While granting bail to a money laundering accused, the Supreme Court has observed that there is no timeline mentioned in the Prevention of Money Laundering Act (PMLA) under Section 19 to forward the arrest order and the material in possession to the Adjudicating Authority, but the same has to be done "immediately".

The appeal before the Apex Court was filed by the Appellant/Accused challenging the order of the Calcutta High Court whereby the Appellant’s prayer for regular bail under Section 439 of the Code of Criminal Procedure, 1973, read with Section 45 of the Prevention of Money Laundering Act, 2002, was rejected.

The Division Bench of Justice Aravind Kumar and Justice Vipul M. Pancholi held, “There is no timeline mentioned in PMLA to forward the arrest order and the material in possession to the Adjudicating Authority. It has to be done “immediately”. The word “immediately” does not mean within 24 hours or within a set time limit, it means that the material has to be transferred expeditiously and simultaneously. When the records of the case run into thousands of pages, it is natural for the arresting officer to require some time to forward the same. Again, this time cannot be strictly defined, but as long as the forwarding of the material is simultaneous with the arrest, with no delay, except for that which is absolutely necessary, the same cannot be said to be falling foul of Section 19(2) of the Act. Practicalities must not be rendered otiose.”

Advocate Jatin Sehgal represented the Appellant while Additional Solicitor General Anil Kaushik represented the Respondent.

Factual Background

The regular bail application was filed by the Appellant / Accused in connection with a case registered under Sections 120B,420 and 477A of the IPC read with Sections 13(1)(d) & 13(2) of the Prevention of Corruption Act. The case emanates from a CIRP initiated against M/s. Concast Steel and Power Limited, which went into liquidation. In 2021, an application was filed by the Liquidator under Sections 43, 45 and 66 of the IBC, 2016, alleging several fraudulent and avoidable transactions indulged in by the management of M/s. Concast Steel and Power Limited during or prior to the CIRP proceedings. The NCLT dismissed the said application.

The CBI registered an FIR under Sections 420, 477A and 120B of the IPC and Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act. Subsequently, approximately one year and three months after registration of the FIR, an ECIR was registered against the Appellant and four other accused persons. It was alleged that the appellant had orchestrated a complex web of financial transactions to fraudulently inflate the company’s turnover, secure credit from a consortium of banks led by the State Bank of India, and divert those funds for personal enrichment through 62 shell companies.

The Appellant created 62 shell companies; 34 persons were made dummy directors, and his relatives manned 20 companies, contributing to the offence of money laundering. The Appellant was arrested by the Enforcement Directorate on December 18, 2024 and had remained in custody for about 20 months, the maximum punishment prescribed under the PMLA being seven years.

Arguments

It was the case of the appellant that the arrest was vitiated due to the non-compliance with Sections 19(1) and (2) and the invocation of Section 45 was legally impermissible. It was also argued that there was a delay of 5 days in forwarding the arrest order and material in possession to the Adjudicating Authority, which constituted non-compliance with Section 19(2).

Reasoning

The Bench, at the outset, stated, “In a bail matter, especially in serious offences, the job of a Court is to balance the rights of the State with those of the Arrestee. In special laws such as PMLA, 2002, the conditions for granting bail are stringent, and the circumstances in which bail can be granted are rare, for the simple reason that economic offences of a large magnitude punch a whole through the financial fabric of the country, causing a top-down ripple effect into the entire eco-system resulting in large consequences for most of the population. That is the justification for making the provisions of PMLA stringent. In the same breath, sight must not be lost of the fact that the institutions have a duty to expeditiously investigate the cases, or else the justification to keep an accused person under custody for an indefinite period of time. Process must not be turned into a punishment unto itself.”

The Bench refused to accept the contention of the Appellant that the arrest was rendered illegal and there was non-compliance with Section 19(2) because there was a delay of 5 days in forwarding the arrest order and material in possession to the Adjudicating Authority. The Bench explained that when an investigating agency is collecting, assimilating, and compiling evidence to be forwarded, there can be administrative requirements which need to be fulfilled and which might require a few days of time to be adhered to. “Hence, there is no merit in the contention that the delay of five days will jeopardise the state of arrest itself”, it added.

However, the Bench accepted the appellant’s contention that the magnitude of the case rendered it impossible for the trial to be completed anytime soon. The Bench noticed that the Appellant has been in custody for over 20 months for an offence which has a punishment period of 7 years. The investigation had been completed qua Appellant. “No purpose will be served by keeping the accused person behind bars now”, it held while also adding, “The twin conditions under Section 45 of the PMLA cannot override the constitutional safeguards under Article 21 of the Constitution, as has been held in the case of Manish Sisodia v. Directorate of Enforcement1 . Prolonged incarceration, if allowed to continue, will set at naught the constitutional safeguards extended to the accused persons.”

Thus, allowing the appeal, the Bench ordered the appellant to be released on bail, subject to furnishing bail bonds to the satisfaction of the Trial Court.

Cause Title: Sanjay Sureka @Sanjay Kumar Sureka v. Directorate Of Enforcement (Neutral Citation: 2026 INSC 1124)

Appearance

Appellant: Advocates Jatin Sehgal, Ranjita Rohatgi, Ankur Chawla, Devna Soni, Arshdeep Singh Khurana, C B Bansal, Raymon Singh, Shivam Tandon, Atif Akhtar, Ashish Garg, Annada Dubey, Amir Khan, Yuvraj Nandal, Janhavi Negi, AOR Shagufa Salim

Respondent: Additional Solicitor General Anil Kaushik, Senior Advocate Zoheb Hossain, Advocates Arkaj Kumar, Pratyush Srivastava, Padmesh Mishra, Advocate Arvind Kumar Sharma, Advocate Arun Kumar Yadav, Adv

Click here to read/download Judgment


Justice Aravind KumarJustice Vipul M. Pancholi

Tulip Kanth

Assistant Editor

Tulip Kanth is an Assistant Editor at Verdictum having over 5 years of experience in the field of legal journalism and editing. She extensively covers judgments of the Supreme Court, High Courts as well as Tribunals. She has previously worked with a legal publishing website where she oversaw the work of other editors and has also created updates on notifications of different Government Ministries. She holds an English Honours Degree from SGTB Khalsa College, Delhi University and has completed her LLB course with specialisation in Corporate Law from Amity University.