Article 21 | Prolonged Pre-Trial Custody in PMLA Cases Violates Right to Liberty Even Without Conviction: Calcutta HC

The Calcutta High Court has held that prolonged pre-trial detention exceeding three years in a money laundering case, even where statutory bail conditions under Section 45 of the PMLA are technically unmet, constitutes a violation of the fundamental right to life and personal liberty under Article 21 of the Constitution. This ruling reaffirms that constitutional safeguards cannot be subordinated to procedural rigours when liberty is at stake.

Background & Facts

The Dispute

The petitioner, Prasenjit Das, is accused of involvement in a multi-crore forex trading fraud allegedly operated through the platform T.P. Global FX. The case originated from a complaint lodged by the Manager of Canara Bank, leading to the registration of FIR No. 290 of 2022 under Sections 120B, 420, 467, 468, and 471 of the Indian Penal Code on October 14, 2022. Although the petitioner was not named in the FIR, he was arrested on October 20, 2022, in connection with the predicate offence. The Enforcement Directorate (E.D.) registered the ECIR on October 21, 2022, triggering proceedings under the Prevention of Money Laundering Act, 2002 (PMLA). The petitioner was arrested under the PMLA on February 29, 2023, and has remained in custody since then.

Key Facts

• The predicate offence involved opening dummy bank accounts under fictitious firms to collect public investments under the guise of forex trading.
• The petitioner, along with co-accused Shailesh Kumar Pandey and Tushar Patil, allegedly operated these sham entities with no real business activity.
• The E.D. seized voluminous documentary evidence, including bank statements, account opening forms, and digital transaction records.
• The petitioner’s statement was recorded under Section 50 of the PMLA sixteen times between February 10, 2023, and March 27, 2023, and no further statements have been recorded since.
• The petitioner was granted bail in the predicate offence on grounds that the trial was unlikely to commence soon.
• The trial court dismissed the petitioner’s discharge application on September 27, 2024; this order was challenged before the High Court, which granted an interim order on November 26, 2024, permitting the petitioner to seek adjournment in the trial court.
• The E.D. has named 26 witnesses in the primary complaint and 8 in the supplementary complaint.
• The petitioner’s co-accused, Viraj Suhas Patil, was granted bail by the same court; Shailesh Kumar Pandey’s bail was denied.
• The petitioner has been in continuous custody since February 29, 2023 - over three years without trial.

Procedural History

• 14.10.2022: FIR No. 290 of 2022 registered at Hare Street Police Station.
• 20.10.2022: Petitioner arrested in connection with predicate offence.
• 21.10.2022: ECIR registered by E.D.
• 29.02.2023: Petitioner arrested under PMLA; custody commenced.
• 10.02.2023 to 27.03.2023: Sixteen Section 50 PMLA statements recorded.
• 27.09.2024: Trial court dismissed discharge application in predicate offence.
• 26.11.2024: High Court granted interim relief permitting petitioner to seek adjournment in trial court.
• 23.02.2026: Hearing concluded in the present bail application.
• 16.03.2026: Judgment delivered.

The Parties' Positions

For the Petitioner

The petitioner’s counsel argued that:

• Investigation against him is complete, as no further Section 50 statements have been recorded since March 27, 2023.
• The case rests entirely on documentary evidence in the E.D.’s custody, eliminating risk of tampering.
• The co-accused Viraj Suhas Patil, similarly situated, has been granted bail.
• The predicate offence trial is unlikely to commence due to pending discharge proceedings.
• If discharged from the predicate offence, Section 3 of the PMLA cannot apply, as proceeds of crime would not exist.
• Three years of custody without trial violates Article 21, and the twin conditions under Section 45 of the PMLA must yield to constitutional rights.
• Reliance was placed on multiple Supreme Court judgments including Y.S. Jagan Mohan Reddy, Manish Sisodia, P. Chidambaram, and V. Senthil Balaji.

For the Respondent (E.D.)

The E.D. contended that:

• The petitioner is on the same footing as Shailesh Kumar Pandey, whose bail was denied.
• The offence involves deep-rooted conspiracy, large-scale public fraud, and diversion of funds through dummy entities.
• Economic offences are a class apart and require stringent bail conditions.
• Grant of bail in the predicate offence does not negate the rigours of Section 45 of the PMLA.
• Article 21 cannot render statutory conditions otiose.
• The investigation is ongoing, and the case is pending consideration of charges.
• Reliance was placed on Vijay Madanlal Choudhary, Satyendra Kumar Jain, and Basudeb Bagchi.

Relief Sought

The petitioner sought release on bail, arguing that continued detention without trial violates his fundamental rights under Article 21. He requested bail subject to reasonable conditions, emphasizing that his custodial interrogation is no longer required.

The Legal Issue

Can the prolonged pre-trial detention of an accused for over three years in a PMLA case, where investigation is complete and the predicate offence trial is stalled, justify the denial of bail under Section 45 of the PMLA, despite the violation of the right to liberty under Article 21 of the Constitution?

Arguments Presented

For the Petitioner

The petitioner’s counsel argued that the statutory twin conditions under Section 45 of the PMLA - requiring the court to be satisfied that the accused is not guilty and is unlikely to commit an offence while on bail - cannot override the constitutional guarantee of personal liberty under Article 21 when detention exceeds three years without trial. They emphasized that the investigation is closed, the evidence is documentary and in the E.D.’s custody, and the petitioner has no incentive to flee or tamper with evidence. Reliance was placed on Y.S. Jagan Mohan Reddy, Manish Sisodia, and V. Senthil Balaji, where the Supreme Court held that prolonged incarceration without trial is a violation of Article 21, and constitutional courts must intervene even in economic offences.

For the Respondent

The E.D. argued that economic offences involving large-scale fraud and public fund diversion are inherently grave and require strict adherence to Section 45. They contended that the petitioner’s role in creating dummy firms and routing illicit funds places him on par with Shailesh Kumar Pandey, whose bail was denied. The E.D. asserted that the existence of proceeds of crime is still under investigation and that the petitioner’s release would undermine the integrity of the probe. They relied on Vijay Madanlal Choudhary and Satyendra Kumar Jain to argue that statutory conditions cannot be diluted merely due to delay.

The Court's Analysis

The Court began by acknowledging the seriousness of economic offences and the need for vigilance under the PMLA. However, it emphasized that no statute, however stringent, can override the foundational right to liberty under Article 21. The Court observed:

"A constitutional Court cannot be restrained from granting bail to an accused on account of restrictive statutory provisions in a penal statute if it finds that the right of the accused under Article 21 of the Constitution has been infringed. Howsoever stringent a statute may be, a Constitutional Court should lean in favour of constitutionalism and the rule of law of which liberty is an intrinsic part."

The Court noted that the petitioner’s custodial interrogation is complete, as no Section 50 statement has been recorded for over two years. The evidence, being documentary and in the E.D.’s possession, poses no risk of tampering. The witnesses are mostly official, reducing the likelihood of influence. The Court further held that the petitioner’s bail in the predicate offence and the stalled trial proceedings - due to pending discharge applications - render the prospect of a speedy trial remote.

The Court distinguished the petitioner’s position from that of Shailesh Kumar Pandey, whose bail was denied on grounds of active involvement in fund routing. In contrast, the petitioner’s role, as per his own statements, was limited to account creation, and his co-accused Viraj Suhas Patil - similarly situated - had already been granted bail. The Court also relied on Vijay Madanlal Choudhary, affirming that proceeds of crime must be established under Section 2(1)(u) of the PMLA for the offence to be triggered, and that absence of such proof negates the applicability of the Act.

The Court rejected the E.D.’s argument that Article 21 cannot override Section 45, holding instead that constitutional rights are not subordinate to statutory conditions when liberty is unduly compromised. The Court concluded that the petitioner’s continued detention, without trial and with investigation closed, amounts to punitive incarceration, which is constitutionally impermissible.

The Verdict

The petitioner’s bail application is allowed. He shall be released upon furnishing a personal bond of Rs. 10,00,000 with adequate sureties, half of whom must be local. He must surrender his passport immediately, remain within the territorial jurisdiction of the trial court, provide his current residential address to the trial court, E.D., and local police, appear on all hearing dates, refrain from tampering with evidence or contacting witnesses, not engage in any criminal activity, and provide his mobile number to the court without changing it without prior notice. Any breach of these conditions shall permit the trial court to cancel bail without reference to this Court. The Court clarified that this order is strictly for bail purposes and does not prejudge the merits of the case.

What This Means For Similar Cases

Prolonged Custody Triggers Article 21 Protection

• Practitioners must now argue that detention exceeding two to three years without trial in PMLA cases constitutes a prima facie violation of Article 21, irrespective of the nature of the offence.
• The burden shifts to the prosecution to demonstrate why continued custody is necessary when investigation is complete and trial is delayed.

Documentary Evidence Reduces Flight/Tampering Risk

• When the case rests on seized documents and official witnesses, courts are more likely to grant bail even under Section 45, as the risk of evidence tampering or witness intimidation is minimal.
• Counsel should highlight the absence of further custodial interrogation and the completion of Section 50 statements.

Bail in Predicate Offence Is a Relevant Factor

• Grant of bail in the predicate offence, especially when trial is stalled due to pending discharge applications, weakens the E.D.’s argument that the accused poses a flight risk or will obstruct justice.
• Courts may now treat parity with co-accused who have been granted bail as a compelling ground for similar relief.

Statutory Rigours Yield to Constitutional Rights

• The judgment establishes that Section 45 of the PMLA cannot be used as an absolute bar to bail when constitutional rights are infringed.
• This reinforces the principle from Manish Sisodia and V. Senthil Balaji: constitutional courts must act as guardians of liberty, even in economic crimes.

No Automatic Denial Based on Gravity

• The Court explicitly rejected the notion that the gravity of economic offences alone justifies indefinite detention.
• Practitioners can now cite this judgment to challenge blanket denials of bail in PMLA cases where delay is unexplained and custody is prolonged.