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TMI Blog2025 (4) TMI 668X X X X Extracts X X X X X X X X Extracts X X X X ..... MLA. 2. Since both Applicants raise overlapping legal and factual grounds in support of their applications, a common order is being passed. To the extent their respective pleas differ, the same shall be addressed separately. 3. Briefly, the facts of the case, as per the Enforcement Directorate, are as follows: 3.1 The case pertains to illegal allotment of tender for supply, installation, testing and commissioning of electromagnetic flow meters and corresponding operations. The tender was secured by NKG Infrastructure Limited ["NKGIL"] on the basis of alleged fake performance certificates. 3.2 It is alleged that Mr. Anil Kumar Aggarwal (the Applicant in BAIL APPLN. 4825/2024) not only facilitated the issuance of these forged performance certificates but also benefited directly from the proceeds of crime. Mr. Anil Kumar Aggarwal paid bribe to Mr. Jagdish Kumar Arora (Applicant in BAIL APPLN. 434/2025), who was then serving as Chief Engineer, Delhi Jal Board ["DJB"], to ensure the tender was awarded to NKGIL. 3.3 On the basis of these fraudulent certificates, a contract worth approximately INR 38.02 crores, was awarded to NKGIL by DJB. Out of the funds received from DJB, NKGIL tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be deferred pending the completion of further investigation. [See: Decision dated 8th February, 2023 of the Delhi High Court in Raman Bhuraria vs, Directorate of Enforcement Bail Appln. No. 4330/2021]. 4.3 The Applicants have already undergone over one year and one month in custody. Prolonged incarceration without trial, constitutes a direct infringement of the Applicants' right to life and liberty under Article 21 of Constitution of India, 1950 ["Constitution"] and ought to weigh heavily in the Court's consideration for bail. 4.4 Even if the trial under the PMLA were to conclude, no final judgment can be rendered unless and until the trial in the scheduled offence is also concluded. Considering the evident delay in both proceedings, the Applicants are entitled to bail on the same principles as enunciated by the Supreme Court in similar cases. 4.5 The right of accused under Article 21 of the Constitution for release on bail, in the event, there is delay has been well recognised by the Supreme Court in the cases i.e. Manish Sisodia v. Directorate of Enforcement 2024 SCC Online SC 19; Satender Kumar Antil v. CBI 2022 INSC 690, Chanpreet Singh Rayat v. Enforcement Directorate Dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3.50 lakhs. It is contended that the latter two amounts cannot be classified as "proceeds of crime," since there is no allegation in the CBI chargesheet of any bribe being paid. These amounts, it is argued, were used towards lawful expenses or retained in the ordinary course of business. 5.3 The figure of INR 1.10 crore, identified as deemed profit, is based solely on the Applicant's own statement and is derived from an assumed profit margin of 6% on the project value of INR 18.38 crores. The Applicant, however, had stated that his profit margin ranged between 5% and 6%. 5.4 On a transaction value of Rs.18.38 crores, a 5% margin would amount to INR 91.90 lakhs, which is below the threshold of INR 1 crore stipulated in the proviso to Section 45 (1) of the PMLA. However, the Enforcement Directorate has proceeded on a deemed profit rate of 6%, apparently to bring the figure above INR 1 crore. It is evident that if the profit margin is reasonably assessed on a consistent basis, the alleged proceeds of crime would fall below the statutory threshold. 5.5 Moreover, the amount of INR 18.38 crores received by the Applicant's firm was inclusive of Goods and Services Tax (GST) amounting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ermore, there is no independent corroboration of the statements made by Mr. Tajinder Pal Singh. The reliance placed by the ED on certain excel spreadsheets is misconceived. These spreadsheets, in the absence of authentication, authorship, or supporting material, are akin to loose sheets, which cannot be treated as books of account maintained in the ordinary course of business. The settled position in law is that such documents, unless duly proved, are inadmissible and devoid of evidentiary value. Crucially, the excel sheets do not bear the name of the Applicant, contain no identifiable reference to him, nor do they bear any signatures or lead to any recovery from the Applicant. In the absence of such material, no prima facie case is made out against the Applicant. Arguments of Enforcement Directorate relating to delay in Trial 7. Mr. Zoheb Hossain, Counsel for ED, on the other hand, strongly opposes the bail application and submits as follows: 7.1. The Applicants' argument that since they have spent little more than a year in custody, and hence they are ipso facto entitled to bail is entirely misconceived. There exists no absolute or mechanical rule that mandates the grant of ba ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. To note a few: a. Shahnawz Ahmed Jeelani Vs. Enforcement Directorate, SLP (Crl. 14173/2023. (Applicant had been in custody for over 1 year, 6 months and 14 days. b. Vipin Kumar Sharma v. Directorate of Enforcement, SLP (Crl.) No. 9540/2024. (Applicant had been in custody for over 1 years 3 months and 22 days) c. Bimal Kumar Jain v. Directorate of Enforcement, SLP (Crl) No. 9656/2022. (Applicant has been in custody for over 2 years 5 months and 26 days) 7.6. The grant of bail in predicate offence is an irrelevant factor while considering bail application in PMLA case. As per explanation (i) in Section 44 of the PMLA, the orders passed in respect of the scheduled offence do not extend to the independent proceedings under PMLA. 7.7. The non-arrest of other individuals, such as Mr. Tajinder Pal Singh and Mr. D.K. Mittal, cannot by itself be a ground for grant of bail. Mr. Tajinder Pal Singh has cooperated with the investigation and has not been shown as a direct beneficiary of the proceeds of crime. Mr. D.K. Mittal's role was limited to issuing forged certificates; he neither received nor retained any part of the proceeds of crime. In contrast, Mr. Anil Kumar Aggarwal is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ring is clearly attracted. 8.3. The investigation has revealed that Mr. Anil Kumar Aggarwal laundered proceeds of crime through fictitious entries in the books of ISI, amounting to INR 18.38 crores in relation to the DJB contract. Bogus purchases were booked in the names of several shell entities, including M/s Xpert Solutions, M/s Modern Enterprises, M/s Shiva Trading Co., and M/s Integrated Hydraulic System. The forensic audit of bank records indicates cash withdrawals and layering amounting to INR 2,42,95,503/-, which constitute proceeds of crime laundered by the Applicant. 8.4. The contention that the threshold of INR 1 crore is not met is factually incorrect. The prosecution complaint specifically quantifies the proceeds of crime in respect of Mr. Anil Kumar Aggarwal at INR 4.26 crores. Out of this, INR 1.63 crores were retained and used by him. Once the proceeds of crime exceed the Rs.1 crore threshold, the proviso to Section 45 (1) does not apply, and the rigours of the twin conditions under the main provision are attracted. The Applicants cannot seek to artificially lower the quantum by relying on selective calculations or speculative deductions. 8.5. Further, as per the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... excluded from the computation of proceeds of crime has no basis in law. Similar arguments have been rejected by the Supreme Court in Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46, as well as Manish Sisodia vs, CBI. 2023 SCC OnLine SC 1393. 8.10 In light of the above, the Applicants have failed to demonstrate any infirmity in the case of the prosecution. The material placed on record sufficiently satisfies the standard required under Section 45 of the PMLA. The statements, electronic evidence, and banking transactions collectively establish a prima facie case for money laundering. Accordingly, the Applicants have not discharged the burden of demonstrating that they are not guilty of the offence and are not likely to commit any offence while on bail. Analysis Whether the Petitioners are entitled to be released on the ground of delay in trial? 9. One of the main planks of the Applicants' case is the delay in conclusion of trial. Both counsels have laid considerable emphasis on this ground, citing constitutional rights enshrined under Article 21 and the judicial recognition that prolonged incarceration without trial undermines the right to personal liberty. The Applic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the facts of the case, there is no possibility of the trial of the scheduled offences commencing in the near future. Therefore, we see no possibility of both trials concluding within a few years. ..xx. ..xx xx.. 25. Considering the gravity of the offences in such statutes, expeditious disposal of trials for the crimes under these statutes is contemplated. Moreover, such statutes contain provisions laying down higher threshold for the grant of bail. The expeditious disposal of the trial is also warranted considering the higher threshold set for the grant of bail. Hence, the requirement of expeditious disposal of cases must be read into these statutes. Inordinate delay in the conclusion of the trial and the higher threshold for the grant of bail cannot go together. It is a well-settled principle of our criminal jurisprudence that "bail is the rule, and jail is the exception." These stringent provisions regarding the grant of bail, such as Section 45 (1) (iii) of the PMLA, cannot become a tool which can be used to incarcerate the accused without trial for an unreasonably long time. 26. There are a series of decisions of this Court starting from the decision in the case of K.A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 226, as the case may be. The Constitutional Courts have to bear in mind while dealing with the cases under the PMLA that, except in a few exceptional cases, the maximum sentence can be of seven years. The Constitutional Courts cannot allow provisions like Section 45 (1) (ii) to become instruments in the hands of the ED to continue incarceration for a long time when there is no possibility of a trial of the scheduled offence and the PMLA offence concluding within a reasonable time. If the Constitutional Courts do not exercise their jurisdiction in such cases, the rights of the undertrials under Article 21 of the Constitution of India will be defeated. In a given case, if an undue delay in the disposal of the trial of scheduled offences or disposal of trial under the PMLA can be substantially attributed to the accused, the Constitutional Courts can always decline to exercise jurisdiction to issue prerogative writs. An exception will also be in a case where, considering the antecedents of the accused, there is every possibility of the accused becoming a real threat to society if enlarged on bail. The jurisdiction to issue prerogative writs is always discretionary. xx ... xx ... xx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Prosecutor, High Court reported in (1978) 1 SCC 240. We quote: "What is often forgotten, and therefore warrants reminder, is the object to keep a person in judicial custody pending trial or disposal of an appeal. Lord Russel, C.J., said [R v. Rose, (1898) 18 Cox]: "I observe that in this case bail was refused for the prisoner. It cannot be too strongly impressed on the, magistracy of the country that bail is not to be withheld as a punishment, but that the requirements as to bail are merely to secure the attendance of the prisoner at trial." 53. The Court further observed that, over a period of time, the trial courts and the High Courts have forgotten a very well-settled principle of law that bail is not to be withheld as a punishment. From our experience, we can say that it appears that the trial courts and the High Courts attempt to play safe in matters of grant of bail. The principle that bail is a rule and refusal is an exception is, at times, followed in breach. On account of non-grant of bail even in straight forward open and shut cases, this Court is flooded with huge number of bail petitions thereby adding to the huge pendency. It is high time that the trial courts ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and there may not be any justification for prolonging the trial. Perhaps there is a need to comply with the directions of this Court to expedite the process and also a stricter compliance of Section 309 of the Code." 15. It must also be noted that recently, in Union of India through the Assistant Director v. Kanhaiya Prasad In SLP Crl. No. 7140 of 2024, the Supreme Court has reiterated that the twin conditions under Section 45 of the PMLA are mandatory and must be objectively satisfied while considering a bail application. Emphasising the legislative intent behind the stringent bail provisions under the PMLA, the Court set aside the order of the High Court and cancelled the bail granted to the accused. This ruling reaffirmed the importance of strict adherence to the conditions stipulated in Section 45 while adjudicating bail pleas under the PMLA. 16. However, in the opinion of the Court, the afore-noted ruling does not negate the constitutional mandate under Article 21, nor does it preclude Constitutional Courts from considering bail in appropriate cases involving undue delay and prolonged incarceration. Indeed, the Supreme Court in Udhaw Singh vs. Enforcement Directorate in SLP ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h statutory rigours are suspended. If it becomes evident that trial is unlikely to reach conclusion within any reasonable span of time, and where such delay is not occasioned by the conduct of the accused, the constitutional imperative of securing personal liberty must assume primacy. The length of custody is undoubtedly a relevant consideration but that by in itself cannot be determinative; the real inquiry lies in whether continued detention serves any legitimate purpose or merely perpetuates incarceration without foreseeable adjudication. The determination must be grounded in context, not abstraction. It requires the Court to engage with the realities of the case - the stage of the proceedings, the stage of prosecution, the conduct of the parties, and the likelihood of meaningful progress in the foreseeable future. In such situations, in cases of prolongation bail is not granted as a concession but as a constitutional necessity. 20. That said, it is pertinent to acknowledge that the factual matrix in Udhaw Singh and V. Senthil Balaji involved far large volume of evidence and number of witnesses. In Udhaw Singh, the prosecution had cited 225 witnesses, of whom only one had been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d complexity of the proceedings in the predicate offence. Therefore, reliance solely on the number of PMLA witnesses or the Special Court's observation that the trial "ought to proceed swiftly" may not be conclusive. 24. Moreover, the scale of the prosecution record in both proceedings is significant. The PMLA complaint alone spans 122 volumes, comprising over 15,750 pages. In parallel, the chargesheet filed by the CBI in the scheduled offence extends across 209 volumes, with 14,385 pages, 101 prosecution witnesses, and a mix of relied-upon and unrelied documents. This sheer volume leaves little doubt that both trials will be document- intensive and procedurally complex. The process of framing charges, issuing summons, examining witnesses, recording statements under Section 313 of the CrPC, and concluding final arguments is unlikely to unfold within any short or predictable timeframe. Against this backdrop, the continued incarceration of the Applicants, despite the absence of any delay attributable to them, would risk converting pre-trial detention into de facto punishment. 25. As regards the contention that the delay is attributable to the Applicants, the Court finds no merit in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccused of money-laundering a sum of less than one crore rupees.." and thus it is not the individual role that is determinative of what is total sum of money laundering. It is the total sum of money laundering in the offence which is to be seen for the purpose of the proviso, which in the present case is to the tune of INR. 8.80 Crores. 29. In view of the above, the Applicant cannot avail the benefit of the monetary threshold under the proviso to Section 45 of the PMLA. The entire scheme, as unearthed during the course of investigation, involves multiple layers of laundering and routing of funds well above the statutory limit of INR 1 crore. Scope of the Court's Jurisdiction and the Twin Conditions under Section 45 (1) (ii) of the PMLA 30. Before addressing the grounds of challenge on the merits, it is necessary to first delineate the scope of the Court's jurisdiction in considering an application for bail under the PMLA. The Enforcement Directorate has rightly stressed that the jurisdiction of this Court, at this stage, is not to conduct a meticulous assessment of the entire evidence or to test the veracity of every factual assertion. Rather, the Court is required to form a prim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct and not any other offence. Since it is difficult to predict the future conduct of an accused, the court must necessarily consider this aspect of the matter having regard to the antecedents of the accused, his propensities and the nature and manner in which he is alleged to have committed the offence. "45. It is, furthermore, trite that for the purpose of considering an application for grant of bail, although detailed reasons are not necessary to be assigned, the order granting bail must demonstrate application of mind at least in serious cases as to why the applicant has been granted or denied the privilege of bail. "46. 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. However, while dealing with a special statute like MCOCA having regard to the provisions contained in sub-section (4) of Section 21 of the Act, the court may have to probe into the matter deeper so as to enable it to arrive at a finding that the materials collected against the accused during the investigation may not justify a judgment of conviction. The findings recorded by the court while granting or refusing bail un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ution is not required to prove the charge beyond reasonable doubt. (emphasis supplied) 40.3 Mohd. Muslim alias Hussain v. State (NCT of Delhi) "19. The conditions which courts have to be cognizant of are that there are reasonable grounds for believing that the accused is "not guilty of such offence" and that he is not likely to commit any offence while on bail. What is meant by "not guilty" when all the evidence is not before the court? It can only be a prima facie determination. That places the court's discretion within a very narrow margin. Given the mandate of the general law on bails (Sections 436, 437 and 439 CrPC) which classify offences based on their gravity, and instruct that certain serious crimes have to be dealt with differently while considering bail applications, the additional condition that the court should be satisfied that the accused (who is in law presumed to be innocent) is not guilty, has to be interpreted reasonably. Further the classification of offences under Special Acts (NDPS Act, etc.), which apply over and above the ordinary bail conditions required to be assessed by courts, require that the court records its satisfaction that the accused might no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e factors the court is of the opinion that in the facts of this case, the appellant deserves to be enlarged on bail." (emphasis supplied) 32. The legal principles laid down in Mohd. Muslim v. State (NCT of Delhi 2023 LiveLaw (SC) 260 further clarify that even in the context of special legislations with stringent bail clauses such as the NDPS Act or PMLA, the Court's assessment must remain confined to a prima facie view of the material. Accordingly, unless the material before the Court raises serious doubts as to the legitimacy of the prosecution's case, bail may be declined; however, such a conclusion must be reached with circumspection and based on concrete material - not speculation or the gravity of the charge alone. 33. We now proceed to apply the above framework to the present case. One of the contentions raised by the Applicants is that the CBI chargesheet in the scheduled offence contains no allegation of bribery rendering the PMLA case unfounded. However, the Court finds merit in the submission of Mr. Hossain, that while the CBI may not have specifically charged the Applicants with offences under the Prevention of Corruption Act, 1988, the scheduled offences formi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... antive evidence and cannot be the foundation of conviction in the absence of other evidence. The Court observed that such confessions are "evidence of a very weak type" and must only serve to lend "assurance" to otherwise satisfactory evidence. The judgment reiterates the principle that a confession cannot substitute the primary burden of proof and must be corroborated with material evidence. 37. Further, reliance is also placed in Somasundaram v. State (2020) 7 SCC 722, relevant portion of which reads as follows: "Accomplice evidence 71. Section 133 of the Evidence Act declares that an accomplice is a competent witness and further that a conviction based on the uncorroborated testimony of an accomplice is not illegal only on account of it being so. Section 133 reads as follows: "133. Accomplice.- An accomplice shall be a competent witness against an accused person; and a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice." 72. It is apposite to notice Section 114 of the Evidence Act, Illustration (b), the court may presume: "(b) that an accomplice is unworthy of credit, unless he is corroborated in material particular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed. The Evidence Act in Section 133 provides that an accomplice is a competent witness against an accused person and that a conviction is not illegal merely because it proceeds upon the uncorroborated testimony of an accomplice. The effect of this provision is that the court trying an accused may legally convict him on the single evidence, of an accomplice. To this there is a rider in Illustration (b) to Section 114 of the Act which provides that the court may presume that an accomplice is unworthy of credit unless he is corroborated in material particulars. This cautionary provision incorporates a rule of prudence because an accomplice, who betrays his associates, is not a fair witness and it is possible that he may, to please the prosecution, weave false details into those which are true and his whole story appearing true, there may be no means at hand to sever the false from that which is true. It is for this reason that courts, before they act on accomplice evidence, Insist on corroboration in material respects as to the offence itself and also implicating in some satisfactory way, however small, each accused named by the accomplice. In this way the commission of the offence is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce in the case, apart from the testimony of the complainant or the accomplice, should in itself be sufficient to sustain conviction. As Lord Reading says: "Indeed, if it were required that the accomplice should be confirmed in every detail of the crime, his evidence would not be essential to the case; it would be merely confirmatory of other and Independent testimony. (Baskerville case, KB p. 664 : All ER p. 42 B-C) 39. All that is required is that there must be some additional evidence rendering it probable that the story of the accomplice (or complainant) is true and that it is reasonably safe to act upon it. 40. Secondly, the independent evidence must not only make it safe to believe that the crime was committed but must in some way reasonably connect or tend to connect the accused with it by confirming in some material particular the testimony of the accomplice or complainant that the accused committed the crime. This does not mean that the corroboration as to identification must extend to all the circumstances necessary to identify the accused with the offence. Again, all that is necessary is that there should be independent evidence which will make it reasonably safe to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unction with other relevant evidence unmistakably makes out the case for convicting an accused. 78. As laid down by this Court, every material circumstance against the accused need not be independently confirmed. Corroboration must be such that it renders the testimony of the approver believable in the facts and circumstances of each case. The testimony of one accomplice cannot be, ordinarily, be supported by the testimony of another approver. We have used the word "ordinarily" inspired by the statement of the law in para 4 in K. Hashim wherein this Court did contemplate special and extraordinary cases where the principle embedded in Section 133 would literally apply. In other words, in the common run of cases, the rule of prudence which has evolved into a principle of law is that an accomplice, to be believed, he must be corroborated in material particulars of his testimony. The evidence which is used to corroborate an accomplice need not be a direct evidence and can be in the form of circumstantial evidence. Accomplice and approver 79. An accomplice is in many cases, par pardoned and he becomes what is known as an approver. An elaborate procedure for making a person an approv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... approver and a set of Excel sheets recovered from a pen drive. These sheets are unsigned, do not bear the Applicants' names, and were not recovered from their possession. Further, the prosecution complaint does not disclose any direct financial flow of alleged bribe money to Applicant Mr. Jagdish Kumar Arora. It is rather the case that such funds were allegedly collected by Mr. Tajinder Pal Singh, now an approver. In these circumstances, while the evidentiary weight and reliability of the said materials can only be tested during trial, at present, the same are not conclusive enough for the court to deny the benefit of bail to the Applicants. 41. Further, the Applicants have no prior criminal record. There is no reasonable apprehension raised by the ED to demonstrate that the Applicants will commit similar offence while on bail. 42. Accordingly, in the opinion of the court, the Applicants have prima facie satisfied the twin conditions under Section 45 (1) (ii) of the PMLA and are thus entitled to be enlarged on bail. Whether there is evidence to infer that the Applicant (Jagdish Kumar Arora) is likely to tamper with the evidence? 43. One of the objections raised by the ED again ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... apprehension of interference-absent credible corroboration-cannot form the basis for denying bail. The prosecution's concern in this regard can be adequately addressed by imposing stringent conditions on the Applicant to prevent any misuse of liberty or contact with witnesses during the pendency of trial. 47. In light of the foregoing, this Court is satisfied that the Applicants have made a sufficient case for the grant of regular bail. Both the Applicants are, therefore, directed to be released on bail, in connection to CT Case No. 12/2024 arising from ECIR bearing No. DLZO-I/45/2022, on furnishing a bail bond for a sum of INR 50,000/-, each, with two sureties of the like amount to the satisfaction of the Jail Superintendent/Trial Court/ Duty MM, subject to the following terms and conditions: 47.1 The Applicants shall surrender their passport with the concerned special court, if not already submitted. 47.2 The Applicants shall join and cooperate with further investigation as and when directed by the Respondent. 47.3 The Applicants shall give their mobile number to the concerned investigating officer and shall keep their mobile phone switched on at all times. 47.4 The Applica ..... X X X X Extracts X X X X X X X X Extracts X X X X
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