Telangana High Court
Boodati Laxminarayana vs The Directorate Of Enforcement on 16 April, 2025
THE HONOURABLE SRI JUSTICE J. SREENIVAS RAO
CRIMINAL PETITION No. 2530 of 2025
ORDER:
This Criminal Petition has been filed under Sections 480
and 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023
(BNSS) by the petitioner seeking bail in
ECIR/HYZO/42/2022 on the file of the Directorate of
Enforcement, Hyderabad.
2. The instant case originates from Crime No.158 of 2022
registered on 01.08.2022 at the Central Crime Station Police
Station, Hyderabad, against M/s. Sahiti Infratech Venture
India Private Limited, its Managing Director i.e., the
petitioner herein, and others, for the offences under Sections
406 and 420 of the Indian Penal Code, 1960 (hereinafter
referred to, as ‘IPC‘). The said crime was instituted basing
on a complaint lodged by Mr. M. Yashwanth Kumar, who
purported to be a home buyer. Subsequent to the
registration of crime, the provisions of Section 120-B of the
IPC and Section 3 and 5 of the Telangana Protection of
Depositors of Financial Establishments Act, 1999
(hereinafter referred to, as ‘TPDFE Act’) were incorporated
2
into the case. The petitioner made as accused No.1 in the
aforementioned crime.
3. Heard Sri D.V Seetharam Murthy, learned Senior
Counsel representing Sri Pratheek Reddy, learned counsel
for the petitioner, and Sri D. Narender Naik, learned
Standing Counsel for Directorate of Enforcement appearing
on behalf of the respondent.
4. Learned Senior Counsel submitted that basing on the
complaint lodged by one M. Yashwanth Kumar, Crime
No.158 of 2022 was registered by the Central Crime Station,
Detective Department, Hyderabad, against M/s. Sahiti
Infratec Ventures India Private Limited (for short, ‘the
Company’), Managing Director of the Company i.e., petitioner
herein and others, for the offences under Sections 406 and
420 of the Indian Penal Code, 1860 (hereinafter referred to,
as ‘IPC‘) and subsequently, Sections 120-B of the IPC and
Sections 3 and 5 of the TPDFE Act were added. Thereafter,
on 11.08.2022, under the Prevention of Money Laundering
Act, 2022 (hereinafter referred to, as ‘PMLA’), an
Enforcement Case Information Report was registered, vide
ECIR/HYZO/42/2022 for the offences under Sections 3 and
3
4 of the PMLA against the Company, petitioner and others.
On 12.08.2022, the Police, Central Crime Station, D.D.,
Hyderabad, conducted a search and seized all the
documents pertaining to the details of the projects
undertaken by the Company. Basing on the other similar
complaints made in the various police stations, First
Information Reports were filed against the Company, the
petitioner and others. The respondent issued summons to
the petitioner and his statements were recorded on
31.10.2022, 01.11.2022 and 02.11.2022. The petitioner was
arrested by the Police of Central Crime Station, D.D.,
Hyderabad, in respect of Crime No.158 of 2022 on
01.12.2022 and he was in judicial custody till 31.01.2023.
Thereafter, on 01.04.2023, the respondent conducted
another search in the Company office as well as the
residence of certain persons under Section 17(1A) of the
PMLA and seized the material and also collected the
documents pertaining to the case from the Central Crime
Station, D.D., Hyderabad. The respondent also seized the
bank accounts belonging to the Company, the petitioner and
also other directors of the Company. On 20.12.2023, the
provisional attachment was issued under Section 5 of the
4
PMLA attaching movable and immovable properties worth of
Rs.161.50 Crores belongs to the Company, the petitioner
and his family members. The petitioner was arrested on
29.09.2024 in connection with ECIR/HYZO/42/2022 dated
11.08.2022 and he has been in judicial custody since
30.09.2024.
4.1. He further submitted that the statements of the
petitioner were recorded and the entire material was seized
along with the bank accounts of the Company as well as the
petitioner and other family members. The petitioner’s
passport was also seized. Hence, the possibility of tampering
with evidence and also influencing the witnesses does not
arise.
4.2. Even according to the complaint of the respondent, the
investigation is under progress, due to which, the final report
has not been filed within the statutory period. As per the
provisions of Section 167(2) of the Code of Criminal
Procedure, 1973 (hereinafter referred to, as ‘Cr.P.C.’), if the
final report is not filed within the stipulated time, the
petitioner is entitled for grant of statutory bail.
5
4.3. He further submitted that the petitioner or his
Company is currently not engaging in any business
operations and there is no scope of resuming the operations
in the near future. Hence, there is no requirement of
continuing incarceration of the petitioner.
4.4. According to the prosecution, the investigation with
respect to the petitioner herein has been completed. Even as
per the counter-affidavit of the respondent, the purported
justification for the continued incarceration of the petitioner
would show that the respondent is effectively trying to split
up the investigation to the detriment of the liberty of the
petitioner and the same is violative of Article 21 of the
Constitution of India.
4.5. He further submitted that the respondent filed an
application vide Crl.M.P.No.906 of 2025 in S.C.No.888 of
2024 on the file of the Metropolitan Sessions Judge,
Hyderabad, invoking the provision of Section 50 of the PMLA
seeking permission to record the statement of the petitioner,
who is in judicial custody, and the said application was
allowed on 05.03.2025 permitting the
respondent/Investigating Officers to examine and record the
6
statement of the petitioner for two (2) days before the prison
authorities i.e., Central Prison, Chanchalguda, Hyderabad.
Hence, there is no requirement of further investigation. The
petitioner is ready and willing to cooperate with further
investigation, if any, and all subsequent proceedings, and he
is entitled for grant of bail.
4.6. In support of his contention, he relied upon the following
judgments reads as follows:
2. V. Senthil Balaji v. Deputy Director,
Directorate of Enforcement 2,
3. Prem Prakash v. Union of India through
the Directorate of Enforcement 3,
5. Per contra, learned Special Public Prosecutor submitted
that the petitioner has committed grave offence and received
huge amount of more than 800 Crores from the innocent
persons for the purpose of construction of world class
residential gated community comprising of 32 floors and 10
1
(2022) 2 ALD (Cri.) 404
2
2024 SCC OnLine SC 2626
3
(2024) 9 SCC 787
4
(2025) 2 SCC 248
7towers in an extent of approximately 23 acres in Sy.Nos.343/8,
343/9, 343/11, 343/12 and 343/13 of Ameenpur Village and
Mandal, Sangareddy District. However, the Company failed to
acquire the necessary land and obtain various permissions
required from the concerned authorities for construction.
Thus, the Company had failed to deliver the flats or refunded
the amount to the customers and defrauded them for their
hard-earned money.
5.1. He further submitted that basing on the complaint lodged
by one Mr. Yashwanth Kumar, Crime No.158 of 2022 was
registered and subsequently, 56 F.I.Rs. were registered against
the Company, petitioner and others, wherein hundreds of
buyers/complainants of different projects undertaken by the
Company and other group firms and companies were defrauded
of a cumulative amount of more than Rs.300 Crores under the
pretext of delivery of flats/villas, but failed to do so. As per the
provisions of Section 3 of the PMLA and Sections 406 and 420
of the IPC are applicable to the petitioner and as per the
provisions of Section 45 of the PMLA, the petitioner is not
entitled for grant of bail.
5.2. He also submitted that on 14.10.2022, the Investigating
Officers issued summons for recording the statement of the
8
petitioner under Section 50(2) and (3) of the PMLA and on
31.10.2022, 01.11.2022 and 02.11.2022, during the course of
recording the statement of the petitioner, undertook to submit
information and documents as sought by the Investigating
Officer. The petitioner is a very influential person. When the
petitioner was E.D. custody on 17.10.2024, the petitioner was
found in illegal possession of one mobile phone, without
obtaining any permission from the Court or the custodian.
Accordingly, the mobile phone possessed by the petitioner was
impounded under Section 50(5) of the PMLA, through the
Impounding Order dated 17.10.2024. However, instead of
appearing before the Investigating Officer to submit requisite
information, the petitioner submitted a fake medical certificate
on 18.11.2022. The Investigating Officers have given number
of opportunities through summons dated 05.04.2023,
12.05.2023, 26.05.2023, 17.08.2023 and 10.09.2024, but he
remained evasive and failed to appear before the Investigating
Officer and not produced the requisite information. When the
respondent/Investigating Officers enquired about the medical
certificate produced by the petitioner through the concerned
Medical Officer, who categorically denied and stated that he has
not treated the petitioner and not issued the medical certificate,
which was produced by the petitioner, and the said medical
9
certificate was a forged and fabricated one and the petitioner is
absconding.
5.3. Similarly, the petitioner’s family members, namely his son
Boodati Satwik and his wife Parvathi, were also summoned on
multiple occasions. However, they appeared on one occasion
on 05.06.2023 and recorded their statements under Section 50
of the PMLA. During the course of investigation, most of the
questions posed by the Investigating Officers, they remained
evasive and undertook to submit documents and information
within three days. However, they failed to provide the requisite
documents and information and subsequently remained
absconding.
5.4. He further submitted that the petitioner has collected
huge amount of Rs.800 Crores, however, the attachment of
proceeds of crime to the tune of Rs.161.50 Crores has been
done so far and the actual quantum of fraud committed by the
petitioner is much bigger than the attachment and further
investigation to quantify the remaining proceeds of crime and to
attach the same is under progress. The investigation
conducted by the respondent has revealed the details of
additional proceeds of crime concealed by the petitioner,
despite in the judicial custody.
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5.5. He further submitted that subsequent to filing of the
prosecution complaint on 05.11.2024, the investigation
conducted by the respondent has revealed that the petitioner
continues to be involved in activities related to proceeds of
crime. Though the petitioner is in judicial custody, acting on
his instructions, the proceeds of crime were transferred to the
bank account of his daughter-in-law, who subsequently
withdrew the proceeds of crime in cash and handed it to a
person of the petitioner. The investigation established that the
petitioner, despite being in judicial custody, actively engaged in
laundering the proceeds of the crime. Considering the conduct
of the petitioner, if he is granted bail, he will dissipate the
laundered proceeds of crime.
5.6. He further submitted that the son of the petitioner,
namely Boodati Sathwik, approached this Court and filed
Crl.P.No.13817 of 2024 for grant of anticipatory bail in the
above said crime. This Court on 13.12.2024 dismissed the said
application by giving cogent reasons. In spite of issuing
summons, the petitioner and his wife as well as his son are not
cooperating with the investigation and they are absconding.
5.7. He further submitted that the respondent filed the
complaint within the statutory period of limitation as per the
11
provisions of the PMLA. Hence, the petitioner is not entitled for
grant of statutory bail and the judgment, which was relied
upon by the learned Senior Counsel for the petitioner, in
C. Parthasarthy supra is not applicable to the facts and
circumstances of the present case.
5.8. He further submitted that as per the provisions of sub-
section (ii) of Section 45(1) of the PMLA, the petitioner is not
entitled for grant of bail basing upon his conduct and the
petitioner has committed grave offence and collected huge
amount from the innocent persons to a tune of Rs.800 Crores
and the same amounts to money laundering as per the
provisions of the PMLA and the petitioner is not entitled for
grant of bail.
5.9. In support of his contention, he relied upon the judgment
of the Hon’ble Supreme Court in The Union of India, through
the Assistant Director v. Kanhaiya Prasad 5.
6. Having considered the rival submissions made by the
respective parties and after perusal of the material available on
record, it reveals that on 01.08.2022, one Mr. M. Yashwanth
Kumar lodged a complaint against the M/s. Sahiti Infratec
5
2025 SCC OnLine SC 306
12
Ventures India Private Limited, the petitioner, who is the
Managing Director of the said Company, and others, and the
Central Crime Station, Detective Department, Hyderabad,
registered the case for the offences under Sections 406 and 420
of the IPC and subsequently, Sections 120-B of the IPC and
Sections 3 and 5 of the Telangana Protection of Depositors of
Financial Establishments Act, 1999, were added. The
Company advertised a pre-launch offer in social media for
construction of world class residential gated community
comprising of 32 floors and 10 towers in an extent of
approximately 23 acres in Sy.Nos.343/8, 343/9, 343/11,
343/12 and 343/13 of Ameenpur Village and Mandal,
Sangareddy District. Pursuant to the same, the complainant as
well as 240 other customers paid an amount of
Rs.72,81,98,000/- to the Company. However, the Company
failed to acquire the necessary land and obtain various
permissions required from the concerned authorities and thus
the Company had failed to deliver the flats to the customers
and also failed to refund the money and cheated them for their
hard earned money. The record further reveals that against the
above said Company as well as the petitioner and others, more
than 56 cases were registered. Subsequently, the respondent
initiated proceedings exercising the powers conferred under the
13
provisions of the PMLA and conducted investigation on the
complaint dated 11.08.2022 and the same was registered as
ECIR/HYZO/42/2022 for the offences punishable under
Sections 3 and 4 of the PMLA against the Company, the
petitioner and other persons. The record further reveals that
during the course of investigation, on 12.08.2022, the
Investigating Officers seized the documents from the office of
the Company and also recorded the statements of the petitioner
on 31.10.2022, 01.11.2022 and 02.11.2022. During the course
of investigation, the respondent came to know that the
petitioner has collected huge amount ie., more than 800
Crores, under the guise of construction of residential gated
community, however, they attached only Rs.161.50 Crores of
proceeds of crime. The petitioner has not cooperating with the
investigation. The record further reveals that the Investigating
Officers have issued summons on 05.04.2023, 12.05.2023,
26.05.2023, 17.08.2023 and 10.09.2024 to appear before them
and submit requisite information/documents, however, the
petitioner produced the medical certificate through e-mail dated
18.11.2022 issued by the Doctor and sought time. When the
Investigating Officers enquired the Doctor, who specifically
stated that he has not treated the petitioner and has not issued
the said medical certificate. According to the Investigating
14
Officers, the medical certificate produced by the petitioner is a
forged and fabricated one.
7. The record further reveals that the son of the petitioner
was made an accused No.5 in the said crime. The Investigating
Officers have issued summons to the wife and son of the
petitioner to appear before them for recording their statements
as well as the production of the document, however, they
appeared only on one occasion i.e., on 05.06.2023, and
subsequently, according to the Investigating Officer, they are
not cooperating with the investigation and absconded.
8. Insofar as the contention raised by the learned Senior
Counsel for the petitioner that the investigation is not
completed and they have not filed final report within the
stipulated time and as per the provisions of Section 167 of the
Cr.P.C., the petitioner is entitled for the benefit of grant of
statutory bail is concerned, the record reveals that the
Investigating Officers after completing investigation filed
complaint in ECIR/HYZO/42/2022 on 05.11.2024 before the
Sessions Judge, Hyderabad, and the same was taken
cognizance on 04.12.2024 and numbered as S.C.No.888 of
2024. Even according to the parties, the matter is coming up
for framing of charges. Hence, this Court is of the considered
15
view that the petitioner is not entitled to seek benefit under the
provisions of Section 167 of Cr.P.C. for grant of statutory bail.
9. It is relevant to extract the provision of Section 167 (2) of
the Cr.P.C.
167. Procedure when investigation cannot be completed in
twenty-four hours.–
(1) xxx xxx xxx
(2) The Magistrate to whom an accused person is forwarded under
this section may, whether he has or has not jurisdiction to try the
case, from time to time, authorise the detention of the accused in
such custody as such Magistrate thinks fit, for a term not
exceeding fifteen days in the whole; and if he has no jurisdiction
to try the case or commit it for trial, and considers further
detention unnecessary, he may order the accused to be forwarded
to a Magistrate having such jurisdiction:
Provided that–
(a) the Magistrate may authorise the detention of the accused
person, otherwise than in the custody of the police, beyond the
period of fifteen days, if he is satisfied that adequate grounds
exist for doing so, but no Magistrate shall authorise the detention
of the accused person in custody under this paragraph for a total
period exceeding,–
(i) ninety days, where the investigation relates to an offence
punishable with death, imprisonment for life or imprisonment for
a term of not less than ten years;
(ii) sixty days, where the investigation relates to any other offence,
and, on the expiry of the said period of ninety days, or sixty days,
as the case may be, the accused person shall be released on bail
if he is prepared to and does furnish bail, and every person
released on bail under this sub-section shall be deemed to be so
released under the provisions of Chapter XXXIII for the purposes
of that Chapter;
16
(b) no Magistrate shall authorise detention of the accused in
custody of the police under this section unless the accused is
produced before him in person for the first time and subsequently
every time till the accused remains in the custody of the police,
but the Magistrate may extend further detention in judicial
custody on production of the accused either in person or through
the medium of electronic video linkage;
(c) no Magistrate of the second class, not specially empowered in
this behalf by the High Court, shall authorise detention in the
custody of the police.
Explanation I.–For the avoidance of doubts, it is hereby declared
that, notwithstanding the expiry of the period specified in Para
(a), the accused shall be detained in custody so long as he does
not furnish bail. Explanation II.–If any question arises whether
an accused person was produced before the Magistrate as
required under clause (b), the production of the accused person
may be proved by his signature on the order authorising
detention or by the order certified by the Magistrate as to
production of the accused person through the medium of
electronic video linkage, as the case may be.
Provided further that in case of a woman under eighteen years of
age, the detention shall be authorised to be in the custody of a
remand home or recognised social institution.”
10. Section 167(2) of Cr.P.C. was introduced in the year 1978,
giving emphasis to the maximum period of time to complete the
investigation. This provision has got a laudable object behind it,
which is to ensure an expeditious investigation and a fair trial,
and to set down a rationalised procedure that protects the
interests of the indigent sections of society. This is also another
limb of Article 21, agency has to expedite the process of
17
investigation as a suspect is languishing under incarceration.
Thus, a duty is enjoined upon the agency to complete the
investigation within the time prescribed and a failure would
enable the release of the accused. The right enshrined is an
absolute and indefeasible one, ensuring to the benefit of
suspect.
11. It is already stated supra that the respondent after
conducting investigation had filed complaint on 05.11.2024
before Sessions Judge, Hyderabad, and the same was taken
cognizance on 04.12.2024 and numbered as S.C.No.888 of
2024 and the case is posted for framing of charges. Hence, this
Court of considered view that the petitioner is not entitled to
claim the benefit under Section 167(2) of the Cr.P.C, for grant
of statutory bail.
12. In C. Parthasarthy supra, the Hon’ble Supreme Court
held that an accused is entitled to statutory bail under Section
167(2) of the Criminal Procedure Code (Cr. P.C.) if the
investigation is not completed within the prescribed time limit
of 60 days for offences not punishable by death or life
imprisonment. The court emphasized that the filing of an
incomplete charge sheet or complaint does not negate this right
if the investigation remains unfinished. The case stated that the
18
essential balance between the rights of the accused and the
duties of investigative authorities, emphasizing the importance
of personal liberty. It highlights the obligation of these
authorities to complete investigations within a reasonable
timeframe, ensuring that personal liberty is not unjustly
compromised.
12.1. In V. Senthil Balaji supra, the Hon’ble Supreme
Court held an accused is entitled to bail if the trial is expected
to extend beyond a reasonable timeframe, particularly when the
period of incarceration has exceeded a significant portion of the
potential sentence, thereby safeguarding the right to a speedy
trial. The appellant, in this case had been detained for over 15
months under the Prevention of Money Laundering Act (PMLA)
and argued that the complexity of the case, involving multiple
accused and witnesses, indicated that the trial could take
several years. Although the Enforcement Directorate raised
concerns about potential evidence tampering due to Balaji’s
influential position, the court found that the trials for both the
scheduled offences and the PMLA charge would not conclude in
a reasonable time, violating his right to a speedy trial under
Article 21 of the Constitution. Consequently, the court granted
bail with specific conditions, emphasizing the necessity of
19
timely judicial processes and the obligation to prevent
prolonged detention without trial.
12.2. In Prem Prakash supra, the Hon’ble Supreme Court
held that the conditions for granting bail under Section 45 of
the Prevention of Money Laundering Act (PMLA). imposes
certain restrictions on bail, it does not create an absolute bar.
The key principle is that “bail is the rule and jail is the
exception,” in line with Article 21 of the Constitution, which
protects the right to personal liberty. The court emphasized
that prolonged detention without trial infringes on the right to a
speedy trial, especially when the accused has been in custody
for a significant time with no imminent resolution of the case.
Additionally, allegations of misuse of jail facilities should be
addressed by the appropriate authorities but should not be the
sole reason for denying bail.
12.3. In Arvind Kejriwal supra, the Hon’ble Supreme
Court held that a bail application under the Prevention of
Money Laundering Act (PMLA) can be filed at any stage of the
proceedings, irrespective of whether a complaint has been
lodged or charges framed, emphasizing that the right to bail is
not contingent on the stage of the case. The court further held
that the necessity for arrest under Section 19(1) of the PMLA
20
must be justified beyond mere compliance with formal
parameters, aligning with the principles of the Code of Criminal
Procedure. Additionally, the court introduced the
proportionality test, which requires a careful balance between
individual rights and public interest, assessing the legitimacy of
the aim, rational connection, availability of less restrictive
alternatives, and overall balance. The right to bail is upheld
while considering the necessity of arrest and the protection of
fundamental rights.
13. The judgments relied upon by the learned Senior Counsel
for the petitioner are not applicable to facts and circumstances
of this case on the ground that the provisions of the PMLA
specifically prohibits money laundering, a serious threat to
national financial integrity.
14. In the present case, while the petitioner is in Directorate
of Enforcement custody, on 17.10.2024, the respondent was
found in illegal possession of one mobile phone without
permission from the Court or custodian. The respondent by
invoking the provisions of Section 50 (5) of the PMLA,
impounded the said mobile phone through order dated
17.10.2024.
21
15. On a perusal of the record, the actual quantum of fraud
committed by the petitioner is much bigger than the
attachment and further investigation to quantify the remaining
proceeds of crime to attach the same is under progress to that
extent. The said averment was not denied by the petitioner and
even as per the provisions of Section 5 of the PMLA, the
investigation is essential to trace and attach the remaining
proceeds of the crime.
16. It is relevant to extract the provisions of Section 45 of the
PMLA Act, which reads as follows:
“45. Offences to be cognizable and non-bailable.
(1)[Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person accused of an offence
[under this Act] [Substituted by Act 20 of 2005, Section 7, for
certain words (w.e.f. 1.7.2005).] shall be released on bail or on his
own bond unless]
(i) the Public Prosecutor has been given an opportunity to
oppose the application for such release; and
(ii) where the Public Prosecutor opposes the application, the
Court is satisfied that there are reasonable grounds for believing
that he is not guilty of such offence and that he is not likely to
commit any offence while on bail:
Provided that a person, who is under the age of sixteen years or is
a woman or is sick or infirm [or is accused either on his own or
along with other co-accused of money-laundering a sum of less
than one crore rupees] [Inserted by Finance Act, 2018 (Act No. 13
of 2018) dated 29.3.2018.], may be released on bail, if the Special
Court so directs:
22
Provided further that the Special Court shall not take cognizance
of any offence punishable under section 4 except upon a
complaint in writing made by
(i) the Director; or
(ii) any officer of the Central Government or State
Government authorised in writing in this behalf by the Central
Government by a general or a special order made in this behalf by
that Government.
[(1-A) Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), or any other provision of this Act, no
police officer shall investigate into an offence under this Act
unless specifically authorised, by the Central Government by a
general or special order, and, subject to such conditions as may
be prescribed;] [Inserted by Act 20 of 2005, Section 7 (w.e.f.
1.7.2005).]
(2) The limitation on granting of bail specified in [***] [The
words “clause (b)” omitted by Act 20 of 2005, Section 7 (w.e.f.
1.7.2005).] of sub-section (1) is in addition to the limitations
under the Code of Criminal Procedure, 1973 (2 of 1974) or any
other law for the time being in force on granting of bail.”
17. The above said provision clearly reveals that there is
specific bar to grant bail subject to certain conditions. If the
Court is satisfied that there are reasonable grounds that he is
not guilty of such offence and he is not likely to commit the
offence while on bail.
18. In Kanhaiya Prasad supra, the Hon’ble Supreme Court
held that the Prevention of Money Laundering Act (PMLA) aims
to prevent money laundering, a serious offense that threatens
the nation’s financial integrity and sovereignty. It is mentioned
in Section 45 of the PMLA, which has an overriding effect on
23
the Code of Criminal Procedure Cr.P.C, imposes two mandatory
conditions for granting bail to individuals accused of offenses
punishable by more than three years of imprisonment and the
prosecutor must be allowed to oppose the bail application, and
the court must find reasonable grounds to believe the accused
is not guilty and unlikely to reoffend. In this case, the High
Court granted bail in a casual manner without adhering to
these requirements, failing to establish any reasonable grounds
for the respondent’s innocence or likelihood of reoffending,
rendering the bail order unsustainable and untenable in law.
The Supreme Court set aside the High Court’s decision and
remanded the matter for fresh consideration, reinforcing the
need for thorough judicial scrutiny in cases involving money
laundering.
19. It is very much relevant to place on record that in Serious
Fraud Investigation Office v. Aditya Sarda 6, the Hon’ble
Supreme Court held that in connection with serious allegations
of money laundering under the Prevention of Money Laundering
Act (PMLA), has been enacted to deal with the subject of money
laundering activities which poses a significant threat to the
nation’s financial integrity and sovereignty of the countries. It
highlighted the mandatory conditions under Section 45 of the
6
2025 SCC OnLine SC 764
24
PMLA for granting bail, which require the prosecutor to be
given an opportunity to oppose bail and the court to find
reasonable grounds for believing the accused is not guilty and
unlikely to reoffend. Any casual or cursory approach by the
Courts while considering the bail application of the offender
involved in the offence of money laundering and granting bail
by passing cryptic orders without considering the seriousness
of the crime and without considering the rigours of Section 45,
cannot be justified. In the present case, the Supreme Court
found that the High Court had granted bail in a casual manner
without adhering to these requirements, failing to establish any
reasonable grounds for the respondent’s innocence or
likelihood of reoffending. Consequently, the Supreme Court set
aside the High Court’s decision, remanding the matter for fresh
consideration while underscoring the serious nature of money
laundering offenses and the need for stringent judicial scrutiny
in such cases. The respondent was ordered to surrender before
the Special Court within a week.
20. The respondent specifically averred in the counter-
affidavit that when the petitioner is in judicial custody, the
proceeds of crime was transferred to the account of the
daughter-in-law of the petitioner and subsequently, she
25
withdrew the proceeds of crime in cash and handed it the
person of the petitioner.
21. It is already stated supra as per the Investigating Officers,
the medical certificate produced by the petitioner is a forged
and fabricated one and while the petitioner was in judicial
custody, on 17.10.2024, he possessed a mobile phone, without
obtaining any permission from the Court or the custodian. The
above said conduct of the petitioner clearly reveals that if the
petitioner released on bail, he will interfere with the
investigation, which is going to be conducted by the
Investigating Officer to quantify the remaining proceeds of
crime and to attach the said amount, and he also likely to
commit offences. Hence, as per Section 45 of the PMLA and
basing on the said conduct, this Court is of the view that the
petitioner is not entitled for grant of bail at this stage, especially
according to the Investigating Officers they have attached the
proceeds of crime only to a tune of Rs.161.50 Crores and
further investigation to quantify the remaining proceeds of
crime and attach the same is under progress.
22. It is relevant to extract the explanation (ii) of sub-section
(1) of Section 44 of the PMLA.
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“44. Offences triable by Special Courts.
(1) xxx xxx xxx
(i) xxx xxx xxx
(ii) the complaint shall be deemed to include any
subsequent complaint in respect of further investigation
that may be conducted to bring any further evidence,
oral or documentary, against any accused person
involved in respect of the offence, for which complaint
has already been filed, whether named in the original
complaint or not”.
23. Thus, the above said provisions clearly reveal that even
subsequent to filing of the complaint also, the Investigating
Officers are entitled to conduct further investigation to bring
further oral and documentary evidence against any accused
person in respect of the offence.
24. It is already stated supra that the specific claim of the
respondent is that the petitioner has collected the huge amount
of proceeds of crime of more than Rs.800 Crores and they
attached proceeds of crime only to a tune of Rs.161.50 Crores
and further investigation to quantify the remaining proceeds of
crime and to attach the same is under progress.
25. Taking into consideration the facts and circumstances of
the case and also the gravity of the offence, this Court is not
inclined to grant bail to the petitioner.
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26. Accordingly, the criminal petition is dismissed.
Miscellaneous applications, pending if any, shall stand
closed.
_______________________
J. SREENIVAS RAO, J
Date: 16.04.2025
mar
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