Research › Search › Judgment

Kerala High Court · body

2025 DIGILAW 761 (KER)

SHRI. SATHEESH KUMAR P v. ASSISTANT DIRECTOR

2025-03-27

P.V.KUNHIKRISHNAN

body2025
ORDER : These Bail Applications are filed under Section 483 of Bharatiya Nagarik Suraksha Sanhita (for short, BNSS ). 2. Petitioners are the accused in Crime No.ECIR/KCZO/45/2021, which was registered by the Enforcement Directorate, Kochi, for allegedly committing the offences under Section 3 read with Section 17 , which is punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (for short, Act 2002). 3. The prosecution case in brief is that, from 2014 to 2020, accused Nos. 1 to 6 sanctioned and disbursed multiple loans from the Karuvannur Service Co-operative Bank (for short, Bank), to the same person, against the loan limits set by the Bank, by accepting the title deeds of the same property as collateral security and have forged the membership records of the Society and including persons who are not members of the Society. The accused had furnished false addresses, manipulated the software of the computer system, and disbursed loans in the names of property owners without their knowledge or consent. The accused persons had also manipulated the inventory of the supermarket run by the Bank. Consequently, the accused cheated and misappropriated an amount of Rs.100 Crores from the Bank, is the prosecution case. The first informant filed a complaint before Irinjalakkuda Police Station and Crime No.650/2021 was registered, alleging offences punishable under Sections 406, 420, 409 and 465 read with Section 34 of the Indian Penal Code (for short, IPC). Subsequently, the case was transferred to the Crime Branch and was re-registered as Crime No.165/2021. The Dy.S.P., Crime Branch, Thrissur, informed the Deputy Director of Enforcement Directorate, Kochi about the details of the accused and the status of the crime. As Section 420 IPC is a scheduled offence under Section 2(1)(x) and 2(1)(j) of the Act2002, enquiries were initiated against the accused persons after recording the facts of the scheduled offence and ECIR No.KCZO/45/2021 dated 02.08.2021 was registered. It is alleged that by committing the above criminal activity, the accused obtained and possessed the proceeds of the crime, laundered and projected the proceeds of the crime as untainted money as defined under Sections 2(1)(u) and 2(1)(v) of the Act 2002. The proceeds of the crime generated, acquired, possessed and concealed by the accused persons are now being projected and claimed as untainted money and properties. Thus it is alleged that the accused committed the above offences. The proceeds of the crime generated, acquired, possessed and concealed by the accused persons are now being projected and claimed as untainted money and properties. Thus it is alleged that the accused committed the above offences. Subsequently, the complaint was filed and the case is now pending before the Additional Special Court Judge (SPE/CBI)-III, Ernakulam, which is the Special Court for trial of the offences under the Act 2002. The case is numbered as SC PMLA 04/2023. The petitioners seek bail under Section 483 of BNSS in these bail applications. 4. Heard the learned Senior Counsel Sri.B. Raman Pillai who appeared for the petitioner in BA No.593/2025 and Sri.S. Rajeev, the learned counsel for the petitioner in BA No.802/2025. I also heard Sri. A.R.L.Sundaresan, the Assistant Solicitor General of India (ASGI). 5. The counsel for the petitioners raised a short point before this Court. The counsel submitted that the petitioners are in custody for about 18 months. They were arrested on 04.09.2023. The trial of the case is not started. The maximum punishment that can be imposed for the offence alleged is up to seven years. In such circumstances, in the light of the principle laid down by the Apex Court in V. Senthil Balaji v. Deputy Director, Directorate of Enforcement [2024 KLT OnLine 2363 (SC)], the petitioners are entitled to bail. The ASGI submitted that the petitioners are not entitled to the benefit of the above dictum. The ASGI took me through the counter filed on behalf of the respondents. It is submitted that the trial court is taking steps to conclude the trial and there is no delay on the part of the prosecution in completing the trial. In such circumstances this Court may not accept the principle in Senthil Balaji’s case (supra) is the submission. The ASGI also submitted that the contention of the petitioner in BA No.593/2025 was considered in detail in BA No.11142/2023 and this Court observed that there are no reasonable grounds for believing that the petitioner is not guilty of the offences alleged and that he is not likely to commit the offence if he is enlarged on bail. The ASGI also submitted that the above order was challenged before the Apex Court by filing Special Leave to Appeal (Criminal) No.14188/2024, which was dismissed as withdrawn. The ASGI also submitted that the above order was challenged before the Apex Court by filing Special Leave to Appeal (Criminal) No.14188/2024, which was dismissed as withdrawn. It is also submitted that the Apex Court directed the Special Court to proceed with the trial as expeditiously as possible. Therefore it is submitted that Senthil Balaji’s case (supra) is not applicable to the facts and circumstances of the case. 6. The short point to be decided in this case is whether the principle in Senthil Balaji’s case (supra) is to applicable in the facts and circumstances of the case. It will be better to extract the relevant portion of Senthil Balaji’s case (supra). “27. Under the Statutes like PMLA, the minimum sentence is three years, and the maximum is seven years. The minimum sentence is higher when the scheduled offence is under the NDPS Act. When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that S.45(1) (ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time. What a reasonable time is will depend on the provisions under which the accused is being tried and other factors. One of the most relevant factor is the duration of the minimum and maximum sentence for the offence. Another important consideration is the higher threshold or stringent conditions which a statute provides for the grant of bail. Even an outer limit provided by the relevant law for the completion of the trial, if any, is also a factor to be considered. The extraordinary powers, as held in the case of K. A. Najeeb ( (2021) 3 SCC 713 ), can only be exercised by the Constitutional Courts. The Judges of the Constitutional Courts have vast experience. Based on the facts on record, if the Judges conclude that there is no possibility of a trial concluding in a reasonable time, the power of granting bail can always be exercised by the Constitutional Courts on the grounds of violation of Part III of the Constitution of India notwithstanding the statutory provisions. The Constitutional Courts can always exercise its jurisdiction under Art.32 or Art.226, as the case may be. The Constitutional Courts can always exercise its jurisdiction under Art.32 or Art.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 S.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 Art.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. 28. Some day, the courts, especially the Constitutional Courts, will have to take a call on a peculiar situation that arises in our justice delivery system. There are cases where clean acquittal is granted by the criminal courts to the accused after very long incarceration as an undertrial. When we say clean acquittal, we are excluding the cases where the witnesses have turned hostile or there is a bona fide defective investigation. In such cases of clean acquittal, crucial years in the life of the accused are lost. In a given case, it may amount to violation of rights of the accused under Art.21 of the Constitution which may give rise to a claim for compensation. 29. As stated earlier, the appellant has been incarcerated for 15 months or more for the offence punishable under the PMLA. In the facts of the case, the trial of the scheduled offences and, consequently, the PMLA offence is not likely to be completed in three to four years or even more. If the appellant's detention is continued, it will amount to an infringement of his fundamental right under Art.21 of the Constitution of India of speedy trial.” 7. In the facts of the case, the trial of the scheduled offences and, consequently, the PMLA offence is not likely to be completed in three to four years or even more. If the appellant's detention is continued, it will amount to an infringement of his fundamental right under Art.21 of the Constitution of India of speedy trial.” 7. In this case also, for the offences alleged, the minimum sentence is three years and the maximum sentence is seven years. Admittedly the trial in the case has not started. In the objection filed in BA No.593/2025, it is stated that the procedure for trial is in motion and the trial is about to commence. It is also stated that now the case is posted for consideration of the discharge petition. That itself shows that the trial has not started. Admittedly the petitioners in these cases are in custody from 04.09.2023. That means they are in custody for 18 months. In such circumstances, the principle laid down by the Apex Court in Senthil Balaji’s case (supra) is squarely applicable in this case. The rigour under Section 45 of Act 2002 can be relaxed in the peculiar facts and circumstances of the case. Therefore the petitioners can be released on bail after imposing stringent conditions. 8. Moreover, it is a well-accepted principle that the bail is the rule and the jail is the exception. The Hon'ble Supreme Court in Chidambaram. P v Directorate of Enforcement [ 2019 (16) SCALE 870 ] , after considering all the earlier judgments, observed that, the basic jurisprudence relating to bail remains the same inasmuch as the grant of bail is the rule and refusal is the exception so as to ensure that the accused has the opportunity of securing fair trial. 9. Moreover, in Jalaluddin Khan v. Union of India [ 2024 KHC 6431 ] , the Hon'ble Supreme Court observed that: “21. Before we part with the Judgment, we must mention here that the Special Court and the High Court did not consider the material in the charge sheet objectively. Perhaps the focus was more on the activities of PFI, and therefore, the appellant's case could not be properly appreciated. When a case is made out for a grant of bail, the Courts should not have any hesitation in granting bail. The allegations of the prosecution may be very serious. Perhaps the focus was more on the activities of PFI, and therefore, the appellant's case could not be properly appreciated. When a case is made out for a grant of bail, the Courts should not have any hesitation in granting bail. The allegations of the prosecution may be very serious. But, the duty of the Courts is to consider the case for grant of bail in accordance with the law. "Bail is the rule and jail is an exception" is a settled law. Even in a case like the present case where there are stringent conditions for the grant of bail in the relevant statutes, the same rule holds good with only modification that the bail can be granted if the conditions in the statute are satisfied. The rule also means that once a case is made out for the grant of bail, the Court cannot decline to grant bail. If the Courts start denying bail in deserving cases, it will be a violation of the rights guaranteed under Art.21 of our Constitution.” (underline supplied) 10. In Manish Sisodia v. Directorate of Enforcement [2024 KHC 6426] , also the Hon'ble Supreme Court observed that: “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 and the High Courts should recognize the principle that "bail is rule and jail is exception".” 11. Considering the dictum laid down in the above decision and considering the facts and circumstances of this case, these Bail Applications are allowed with the following directions: 1. Petitioners shall be released on bail on executing a bond for Rs.50,000/- (Rupees Fifty Thousand only) with two solvent sureties each, each for the like sum to the satisfaction of the jurisdictional Court. 2. Petitioners shall be released on bail on executing a bond for Rs.50,000/- (Rupees Fifty Thousand only) with two solvent sureties each, each for the like sum to the satisfaction of the jurisdictional Court. 2. The petitioners shall appear before the Investigating Officer for interrogation as and when required. The petitioners shall co-operate with the investigation and shall not, directly or indirectly make any inducement, threat or promise to any person acquainted with the facts of the case so as to dissuade him/her from disclosing such facts to the Court or to any police officer. 3. Petitioners shall not leave India without permission of the jurisdictional Court. 4. Petitioners shall not commit an offence similar to the offence of which they are accused, or suspected, of the commission of which they are suspected. 5. The observations and findings in this order is only for the purpose of deciding this bail application. The principle laid down by this Court in Anzar Azeez v. State of Kerala [2025 SCC OnLine KER 1260] is applicable in this case also. 6. If any of the above conditions are violated by the petitioners, the jurisdictional Court can cancel the bail in accordance to law, even though the bail is granted by this Court. The prosecution and the victim are at liberty to approach the jurisdictional court to cancel the bail, if there is any violation of the above conditions.