is circumscribed by Section 45 of the Act. It is apposite to refer to the said provision, which reads as follows:

“45. Offences to be cognisable and non-bailable―

(1) [Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence [under this Act] shall be released on bail or on his own bond unless]

(i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the Court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail:

Provided that a person, who is under the age of sixteen years or is a woman or is sick or infirm [or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees] may be released on bail, if the Special Court so directs:

Provided further that the Special Court shall not take cognizance of any offence punishable under section 4 except upon a complaint in writing made by; -

(i)  the Director; or

(ii) any officer of the Central Government or State Government authorised in writing in this behalf by the Central Government by a general or a special order made in this behalf by that Government.

[(1-A) Notwithstanding anything contained in the Code of Criminal Procedure, 1973 (2 of 1974), or any other provision of this Act, no police officer shall investigate into an offence under this Act unless specifically authorised, by the Central Government by a general or special order, and, subject to such conditions as may be prescribed;

(2) The limitation on granting of bail specified in [***] of sub-section (1) is in addition to the limitations under the Code of Criminal Procedure, 1973 (2 of 1974) or any other law for the time being in force on granting of bail.”

Section 45 of the Act starts with a non-obstante clause, which has an overriding effect on the general provisions of the Code of Criminal Procedure (Cr. P.C). There is a specific embargo to grant bail to a person accused of an offence under the Act, which is: (i) that the Public Prosecutor must be given an opportunity to oppose the application for bail, and (ii) the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not likely to commit any offence while he is on bail.

In addition to the above stipulation, Section 65 of the Act mandates that the provisions of the Cr. P.C shall apply in so far as they are not inconsistent with the provisions of the Act. Likewise, Section 71 of the Act states that the provisions of the Act shall have an overriding effect, notwithstanding anything inconsistent contained in any other law for the time being in force. Therefore, the conditions enumerated in Section 45 of the Act have to be complied with even in respect of an application for bail made under Section 439 of Cr. P.C. Consequently, the power to grant bail to a person accused of having committed an offence under the Act is not only subject to the limitations imposed under Section 439 of Cr. P.C., but also subject to the rigour imposed by the twin conditions under sub-section (1) of Section 45 of Act.

In Gautam Kundu v. Directorate of Enforcement [(2015) 16 SCC 1], the Hon’ble Supreme Court has held that compliance with Section 45 of the Act is mandatory to grant bail to an accused person.

In Vijay Madhanlal Choudhary v. Union of India [2022 SCC Online SC 929] a three-judge Bench of the Hon’ble Supreme Court has observed the following:

“400. It is important to note that the twin conditions provided under Section 45 of the 2002 Act, though restrict the right of the accused to grant of bail, but it cannot be said that the conditions provided under Section 45 impose absolute restraint on the grant of bail. The discretion vests in the Court which is not arbitrary or irrational but judicial, guided by the principles of law as provided under Section 45 of the 2002 Act. While dealing with a similar provision 633 supra at footnote No.3 prescribing twin conditions in MCOCA, this Court in Ranjitsing Brahmajeetsing Sharma, held as under:

“44. The wording of Section 21(4), in our opinion, does not lead to the conclusion that the court must arrive at a positive finding that the applicant for bail has not committed an offence under the Act. If such a construction is placed, the court intending to grant bail must arrive at a finding that the applicant has not committed such an offence. In such an event, it will be impossible for the prosecution to obtain a judgment of conviction of the applicant. Such cannot be the intention of the legislature. Section 21(4) of MCOCA, therefore, must be construed reasonably. It must be so construed that the court is able to maintain a delicate balance between a judgment of acquittal and conviction and an order granting bail much before commencement of trial. Similarly, the Court will be required to record a finding as to the possibility of his committing a crime after grant of bail. However, such an offence in futuro must be an offence under the Act and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence.

It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail.

The duty of the court at this stage is not to weigh the evidence meticulously but to arrive at a finding on the basis of broad probabilities. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail undoubtedly would be tentative in nature, which may not have any bearing on the merit of the case and the trial court would, thus, be free to decide the case on the basis of evidence adduced at the trial, without in any manner being prejudiced thereby”.

We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the Court based on available material on record is required. The Court will not weigh the evidence to find the guilt of the accused which is, of course, the work of Trial Court. The Court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the Trial Court in recording its finding of the guilt or acquittal during trial which is based on the evidence adduced during the trial. As explained by this Court in Nimmagadda Prasad, the words used in Section 45 of the 2002 Act are “reasonable grounds for believing” which means the Court has to see only if there is a genuine case against the accused and the prosecution is not required to prove the charge beyond reasonable doubt”.

The allegations against the 15th accused are that he, without sufficient income or resources, had deposited Rs.50/—Lakh in ten fixed deposits of Rs.5/—Lakh each on 02.03.2017 and 04.10.2017, respectively. He made substantial cash deposits in his bank accounts and received Rs. 20,00,500/—from the 14th accused by bank transfer.

The defence of the 15th accused is that the investigation pertains to the transactions between 2014 and 2016. He is not an accused in the predicate offence. He has not availed of any loan from the Bank; he had sufficient income as honorarium, quarry business, salary as a driver and his hotel business. Although it was initially alleged that he received Rs.63,56,400/- in his mother's name, the allegation has been given up in the complaint. The 14th accused had transferred Rs.20,00,500/- to his bank for the purpose of getting a demand draft for the admission of the 14th accused’s daughter to the Malabar Medical College, Calicut. The amount was received and withdrawn on the same day, and a demand draft was drawn in favour of the college.

Similarly, the allegations against the 16th accused are that he had availed loans for Rs.1,50,00,000/- in the name of his family members by mortgaging the properties owned by his father. He has also availed loans in the names of seven other persons for Rs.2,75,00,000/-. Now, the outstanding amount in the above loan accounts is Rs.5,06,63,921/-. He has parked the proceeds of the crime in the real estate by purchasing immovable properties in his and his wife’s names.

The defence of the 16th accused is that the so-called fictitious persons, in whose names he had allegedly availed loans, are very much alive. They are all members of the Bank. He only worked for the Society and had nothing to do with the Bank. His signature was forged in the loan applications. The loans were sanctioned in favour of the loanees as per the bye-laws of the Bank and approved by the Administrative Board of the Society.

In addition to the petitioners' defence regarding their alleged acts of cheating, it is undisputed that they have been in judicial custody for the last 14 months.

A three-judge Bench of the Honourable Supreme Court in Union of India v. K.A.Najeeb [(2021) 3 SCC 713] had considered the question of long incarceration and its effect on Section 43-D (5) of the Unlawful Activities (Prevention) Act, 1967 AP Act, and held as follows:

“17. It is thus clear to us that the presence of statutory restrictions like Section 43-D(5) of the UAPA per se does not oust the ability of the constitutional courts to grant bail on grounds of violation of Part III of the Constitution. Indeed, both the restrictions under a statute as well as the powers exercisable under constitutional jurisdiction can be well harmonised. Whereas at commencement of proceedings, the courts are expected to appreciate the legislative policy against grant of bail but the rigours of such provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence. Such an approach would safeguard against the possibility of provisions like Section 43-D(5) of the UAPA being used as the sole metric for denial of bail or for wholesale breach of constitutional right to speedy trial.”

Recently, in the case of Manish Sisodia v. Directorate of Enforcement [(2024 SCC Online SC 1920] the Honourable Supreme Court observed thus:

“49. We find that, on account of a long period of incarceration running for around 17 months and the trial even not having been commenced, the appellant has been deprived of his right to speedy trial.

As observed by this Court, the right to speedy trial and the right to liberty are sacrosanct rights. On denial of these rights, the trial court as well as the High Court ought to have given due weightage to this factor.

Recently, this Court had an occasion to consider an application for bail in the case of Javed Gulam Nabi Shaikh v. State of Maharashtra6 wherein the accused was prosecuted under the provisions of the Unlawful Activities (Prevention) Act, 1967. This Court surveyed the entire law right from the judgment of this Court in the cases of Gudikanti Narasimhulu v. Public Prosecutor, High Court of Andhra Pradesh7, Shri Gurbaksh Singh Sibbia v. State of Punjab8, Hussainara Khatoon (I) v. Home Secretary, State of Bihar9, Union of India v. K.A. Najeeb10 and Satender Kumar Antil v. Central Bureau of Investigation11. The Court observed thus:

“19. If the State or any prosecuting agency including the court concerned has no wherewithal to provide or protect the fundamental right of an accused to have a speedy trial as enshrined under Article 21 of the Constitution then the State or any other prosecuting agency should not oppose the plea for bail on the ground that the crime committed is serious. Article 21 of the Constitution applies irrespective of the nature of the crime.”

The Court also reproduced the observations made in Gudikanti Narasimhulu (supra), which read thus:

“10. In the aforesaid context, we may remind the trial courts and the High Courts of what came to be observed by this Court in Gudikanti Narasimhulu v. Public Prosecutor, High Court, (1978) 1 SCC 240. We quote:

“What is often forgotten, and therefore warrants reminder, is the object to keep a person in judicial custody pending trial or disposal of an appeal. Lord Russel, C.J., said [R v. Rose, (1898) 18 Cox]:

“I observe that in this case bail was refused for the prisoner. It cannot be too strongly impressed on the, magistracy of the country that bail is not to be withheld as a punishment, but that the requirements as to bail are merely to secure the attendance of the prisoner at trial.”

The Court further observed that, over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straight forward open and shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency. It is high time that the trial courts and the High Courts should recognize the principle that “bail is rule and jail is exception”.

In the present case, in the ED matter as well as the CBI matter, 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitized documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind the bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution. As observed time and again, the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial.

As observed by this Court in the case of Gudikanti Narasimhulu (supra), the objective to keep a person in judicial custody pending trial or disposal of an appeal is to secure the attendance of the prisoner at trial.

In the present case, the appellant is having deep roots in the society. There is no possibility of him fleeing away from the country and not being available for facing the trial. In any case, conditions can be imposed to address the concern of the State.

Insofar as the apprehension given by the learned ASG regarding the possibility of tampering the evidence is concerned, it is to be noted that the case largely depends on documentary evidence which is already seized by the prosecution. As such, there is no possibility of tampering with the evidence. Insofar as the concern with regard to influencing the witnesses is concerned, the said concern can be addressed by imposing stringent conditions upon the appellant.

……………………………………….”

Subsequently in Senthil Balaji V v. Deputy Directorate of Enforcement [2024 SCC Online SC 2626] the Honourable Supreme Court has reiterated the principles in Manish Sisodia’s case, by observing in the following lines:

“27. Under the Statutes like PMLA, the minimum sentence is three years, and the maximum is seven years. The minimum sentence is higher when the scheduled offence is under the NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45(1)(ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence. Another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary powers, as held in the case of K.A. Najeeb2, can only be exercised by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction under Article 32 or Article 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45(1) (ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where, considering the antecedents of the accused, there is every possibility of the accused becoming a real threat to society if enlarged on bail. The jurisdiction to issue prerogative writs is always discretionary.

Some day, the courts, especially the Constitutional Courts, will have to take a call on a peculiar situation that arises in our justice delivery system. There are cases where clean acquittal is granted by the criminal courts to the accused after very long incarceration as an undertrial. When we say clean acquittal, we are excluding the cases where the witnesses have turned hostile or there is a bona fide defective investigation. In such cases of clean acquittal, crucial years in the life of the accused are lost. In a given case, it may amount to violation of rights of the accused under Article 21 of the Constitution which may give rise to a claim for compensation.

As stated earlier, the appellant has been incarcerated for 15 months or more for the offence punishable under the PMLA. In the facts of the case, the trial of the scheduled offences and, consequently, the PMLA offence is not likely to be completed in three to four years or even more. If the appellant's detention is continued, it will amount to an infringement of his fundamental right under Article 21 of the Constitution of India of speedy trial.

(emphasis supplied)

In the case on hand, the petitioners have been in judicial custody for the last 14 months; the investigation of the crime, so far as the petitioners are concerned, is complete, and the complaint has been filed. But the investigation into the predicate offence is not complete and the charge sheet has not been filed. Therefore, there is not even the remotest possibility of the trial in the crime commencing in the near future. So, keeping the petitioners in indefinite incarceration till the culmination of the trial will infringe on their right to life guaranteed under Article 21 of the Constitution of India. The petitioners have strong roots in the State. The apprehension of the prosecution that the petitioners may flee from justice, can be adequately safeguarded by imposing stringent conditions. The petitioners have volunteered to abide by any condition that may be imposed by this Court and they will cooperate with the investigation.

On considering the prosecution allegations and the explanations put forward by the petitioners, which have been narrated above, this Court is satisfied that there are reasonable grounds to hold that the petitioners have not committed the above offences. As the petitioners have no criminal antecedents, going by the law laid down by the Honourable Supreme Court in Dheeraj Kumar Shukla v. State of Uttar Pradesh [2023 SCC Online SC 918], this Court has no hesitation to hold that the petitioners are not likely to commit an offence if they are enlarged on bail. This Court is convinced that the petitioners have satisfactorily diluted the twin conditions under Section 45 of the Act. Hence, I hold that the petitioners are entitled to be enlarged on bail.

Consequentially, the applications are allowed, by directing the petitioners to be released on bail on them executing a bond for Rs.2,00,000/- (Rupees two lakh only) each, with two solvent sureties for the like sum, to the satisfaction of the jurisdictional court, which shall be subject to the following conditions:

(i) The petitioners shall appear before the Investigating Officer on every first and third Saturday between 9 a.m. and 11 a.m. till the investigation in the present crime is completed. They shall also appear before the Investigating Officer as and when required;

(ii) The petitioners shall not directly or indirectly make any inducement, threat or procure to any person acquainted with the facts of the case so as to dissuade them from disclosing such facts to the court or to any Police Officer or tamper with the evidence in any manner, whatsoever;

(iii)The petitioners shall not commit any offence while they are on bail;

(iv)The petitioners shall surrender their passports, if any, before the jurisdictional court at the time of execution of the bond. If they have no passport, they shall file an affidavit to the effect before the said court on the date of execution of the bond;

(v) The petitioners shall not leave the territorial jurisdiction of the jurisdictional court without its previous permission;

(vi) In case of violation of any of the conditions mentioned above, the jurisdictional court shall be empowered to consider the application for cancellation of bail, if any filed, and pass orders on the same, in accordance with law;

(vii) Applications for deletion/modification of the bail conditions shall be moved and entertained by the jurisdictional court;

(viii) Needless to mention, it would be well within the powers of the Investigating Officer to investigate the matter and, if necessary, to effect recoveries on the information, if any, given by the petitioners even while the petitioners are on bail as laid down by the Hon'ble Supreme Court in Sushila Aggarwal v. State (NCT of Delhi) and Another [2020 (1) KHC 663].

(ix) The observations made in this order are only for the purpose of considering the applications and the same shall not be construed as an expression on the merits of the case, which shall be decided by the competent court.