Delhi High Court
Arvind Dham vs Directorate Of Enforcement on 19 August, 2025
$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
%
Pronounced on: 19.08.2025
+ BAIL APPLN. 544/2025 & CRL.M.(BAIL) 262/2025
INTERIM BAIL
ARVIND DHAM .....Petitioner
Through: Mr. Vikas Pahwa, Senior
Advocate with Mr. Sumer
Singh Boparai, Mr. Shambhu
K. Thakur, Mr. Ayush Puri, Mr.
Abhihsek Singh, Mr. Sirhaan
Seth, Mr. Sidhant Saraswat, Mr.
Surya Pratap Singh, Mr.
Abhilash Kumar Pathak, Mr.
Talib Mustafa, Mr. Khanav
Madnani, Ms. Sanskriti S.
Gupta, Advocates.
versus
DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Zoheb Hossain, Special
Counsel and Mr. Manish Jain,
Special Counsel with Mr. Vivek
Gurnani, Panel Counsel with
Mr. Kartik Sabharwal, Mr.
Pranjal Tripathi, Mr. Rakesh
Jourawal, Advocates.
CORAM:
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BAIL APPLN. 544/2025
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HON'BLE MR. JUSTICE RAVINDER DUDEJA
JUDGMENT
RAVINDER DUDEJA, J.
1. That the present application is being preferred under Section
483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 [“BNSS”] read
with Section 45 of the Prevention of Money Laundering Act, 2002
[“PMLA”] for grant of regular bail on behalf of Mr. Arvind Dham
[“Petitioner”] who has been arraigned as Accused No. 1 in
ECIR/GNZO/13-14/2024 and ECIR/GNZO/14/2024 arising out of
FIRs having RC No. RC2202022E00199 dated 29.12.2022 and RC
No. RC22322A009 dated 21.12.2022 which were registered by CBI,
AC-V, New Delhi. Petitioner filed a bail application before the Ld.
Special Judge, which was dismissed vide order dated 21.01.2025.
Brief Background
2. The present proceedings arise out of an ECIR registered by the
Enforcement Directorate (“ED”) pursuant to large-scale allegations of
financial mismanagement, fraud, and money laundering within the
Amtek Group of companies, including Amtek Auto Ltd., ACIL Ltd.,
and allied entities. The trigger for investigation was a Public Interest
Litigation before the Supreme Court highlighting bank frauds
exceeding ₹12,000 crores, alongside multiple FIRs lodged by the CBI
and other agencies. These FIRs alleged diversion of funds and creation
of shell entities to siphon public money. The alleged activities have
caused immense losses to public sector banks. The scale of the matter
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necessitated a detailed investigation under the Prevention of Money
Laundering Act, 2002 (“PMLA”).
3. The investigation encompassed the affairs of M/s Amtek Auto
Ltd., M/s Metalyst Forging Ltd., Castex Technologies Ltd., ACIL Ltd.,
and ARGL Ltd., which had collectively availed loans exceeding
₹26,000 crores from a consortium of public sector banks, including
SBI, IDBI Bank, Karur Vysya Bank, and Bank of Maharashtra. Due to
defaults in repayment, these accounts turned into Non-Performing
Assets. Forensic and transaction audits by resolution professionals
revealed fraudulent diversion and misuse of these loan proceeds.
These revelations formed the factual substratum for initiation of
proceedings under the PMLA. The allegations indicate a concerted
scheme of misappropriation affecting multiple stakeholders.
4. Two specific FIRs registered by the CBI form part of the
scheduled offences underlying the present PMLA case. FIR No.
RC2202022E0019, dated 29.12.2022, emanated from a complaint by
Bank of Maharashtra alleging diversion of funds by ACIL Ltd. and its
directors under Sections 120B/420 IPC and Section 7(c) of the
Prevention of Corruption Act, 1988. FIR No. RC2232022A0009,
dated 21.12.2022, arose from a complaint by IDBI Bank alleging
fraudulent term loan availed by ACIL Ltd., attracting Sections
120B/420 IPC and Sections 13(2) r/w 13(1)(d) of the Prevention of
Corruption Act, 1988. Additionally, SFIO investigations disclosed
commission of offences under Section 447 of the Companies Act,
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2013, also a scheduled offence under PMLA. These multiple
proceedings converge into the present ECIR.
5. The FIRs and SFIO investigation highlighted systematic
diversion of loans and misuse of bank facilities for purposes other than
those sanctioned. It was alleged that large portions of loan amounts
were diverted to acquire real estate, benefit related parties, and fund
non-core activities. The investigations also revealed deliberate
concealment of beneficial ownership and manipulation of corporate
structures. These acts, if proved, fall squarely within the ambit of
“proceeds of crime” under the PMLA. The findings warranted
sustained investigative attention.
6. The Supreme Court, in W.P. (Crl.) No. 246 of 2022, directed a
thorough investigation into an estimated ₹27,000 crore bank fraud
involving the Amtek Group. The Court observed prima facie diversion
of public funds into land acquisitions and real estate projects for the
benefit of directors’ family members. It also noted possible collusion
by accounting firms and Resolution Professionals in the insolvency
process. The emphasis was on ensuring that mere settlement of bank
accounts could not shield such acts from criminal scrutiny. These
directions formed the foundation for the ED’s ongoing investigation.
7. In parallel, several Amtek Group companies entered insolvency
proceedings under the Insolvency and Bankruptcy Code, 2016.
Resolution Professionals reported significant financial
mismanagement aggravated by fraudulent transactions and fund
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diversion. Multiple entities, including Deccan Value Investments and
Ramkrishna Forgings Ltd., acquired these companies through
resolution plans. However, the fraudulent acts attributed to the former
promoters, including the applicant, continued to be investigated. The
total liabilities acknowledged in these processes exceeded ₹27,000
crores.
8. The ED investigation focused on fraudulent auditing practices,
inflation of plant and machinery values in financial statements, and
manipulation of books to obtain further credit facilities. Statements
recorded under Section 50 of the PMLA from statutory auditors
implicated top management in these activities. Examination of
accounts since 2012-13 revealed that loans purportedly taken for
capital expansion were never utilised for their stated purposes. Instead,
funds were diverted to fixed assets entries to enable additional
borrowings. Such conduct evidences a systematic plan to mislead
lenders.
9. Transaction audits and fixed asset reviews by reputed firms such
as Deloitte and EY further substantiated the diversion of loan funds
and the acquisition of real estate through disguised transactions. Funds
were routed into unlisted shell companies with complex shareholding
patterns to obscure their origin. Promoters allegedly used these
structures to pledge inflated investments to secure further loans. The
ED concluded that the group’s corporate machinery was deployed to
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launder the proceeds of crime. These findings reinforced the
seriousness of the allegations.
10. On 20.06.2024, ED conducted search operations at 40 locations,
including premises of auditors, finance staff, and benami directors
linked to the Amtek Group. Seized materials included property
documents for over 200 immovable assets valued at more than ₹2,000
crores, cash worth ₹2.67 crores, and gold/jewellery valued above
₹4.25 crores. Evidence of loans between ₹25,000 and ₹30,000 crores
being diverted to acquire land parcels and make stock market
investments was collected. Securities worth more than ₹2,000 crores
were found in listed companies beneficially owned by the applicant
and his family. The ED thereafter moved the Adjudicating Authority
for retention and freezing of seized assets.
11. The ED’s provisional attachment order under Section 5(1)
PMLA covered immovable and movable assets worth ₹5,115.32 crores
as direct proceeds of crime. A prosecution complaint dated 06.09.2024
was filed against the applicant and 15 co-accused before this Court
under Sections 44 and 45(1) PMLA. The investigation pegs the total
proceeds of crime at over ₹26,000 crores arising from the top five
Amtek Group companies. It is alleged that the applicant alienated
properties and concealed ownership to obstruct proceedings. These
allegations form the basis of the present prosecution.
Role of the Applicant:
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12. The applicant, Mr. Arvind Dham, was the promoter and
controlling mind of the Amtek Group, managing the affairs of its
flagship companies, including Amtek Auto Ltd., ACIL Ltd., Metalyst
Forging Ltd., Castex Technologies Ltd., and ARGL Ltd. He served as
Managing Director/Director in multiple group entities and was
actively involved in all strategic and operational decisions. The
investigation establishes that he spearheaded the diversion of loan
funds and the systematic defrauding of financial creditors. As ultimate
beneficial owner of the flagship companies, he exercised control
through a complex web of over 500 group and shell entities. His role
was central in designing and executing the fraudulent schemes.
13. The applicant manipulated the financial records of flagship
companies by overstating fixed assets, inflating profits, and
understating expenditures. These manipulations were achieved
through fictitious sales and purchases, misclassification of expenses,
and creation of false debit notes to mislead lenders and investors. He
coordinated with statutory auditors to have falsified accounts audited
and filed with regulatory authorities. The investigation pegs the
overstatement of fixed assets alone at over ₹15,000 crores. Such
fraudulent financial reporting facilitated continued borrowing and
concealment of the group’s true financial position.
14. Statements recorded under Section 50 of the PMLA from
employees and dummy directors confirm that the applicant and his
family were the true beneficial owners of numerous entities used for
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layering and concealment of proceeds of crime. The shareholding of
flagship companies was structured through entities such as Alliance
Integrated Metaliks and WLD Investments Pvt. Ltd., controlled by
relatives and family trusts of the applicant. Many dummy directors
were low-level employees paid meagre salaries who acted on
instructions of the applicant. He also personally negotiated financing
arrangements with banks and gave personal guarantees for loans,
thereby maintaining direct involvement in financial dealings. His
leadership role was corroborated by key managerial personnel who
identified him as the decision-maker for strategy, expansion, and
customer relations.
15. The applicant allegedly diverted loan funds for acquisition of
real estate and investments in other group companies, often without
disclosure to lenders. Properties and assets were transferred to
associates at undervalued prices, including disguising prime
residential property as agricultural land and selling valuable corporate
assets for nominal consideration. He concealed assets worth over
₹5,000 crores from the Committee of Creditors during personal
insolvency proceedings. The ED contends that he alienated properties
during the pendency of investigation to frustrate proceedings under the
PMLA. The proceeds of these alienations were allegedly routed
through shell companies and returned in cash.
16. The statutory auditors of flagship and related companies
admitted under Section 50 PMLA to signing financial statements
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without proper audit, acting under instructions from the applicant’s
finance and accounts team. The applicant is alleged to have
orchestrated the diversion of ₹26,956 crores of bank loans through
complex intra-group transactions and inflated related-party deals. He
utilised affiliated companies to route funds, inflate asset values, and
conceal beneficial ownership. Multiple acquisitions and expansions
funded through diverted loan proceeds were kept outside the
disclosure purview to deceive creditors. The investigation portrays
him as the ultimate architect and beneficiary of the Amtek Group’s
large-scale fraud and associated money laundering activities.
Submissions on behalf of the applicant
17. Mr. Pahwa, Learned senior counsel for the applicant submits
that the applicant, a senior citizen aged about 64 years, has already
undergone incarceration for nearly one year prior to cognizance being
taken. It is submitted that investigation qua the applicant stands
concluded as the prosecution complaint was filed on 09.06.2024,
running into hundreds of pages, with relied upon documents exceeding
20,000 pages. However, proceedings under the PMLA cannot
culminate until the trial of the underlying scheduled offences is
concluded, as held by the Supreme Court in V. Senthil Balaji v. ED,
2024 SCC OnLine SC 2626 .In the present case, investigation in
respect of the IDBI FIR is pending, and though a charge sheet has
been filed in the Bank of Maharashtra (BOM) FIR, cognizance is yet
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to be taken. Consequently, there is no likelihood of trial in the
predicate offences commencing in the foreseeable future.
18. It is urged that the applicant had earlier been granted interim
bail by this Court and had scrupulously complied with all conditions
without misuse of liberty. Denial of bail in the present circumstances
would amount to prolonging incarceration in violation of Article 21 of
the Constitution of India. It is further submitted that the proceedings
before the trial court remained stayed for over seven months at the
instance of the ED, which later withdrew its petition. Even as on the
next date before the trial court i.e., 01.08.2025, the applicant would
have been in custody for over a year without cognizance being taken.
Reliance is placed on Manish Sisodia v. ED, 2024 SCC OnLine SC
1920 and a catena of other decisions to submit that the right to speedy
trial and liberty are sacrosanct and prevail over the rigours of Section
45 of the PMLA.
19. Mr. Pahwa, further submits that the applicant is entitled to the
benefit of the first proviso to Section 45 of the PMLA as a ‘sick and
infirm’ person. It is urged that the law is settled that such a person
need not satisfy the twin conditions of Section 45, and the parameters
for bail are confined to the triple test, as held in Kewal Krishan
Kumar v. Directorate of Enforcement 2023 SCC OnLine Del 1547.
The applicant, suffering from multiple life-threatening ailments
including severe weight loss exceeding 23 kilograms, significant
coronary artery disease, a history of perforated intestines, and
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progressive vision impairment requiring cataract surgery, falls
squarely within this category.
20. It is submitted that the applicant’s medical condition has been
acknowledged even by the jail authorities, who have opined that his
co-morbidities are difficult to manage in the jail dispensary. The
applicant has twice been rushed to emergency care during custody and
is incapable of performing routine day-to-day activities. This Court
has earlier recognised his ‘sick and infirm’ status while granting
interim bail on medical grounds, a finding which the ED did not
challenge before the Supreme Court. Reliance is placed on Ashok
Kumar Goel v. Directorate of Enforcement SLP (Crl) 11905 of 2024
and Devki Nandan Garg v. ED 2022 SCC OnLine Del 3086.
21. As regards the ED’s allegations of tampering with evidence, it is
submitted that the same are a belated and unsubstantiated attempt to
prejudice the applicant’s case. These allegations were not raised when
interim bail was granted, nor was cancellation sought on such grounds.
It is well settled, as held in Zahur Haider Zadi v. CBI (2019) 20 SCC
404, that bail cannot be denied on speculative apprehensions, and the
remedy in such cases lies in seeking cancellation if misconduct occurs.
The ED’s reliance on statements recorded under Section 50 of the
PMLA to oppose bail is misplaced, as their probative value can only
be tested at trial, as held in Directorate of Enforcement v. Ratul
Puri2020 SCC OnLine Del 97 and Enforcement Directorate v. Rahil
Hiteshbhai Chovatia2024 SCC Online Del 7002.
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22. Mr. Pahwa points out that in several cases,
including Kalvakuntla Kavitha v. ED SLP (Crl.) No. 10778 of
2024, V. Senthil Balaji (supra), and Ramesh Chandra v. EDBail
Appln. 1913/2022, similar allegations of influencing witnesses or
tampering with evidence were levelled by the ED, yet bail was granted
on account of delay in trial, following the dictum in Manish
Sisodia (supra). It is submitted that any apprehension of influencing
witnesses can be addressed by imposing stringent conditions, as also
observed by the Supreme Court in Manish Sisodia v. ED(supra).
23. Reliance has been placed on Manish Sisodia v. ED (supra),
wherein the Supreme Court held that the right to speedy trial and the
right to liberty are sacrosanct, and that the rigours of Section 45 of the
PMLA must yield to the guarantees under Article 21 of the
Constitution. It has been submitted that the applicant’s case stands on
an even higher footing as cognizance on the ED’s prosecution
complaint is yet to be taken by the learned Trial Court. Reliance was
also placed on Padam Chand Jain v. ED, SLP (Crl.) No. 17476 of
2024, Anwar Dhebar v. ED, Crl. Appeal No. 2669 of
2025, Kalvakuntla Kavitha v. ED SLP (Crl.) No. 10778 of
2024, Arun Pati Tripathi v. ED, SLP (Crl.) No. 16219 of
2024, Sanjay Agarwal v. ED 2022 SCC OnLine SC 1748, Sunil
Dammani v. ED, SLP (Crl.) No. 11755 of 2024, Udhaw Singh v. ED,
SLP (Crl.) No. 18369 of 2024, V. Senthil Balaji v. ED, 2024 SCC
OnLine SC 2626, Amarjeet Sharma v. SFIO, SLP (Crl.) No. 6921 of
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2023, Sadhu Singh Dharamsot v. ED, SLP (Crl.) No. 15826 of
2024, Pankaj Kumar Tewari v. ED, Bail Appln. 3210 of 2024
and Chandra Prakash Khandelwal v. ED, Bail Appln. 2470 of 2022.
24. Lastly, it is contended that the ED has sought to project the
applicant as the beneficiary of an alleged large-scale fraud by relying
on figures from a PIL activist without conducting an independent
investigation. Further, the arrest was sought to be justified on a
misinterpretation of a Supreme Court order which merely directed
investigation and not arrest. Subsequent orders of the Supreme Court
dated 13.08.2024 and 13.12.2024 clarified that no findings on merits
were rendered. It is thus urged that, in view of the settled legal
position, the applicant’s prolonged incarceration, his recognised
medical infirmities, and the absence of any real possibility of trial
commencing in the near future, this Court may be pleased to enlarge
the applicant on regular bail.
Submissions on behalf of the ED / respondent
25. Mr. Hossain, learned Special Counsel & Mr. Gurnani, learned
Panel Counsel for the Directorate of Enforcement (“ED”), at the
outset, submitted that an accused who elects not to address the merits
of the case or to satisfy the mandatory twin conditions under Section
45 of the Prevention of Money Laundering Act, 2002 (“PMLA”), does
so at his own peril. Such conduct neither restrains the prosecution
from placing on record the gravity of the offence nor precludes the
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Court from independently considering both the mandatory twin
conditions and the seriousness of the alleged offence.
26. It is submitted that the present case emanates from directions of
the Supreme Court in Jaskaran Singh Chawla v. Union of India, W.P.
(Crl.) No. 246 of 2022, which noticed a massive bank fraud of
₹27,000 crores. In the instant matter, the total outstanding bank dues
stand at ₹38,760 crores, making it one of independent India’s largest
bank frauds. The petitioner’s proposed resolution plan in insolvency
proceedings envisaged payment of only ₹35 crores, a recovery of
merely 0.09%, resulting in an unprecedented 99.91% haircut to
creditors. A coordinate Bench of this Court, while rejecting the
petitioner’s challenge to arrest, recorded detailed observations on the
large-scale diversion of public funds, operation of numerous shell
companies, manipulation of corporate accounts, and the petitioner’s
inability to repay despite personal guarantees.
27. Investigation has revealed that the petitioner was the ultimate
beneficial owner of the fraud, which was executed through
manipulation of financial records, overstating assets and profits by
over ₹15,000 crores, creating fictitious sales and purchases, floating
more than 500 shell companies, and installing dummy directors.
Statements of key managerial personnel and statutory auditors indicate
that these activities were undertaken under the petitioner’s
instructions. The scale and method of the alleged fraud, it is submitted,
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disentitle the petitioner from seeking any exemption from the rigours
of Section 45 of the PMLA.
28. On the plea of prolonged incarceration, learned Counsels for the
Enforcement Directorate urged that the mere passage of time, in this
case one year, cannot be the sole ground for bail in serious economic
offences involving defalcation of public money. There exists no
universal rule that a certain period of custody automatically confers
entitlement to bail. Reference is made to Anil Kumar Aggarwal v. ED,
2025 SCC OnLine Del 2216, and to the decision in Manish Sisodia
vs. CBI 2023 SCC OnLine SC 1393, where the Supreme Court
clarified that long incarceration may be relevant but depends on the
nature of the allegations, carving out exceptions for large-scale frauds
affecting thousands of depositors, a category into which the present
case squarely falls.
29. It s further submitted that the petitioner’s reliance on V. Senthil
Balaji (supra) and Union of India v. K. A. Najeeb(2021) 3 SCC 317 is
misplaced. In Senthil Balaji (supra), the multiplicity of accused and
witnesses rendered early trial completion impossible, in contrast, here
there are only 16 accused (10 of which are companies under
petitioner’s control) and 58 witnesses. K.A. Najeeb (supra) concerned
an accused incarcerated for over five years in a case carrying a
maximum sentence of eight years, applying that precedent to serious
economic offences under the PMLA after only a year in custody would
dilute the statutory safeguards. The principle in State of Bihar & Anr
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v. Amit Kumar(2017) 13 SCC 751, approved in Vijay Madanlal
Choudhary and ors v. UOI SLP (Crl) no. 4634/2014, is invoked to
submit that seriousness of economic offences outweighs the mere fact
of prolonged custody.
30. It is further submitted that the petitioner fails even the “triple
test” applicable under Section 439 CrPC read with Section 45(2)
PMLA. His conduct demonstrates an ability and willingness to
obstruct justice: (a) instructing a key witness, who is also a relative
and a dummy director, not to cooperate with the investigation, (b)
dissipating proceeds of crime through undervalued sales of immovable
properties, including 100 acres of land sold for ₹90 crores despite a
market value exceeding ₹500 crores, immediately after ED search
operations and (c) alienating attached properties in contravention of
statutory prohibitions. Funds from such sales were allegedly routed
through shell companies and received back in cash. These acts, it is
urged, place the petitioner within the exception noted in Senthil
Balaji (supra) for cases where antecedents indicate a threat to society
if released on bail.
31. On medical grounds, learned counsels for the ED submitted that
the AIIMS Medical Board report dated 06.03.2025 found no
requirement for overnight hospitalisation, recommending only an
elective day-care coronary angiography. Interim bail granted for
medical reasons was extended twice, but further extension was
declined by this Court on 01.04.2025 for want of urgency. The
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Supreme Court, vide order dated 07.04.2025, declined to extend
interim bail and directed the applicant to surrender. No fresh medical
evidence has since been produced, rendering the present medical plea
unsustainable.
32. It is lastly urged that the ground of delay in cognizance, now
pressed by the petitioner, was already raised and effectively rejected
before the Supreme Court in SLP (Crl.) No. 8997/2025, which was
withdrawn after the Bench indicated disinclination to grant relief. In
light of the gravity of the offence, the petitioner’s conduct, failure to
satisfy both the twin conditions under Section 45(1) PMLA and the
triple test under Section 45(2) read with Section 439 CrPC, and the
absence of any new medical exigency, the ED prays that the present
bail application be dismissed.
Analysis and Conclusion:
33. This Court has carefully considered the submissions of learned
senior counsel for the applicant and learned counsels for the
Directorate of Enforcement (“ED”), along with the voluminous record
placed before it. The allegations in the present case pertain to one of
the largest economic offences investigated in the country, involving an
alleged diversion and laundering of over ₹26,000 crores. The ED’s
case is that the applicant, as promoter and controlling mind of the
Amtek Group, orchestrated a complex scheme of siphoning public
funds through hundreds of shell entities and falsified financial
reporting. The magnitude of the alleged fraud is staggering and has
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caused colossal losses to public sector banks. Such offences, if proved,
undermine the very foundation of the nation’s financial system. The
Court is mindful that the gravity of the charge is a primary
consideration in bail adjudication.
34. The Supreme Court has consistently held that economic
offences constitute a distinct class and must be viewed seriously. In
State of Gujarat v. Mohanlal Jitamalji Porwal (1987) 2 SCC 364, it
was observed that economic offences have far-reaching consequences
on the community and must be visited with a different approach in
matters of bail. Similarly, in Nimmagadda Prasad v. CBI(2013) 7
SCC 466, the Court held that these offences involve deep-rooted
conspiracies and huge loss to the public exchequer, thereby warranting
stringent treatment. The present allegations fit squarely within these
judicially recognised principles. When public funds are siphoned off
on such a scale, the damage is not merely financial but erodes public
confidence in banking institutions. This consideration weighs heavily
against the grant of bail.
35. The applicant invokes the first proviso to Section 45 of the
PMLA on the ground of being a “sick and infirm” person. However,
being “sick and infirm” is not an automatic passport to bail in serious
economic offences. A perusal of order dated 01.04.2025 reveals that
discharge summaries from both hospitals indicated that petitioner was
suffering from non-critical CAD, which was a stable condition and did
not require any specialised treatment available at jail referral hospitals
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or AIIMS; the prescribed course of treatment had already been advised
by the attending doctors, and therefore the petitioner’s health could be
adequately managed in custody, necessitating no special
arrangements, leading to the rejection of the request for extension of
interim bail. Vide report dated 06.03.2025, the AIIMS Medical Board
informed this Court that the petitioner had non-obstructive coronary
artery disease as per CT coronary angiography and, in view of
worsening angina, required elective Coronary Angiography (CAG),
which is a day-care procedure not requiring overnight admission, with
further medical course to be determined based on the CAG findings,
which may or may not necessitate further intervention.
36. The applicant’s medical condition, though concerning, can be
managed in custody, where prison authorities are obligated to provide
adequate treatment, including referral to specialised hospitals if
required. Illness warrants bail only when custodial treatment is clearly
inadequate, which is not established in this case. Therefore, the
medical plea cannot override the gravity of the offence, societal
interest, and the statutory rigour governing such matters.
37. In this case, the Court is not satisfied that there are reasonable
grounds to believe the applicant is not guilty. This is fatal to the bail
plea. The Supreme Court in Rohit Tandon v. Directorate of
Enforcement (2018) 11 SCC 46 clarified that economic offences
involving deep-rooted conspiracies and loss of public funds are grave
and must be viewed seriously, and when proceeds of crime are
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projected as untainted, the burden under Section 24 of the PMLA
shifts to the accused. At the bail stage, the court need not conclusively
determine guilt but must assess broad probabilities, including the
accused’s mens rea and the likelihood of reoffending. The relevant
para reads thus:
“21. The consistent view taken by this Court is that economic
offences having deep-rooted conspiracies and involving huge loss
of public funds need to be viewed seriously and considered as
grave offences affecting the economy of the country as a whole and
thereby posing serious threat to the financial health of the country.
Further, when attempt is made to project the proceeds of crime as
untainted money and also that the allegations may not ultimately be
established, but having been made, the burden of proof that the
monies were not the proceeds of crime and were not, therefore,
tainted shifts on the accused persons under Section 24 of the 2002
Act.
22. It is not necessary to multiply the authorities on the sweep of
Section 45 of the 2002 Act which, as aforementioned, is no more
res integra. The decision in Ranjitsing Brahmajeetsing Sharma v.
State of Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State
of Maharashtra, (2005) 5 SCC 294 : (2005) SCC (Cri) 1057] and
State of Maharashtra v. Vishwanath Maranna Shetty [State of
Maharashtra v. Vishwanath Maranna Shetty, (2012) 10 SCC 561 :
(2013) 1 SCC (Cri) 105] dealt with an analogous provision in
the Maharashtra Control of Organised Crime Act, 1999. It has
been expounded that the Court at the stage of considering the
application for grant of bail, shall consider the question from the
angle as to whether the accused was possessed of the requisite
mens rea. The Court is not required to record a positive finding
that the accused had not committed an offence under the Act. The
Court ought to maintain a delicate balance between a judgment of
acquittal and conviction and an order granting bail much before
commencement of trial. 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. Further, the Court is required to
record a finding as to the possibility of the accused committing a
crime which is an offence under the Act after grant of bail.”
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38. The ED has placed on record materials suggesting the
applicant’s active role in manipulation of accounts, overstatement of
fixed assets, and routing of funds through more than 500 entities.
These are not isolated or spontaneous acts but appear to be part of a
deliberate and sustained criminal design over years. Such conduct, if
established, would exemplify the sophisticated nature of economic
crime requiring robust law enforcement response. The Supreme Court
in Vijay Madanlal Choudhary v. Union of India (supra) recognised
the societal harm posed by money laundering and endorsed the
legislature’s intent to impose stringent bail conditions. This Court is
bound to apply the statutory twin conditions under Section 45 of the
PMLA. On the material presently available, those conditions are not
satisfied.
39. The stage of trial is also a significant consideration. The
prosecution complaint has been filed, but cognizance in the predicate
offences is yet to be taken. The trial in the PMLA case is thus at a
nascent stage. In State of Bihar v. Amit Kumar (supra), the Supreme
Court held that in cases involving economic offences of large
magnitude, early release on bail can prejudice the trial and erode
public confidence in the justice system. Here, releasing the applicant
at this stage may embolden similar conduct in other cases of public
fund diversion. Given the enormity and complexity of the case,
custody is justified until the trial reaches a more advanced stage.
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40. The applicant’s reliance on Manish Sisodia v. ED, (supra), and
Union of India v. K.A. Najeeb (supra), is misplaced in the present
context. Those cases turned on prolonged incarceration without trial
progress in circumstances where the offences, though serious, did not
involve the magnitude and complexity found here. Moreover, in
K.A.Najeeb (supra), the accused had been in custody for over five
years, here, the custody is just about one year. The scale of harm
caused to the banking system and the potential influence the applicant
wields over witnesses distinguish this case from those precedents. The
principle that liberty must yield to societal interest in such cases is
well recognised. This is one such case.
41. Law is well settled that detailed examination of evidence and
elaborate discussion on merits of the case need not be undertaken for
grant of bail. The Court has to indicate in the bail order, reasons for
prima facie conclusion why bail was being granted, particularly, when
the accused is charged of having committed a serious offence.
42. In the case of Kalyan Chandra Sarkar v. Rajesh Ranjan alias
Pappu Yadav 2004 SCC (Cri) 1977, it was held as follows:
“11….The Court granting bail should exercise its discretion in a
judicious manner and not as a matter of course. Though at the
stage of granting bail, a detailed examination of evidence and
elaborate documentation of the merit of the case need not be
undertaken, there is a need to indicate in such orders reasons for
prima facie concluding why bail was being granted particularly
where the accused is charged of having committed a serious
offence. Any order devoid of such reasons would suffer from non-
application of mind. It is also necessary for the Court to consider
among other circumstances, the following factors also before
granting bail:
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(a) The nature of accusation and the severity of punishment in case
of conviction and the nature of supporting evidence.
(b) Reasonable apprehension of tampering with the witness or
apprehension of threat to the complainant.
(c) Prima facie satisfaction of the Court in support of the charge.”
43. In the case of Ram Govind Upadhyay v. Sudarshan Singh
2002 SCC (Cri) 688, it is held as follows:–
“3. Grant of bail though being a discretionary order but, however,
calls for exercise of such discretion in a judicious manner and not
as a matter of course. Order of bail bereft of any cogent reason
cannot be sustained. Needless to record, however, that the grant of
bail is depended upon the contextual facts of the matter being dealt
with by the court and facts, however, do always vary from case to
case. While placement of the accused in the society, though may be
considered but that by itself cannot be a guiding factor in the
matter of grant of bail and the same should and ought always to be
coupled with other circumstances warranting the grant of bail. The
nature of the offence is one of the basic considerations for the grant
of bail. More heinous is the crime, the greater is the chance of
rejection of the bail, though, however, depending on the factual
matrix of the matter.”
44. In the case of Prahalad Singh Bhati v. NCT, Delhi 2001 SCC
(Cri) 674, it is held as follows:–
“8…..While granting the bail, the Court has to keep in mind the
nature of accusations, the nature of evidence in support thereof, the
severity of the punishment which conviction will entail, the
character, behaviour, means and standing of the accused,
circumstances which are peculiar to the accused, reasonable
possibility of securing the presence of the accused at the trial,
reasonable apprehension of the witnesses being tampered with, the
larger interests of the public or state and similar other
considerations”
45. In the case of Sanjay Chandra v. CBI(2012) 1 SCC 40 : AIR
2012 SC 830, it is held as follows:–
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“25………It is, no doubt, true that the nature of the charge may be
relevant, but at the same time, the punishment to which the party
may be liable, if convicted, also bears upon the issue. Therefore, in
determining whether to grant bail, both the seriousness of the
charge and the severity of the punishment should be taken into
consideration. The grant or refusal to grant bail lies within the
discretion of the Court. The grant or denial is regulated, to a large
extent, by the facts and circumstances of each particular case. But
at the same time, right to bail is not to be denied merely because of
the sentiments of the community against the accused. The primary
purposes of bail in a criminal case are to relieve the accused of
imprisonment, to relieve the State of the burden of keeping him,
pending the trial, and at the same time, to keep the accused
constructively in the custody of the Court, whether before or after
conviction, to assure that he will submit to the jurisdiction of the
Court and be in attendance thereon whenever his presence is
required”.
46. The ED’s apprehension of tampering with evidence is supported
by specific instances alleged, including sale of undervalued properties
post-search operations and instructions to witnesses not to cooperate.
These are not speculative fears but stem from actual investigative
findings. In Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439, the
Supreme Court cautioned that in cases involving powerful economic
offenders, there is a real risk of witness influence and evidence
tampering. The relevant para is extracted below:-
“34. Economic offences constitute a class apart and need to be
visited with a different approach in the matter of bail. The
economic offence having deep-rooted conspiracies and involving
huge loss of public funds need to be viewed seriously and
considered as grave offences affecting the economy of the country
as a whole and thereby posing serious threat to the financial health
of the country.
35. While granting bail, the Court has to keep in mind the nature of
accusations, the nature of evidence in support thereof, the severity
of the punishment which conviction will entail, the character of thePage 24 of 29
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accused, circumstances which are peculiar to the accused,
reasonable possibility of securing the presence of the accused at the
trial, reasonable apprehension of the witnesses being tampered
with, the larger interests of public/State and other similar
considerations.”
47. In case of Mohan Lal Jitamalji Porwal (supra), it is held as
follows:
“5…….The entire community is aggrieved if the economic
offenders who ruin the economy of the State are not brought to
book. A murder may be committed in the heat of moment upon
passions being aroused. An economic offence is committed with
cool calculation and deliberate design with an eye on personal
profit regardless of the consequence to the Community. A disregard
for the interest of the community can be manifested only at the cost
of forfeiting the trust and faith of the community in the system to
administer justice in an even-handed manner without fear of
criticism from the quarters which view white colour crimes with a
permissive eye unmindful of the damage done to the National
Economy and National Interest”.
48. The applicant’s position as the central figure in the alleged fraud
enhances this risk. The Court cannot ignore the likelihood of
interference with the investigation and trial if bail is granted.
Continued custody is therefore warranted.
49. The principle that economic offences warrant stringent
treatment in bail matters is not absolute, however, in cases involving
large-scale diversion of public funds the gravity of the offences
assumes overriding significance. Given the serious repercussions for
the economy and the banking sector, such offences undermine public
confidence and harm depositors and creditors. Granting bail too
liberally in such matters risks sending a counterproductive signal.
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50. The Court has also considered the argument that the applicant
has been cooperating with the investigation and has complied with
earlier interim bail conditions. Cooperation alone does not diminish
the gravity of the offence or negate the risks identified.
51. The Court notes that the alleged proceeds of crime far exceed
any recovery secured through insolvency proceedings. The applicant’s
proposed resolution plan, envisaging payment of only ₹35 crores
against dues of over thousands of crores, reflects a near-total haircut to
creditors. This underscores the irreparable nature of the alleged loss to
the public exchequer. In such circumstances, premature release risks
undermining efforts to secure accountability. The Supreme Court has
repeatedly cautioned against leniency in cases involving massive
public fund defalcation. That caution must be heeded here.
52. With the advancement of technology and Artificial Intelligence,
economic offences such as money laundering have emerged as a
serious threat to the financial system of the country. These offences
pose a significant challenge for investigating agencies, given the
complex and intricate nature of the transactions and the involvement
of multiple actors. A meticulous and thorough investigation is essential
to ensure that innocent persons are not wrongfully implicated and that
the actual offenders are brought to justice.
53. In Anwar Dhebar v. State of Chhattisgarh MCRC No. 3455 of
2024, the Chhattisgarh High Court rejected the bail application on the
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ground that the offence involved grave economic irregularities, deep-
rooted conspiracy, and substantial loss to the State exchequer. The
Court emphasized that while considering bail in such matters, the
gravity of the offence, the seriousness of the allegations, and the
prescribed punishment must be considered in addition to the standard
triple test. This reasoning was upheld by the Supreme Court on
14.07.2025. Notably, the financial magnitude of the offences involved
in Anwar Dhebar (supra) was significantly lesser than that in the
present case. The present applicant stands charged under Sections
120B IPC read with Sections 420 and 409 IPC, and Section 7(c) of the
Prevention of Corruption Act, 1988 (as amended), in FIR No.
RC2202022E0019. Furthermore, the applicant is also facing
prosecution under Sections 120B read with 420, 406, 468 IPC and
Sections 13(2) read with 13(1)(d) of the PC Act in FIR No.
RC2232022A0009, involving an alleged siphoning of funds in one of
the largest bank frauds, with total outstanding bank dues amounting to
₹38,760 crores.
54. The argument that trial delay justifies bail does not hold in this
factual setting. The complexity of the case, the multiplicity of
transactions, and the layered corporate structures necessarily entail a
protracted trial. The applicant’s continued custody, in such
circumstances, is not an arbitrary deprivation of liberty but a necessary
measure to preserve the integrity of the process. In Amit Kumar
(supra), the Supreme Court upheld denial of bail despite trial delay in
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a large-scale examination scam, emphasising the need to protect the
process from subversion. The same rationale applies here. Delay, in
such cases, is a function of complexity, not prosecutorial inertia.
55. It is also relevant that the ED‘s case is founded not on mere
suspicion but on extensive documentary evidence, forensic audits, and
statements recorded under Section 50 of the PMLA. These materials
prima facie implicate the applicant in the alleged money laundering
scheme. While the defence may challenge their admissibility and
credibility at trial, at the bail stage they cannot be ignored. The
statutory presumption under Section 24 of the PMLA operates against
the accused, requiring him to rebut the inference of guilt. The
applicant has not discharged that burden.
56. The Applicant was arrested by the Respondent Agency on
09.07.2024. Subsequently, on 07.09.2024 the Respondent Agency
filed a Prosecution Complaint against 16 proposed accused persons
before the Ld. Special Judge, Rouse Avenue District Court, New
Delhi. The applicant has been in and out on interim bail since
11.03.2025 to 01.04.2025.
57. The Court is conscious of its duty to strike a balance between
individual liberty and the larger societal interest. In economic offences
of this nature, the latter assumes enhanced significance. Granting bail
at this juncture would risk compromising both the trial and public
confidence in the justice system. The seriousness of the charge, the
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weight of the evidence, and the statutory scheme all point in one
direction. The applicant has not shown circumstances exceptional
enough to justify departure from that path. Continued custody is thus
warranted.
58. In conclusion, this Court finds that the allegations against the
applicant pertain to an economic offence of exceptional magnitude,
involving complex, deliberate, and sustained criminal conduct causing
grave loss to public sector banks. Such offences erode the fabric of
economic governance and public trust and cannot be taken lightly.
While the applicant may be ailing, adequate medical care can be
provided in custody under judicial supervision. The trial is at a nascent
stage, and the statutory conditions under Section 45 of the PMLA are
not satisfied. On a cumulative assessment of all factors, this Court
finds no ground to grant bail. The application is accordingly
dismissed.
59. It is clarified that any observation made in this order, is for the
purpose of adjudication of the bail application only and shall not
tantamount to an expression on the merits of the case.
RAVINDER DUDEJA, J.
AUGUST 19, 2025/na
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