Bail should not be denied as a form of punishment; however, in cases of money laundering, serious allegations and potential interference with investigations warrant careful consideration against bail.

ORDER :

SHIVASHANKAR AMARANNAVAR, J.

This petition is filed by accused No.23 under Section 483 of BNSS praying to grant bail in ECRI/BGZO/40/2023 dated 30.11.2023 pending on the file of III Additional District and Sessions Judge, D.K., Mangaluru in Spl.C.C.No.233/2024 for the offence under Section 4 of the Prevention of Money Laundering Act, 2002 (for short ‘PMLA’)

2. Heard learned Senior Counsel for the petitioner and learned standing counsel for respondent.

3. Learned counsel for the petitioner would contend that petitioner was not accused when the complaint was filed on the basis of which case in Spl.C.C.No.233/2024 has been registered and it was filed against accused Nos.1 to 22. In the further investigation the petitioner was inquired and he was arrested on 08.07.2025 and additional complaint has been filed against accused Nos.23 to 39 wherein the petitioner has been arraigned as Accused No.23. The allegation against the petitioner is that he had received proceeds of crime i.e., money in cash and also through bank transfers out of fraudulent compensation siphoned from the Karnataka Industrial Area Development Board (for short ‘KIADB’) in connection with other accused. He is alleged to have withdrawn cash from bank accounts which were opened with fake identities or bank account of other accused i.e., cash withdrawal of fraudulent compensation siphoned from KIADB. There is a hand loan agreement dated 05.04.2022 where under petitioner has taken hand loan of Rs.25 lakhs from Smt.Kallava Ramappa Kamdoli. There is an explanation for the amount received by the petitioner in a sum of Rs.25 lakhs which he received as a hand loan and has not received any proceeds of crime. The documents pertaining to payment of compensation to original owners, land acquired have not been produced. The said owners statement are not recorded. The petitioner is not accused in predicate offence. The trial is not commenced. He placed reliance on the judgment of Hon’ble Apex Court in the case of Manish Sisodia v. Directorate of Enforcement (2024 INSC 595) wherein it is held as under:

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”.

54. In the present case, in the ED matter as well as the CBI matter, 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitized documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind the bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution. As observed time and again, the prolonged incarceration before being pronounced guilty of an offence should not be permitted to become punishment without trial.

4. He submits that in Spl.CC. 233/2024 there are 14 witnesses and 128 documents and in additional complaint there are 14 witnesses and 174 documents and the trial cannot be completed in a reasonable time. He further contends that the