Supreme Court Grants Bail To Amtek Auto Group Promoter Arvind Dham In Money Laundering Case

The Court was hearing an appeal challenging the order of the Delhi High Court, which had declined to grant regular bail to the appellant in proceedings initiated by the Directorate of Enforcement on the basis of predicate offences alleging large-scale bank fraud involving entities of the Amtek Group.

A Bench comprising Justice Sanjay Kumar and Justice Alok Aradhe, while allowing the appeal, held: “There is no likelihood of trial commencing in the near future. The continued incarceration in such circumstances, particularly where the evidence, which is primarily documentary in nature, is already in the custody of the prosecution, violates the right of the appellant to a speedy trial under Article 21 of the Constitution of India”.

Senior Advocate Mukul Rohatgi represented the appellant, while Suryaprakash V. Raju, A.S.G., represented the respondent.

Background

The appellant is a former promoter and non-executive Chairman of Amtek Auto Limited and a non-executive Director of another group entity. Insolvency proceedings were initiated against companies of the Amtek Group, following which FIRs were registered at the instance of public sector banks alleging commission of offences of cheating, criminal conspiracy and corruption, involving alleged fraud of several hundred crores of rupees.

On the basis of the said FIRs, the Directorate of Enforcement registered Enforcement Case Information Reports alleging laundering of proceeds of crime. The appellant was summoned, his statements were recorded, searches were conducted, and he was subsequently arrested.

Prosecution complaints and a supplementary prosecution complaint were thereafter filed, citing a large number of witnesses and voluminous documentary evidence. Cognisance, however, had not yet been taken.

The appellant’s application for bail was rejected by the Special Court as well as by the High Court, leading to the present appeal before the Supreme Court.

Court’s Observation

The Supreme Court reiterated that while considering a prayer for bail, courts are required to examine the gravity of the offence, the prescribed punishment, the object of the special statute, and the attending circumstances of the case. The Court observed that economic offences cannot be treated as a homogeneous class warranting blanket denial of bail.

The Bench emphasised that the right to speedy trial under Article 21 of the Constitution applies irrespective of the nature of the offence, and that statutory restrictions cannot result in indefinite pre-trial detention. The Court noted that prolonged incarceration pending trial may justify the grant of bail, particularly where there is no reasonable prospect of the trial concluding within a reasonable time.

Applying these principles, the Court recorded that the appellant had been in custody for a substantial period, that the investigation qua him had stood concluded, and that out of numerous individuals named in the proceedings, only the appellant had been arrested. The Court also noted that the maximum punishment prescribed for the offence was seven years.

The Bench further observed that the prosecution relied primarily on documentary evidence, which was already in the custody of the investigating agency, thereby reducing the possibility of tampering. The Court found no material to suggest that the appellant was a flight risk.

On the allegation of influencing a witness, the Court held that the same did not inspire confidence, particularly since the appellant was already in custody before the concerned individual was formally arrayed as a witness. Similarly, allegations regarding dissipation of proceeds of crime were found to be unsupported at this stage by any material linking the appellant to the transactions relied upon by the prosecution.

The Court also took note of the delay in the commencement of the trial, observing that the proceedings had been stalled for several months due to steps taken by the prosecution itself. In these circumstances, the continued incarceration of the appellant was held to be unjustified.

“Prolonged incarceration of an undertrial, without commencement or reasonable progress of trial, cannot be countenanced, as it has the effect of converting pretrial detention into a form of punishment”, the Apex Court concluded.

Conclusion

The Supreme Court concluded that the prolonged incarceration of the appellant, in the absence of any likelihood of trial commencing in the near future, would violate his right to a speedy trial under Article 21 of the Constitution.

Accordingly, the Apex Court allowed the appeal, setting aside the impugned order of the Delhi High Court, and directed that Arvind Dham be released on bail during the pendency of the trial. The conditions of bail were left to be fixed by the Trial Court.

The appellant was also directed to surrender his passport, not to leave India without permission of the Trial Court, and to furnish a contact number to the Directorate of Enforcement.

Cause Title: Arvind Dham v. Directorate of Enforcement (Neutral Citation: 2026 INSC 12)

Appearances

Appellant: Senior Advocates Mukul Rohatgi & Niranjan Reddy, with Advocates Mahesh Agarwal, Rishi Agrawala, Ankur Saigal, Ayushi Gaur, Anwesha Padhi, Sanjivani Pattajoshi, Sameer Rohatgi and Others

Respondent: Suryaprakash V. Raju, A.S.G., Advocates Zoheb Hussain, Annam Venkatesh, Samrat Goswani, Arvind Kumar Sharma, AOR, Anushka Gupta, Aakriti Mishra, Prakhar Bharadwaj and Others

Click here to read/download Judgment