Section 45 PMLA Does Not Require Detention Until An Uncertain End Of Trial: Delhi High Court Grants Bail To PMLA Accused After Nearly 4 Years In Custody
The Court despite serious allegations linked to NSCN(IM) against him and notwithstanding pendency of separate UAPA proceedings, held that to let the detention continue until an uncertain end of trial would allow pre-trial custody to assume a punitive character.
Justice Sanjeev Narula, Delhi High Court
The Delhi High Court has held that continuing the pre-trial detention of an under-trial accused under the Prevention of Money Laundering Act, 2002, until an uncertain end of trial, would allow custody to assume a punitive character. It further clarified that neither the rigours of Section 45 of the Act nor the seriousness of underlying allegations, including UAPA offences in the predicate case, can override the constitutional guarantee under Article 21 of the Constitution of India.
The Court further held that where an accused has undergone more than one-half of the maximum prescribed sentence and the delay in trial is not attributable to him, the statutory concern under Section 436A of the CrPC assumes particular significance and may, in appropriate cases, cause the twin conditions under Section 45 of the PMLA to yield to the constitutional imperative against prolonged incarceration.
A Bench of Justice Sanjeev Narula in a bail application filed by the accused seeking regular bail in a money laundering complaint arising from allegations of extortion and terror funding linked to the NSCN(IM), observed, “To continue the Applicant’s detention until an uncertain end of trial would allow pre-trial custody to assume a punitive character. Section 45 does not require that result, and Article 21 does not permit it”.
Advocate S. K. Srivastava appeared for the applicant and Vivek Gurnani, Panel Counsel appeared for the respondent.
The prosecution originated from the interception of a co-accused at Delhi Airport with cash of Rs 72 lakh allegedly meant for the proscribed organisation, following which the investigation was taken over by the National Investigation Agency. The Enforcement Directorate's case was that funds collected through extortion were routed through 59 bank accounts, including those in the applicant's name, amounting to approximately Rs 173.24 crore.
The applicant, arrayed as Accused No. 2, was arrested on 18 October 2022 while already in custody in the NIA proceedings, and his earlier bail application had been rejected by the Special Judge on March 16, 2026.
The Enforcement Directorate relied on specific transactions attributed to the applicant himself, including substantial withdrawals and deposits made after the co-accused's arrest and a witness's statement regarding the applicant's instructions to transfer Rs 1.18 crore, to contend that his involvement was active and knowing rather than incidental. The applicant maintained that the accounts, though in his name, were substantially controlled and operated by the co-accused, a close relative, and that the transactions relied upon did not establish his knowledge of the tainted source of funds.
Addressing the twin conditions under Section 45 of the PMLA, the Court held that while the material relied upon by the Enforcement Directorate raised circumstances against the applicant, whether those circumstances established knowing participation in laundering remained a matter for trial, and could not be treated as conclusive on the broad probabilities standard governing bail. On the likelihood of future offending, the Court found that the transactions cited dated back to 2019-20 and did not, by themselves, indicate that the applicant remained a risk after nearly four years in custody.
Turning to the length of incarceration, the Court noted that the applicant had crossed one-half of the maximum sentence of seven years under Section 4 of the PMLA, with the trial having examined only 5 of 27 listed witnesses.
The Court accordingly allowed the bail application and directed the applicant's release on furnishing a personal bond of Rs 50,000 with a surety of like amount, subject to conditions including surrender of passport, cooperation with investigation, and a restraint from contacting prosecution witnesses or tampering with evidence, while clarifying that the order was confined to the PMLA proceedings and did not affect his custody in the predicate case.
Cause Title: Masasasong Ao v. Directorate of Enforcement and Anr. (Neutral Citation: 2026:DHC:8301)
Appearances:
Applicant: S. K. Srivastava, Prince Kumar, Shubhi Srivastava, Garima Singh and Kriti Sharma, Advocates.
Respondent: Vivek Gurnani, Panel Counsel, Ch. Abhinandan Patra and Kanishk Maurya, Advocates.