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2026 Supreme(Guj) 458
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
HASMUKH D. SUTHAR, J.
Sh. Rajendrakumar Mahendrabhai Patel S/O Mahendrabhai Patel – Appellant
Versus
Director of Enforcement thro. Harmanpreet Singh, asst. Director & Anr.
R/CRIMINAL MISC.APPLICATION (FOR REGULAR BAIL – BEFORE CHARGESHEET) NO. 7098 of 2026
Decided on : 29-06-2026
Important Points
Subject
Criminal Law - Economic Offences / Money Laundering
Act Referred
PREVENTION OF MONEY LAUNDERING ACT : S.19, S.19(1), S.2(1)(u), S.24, S.3, S.4, S.44, S.45, S.5, S.50, S.50(2), S.50(2)(3), S.50(3), S.66(2)
PREVENTION OF CORRUPTION ACT : S.12, S.13(1)(d), S.13(2), S.7
GUJARAT LAND REVENUE CODE : S.65, S.65(b)
SAURASHTRA GHARKHED TENANCY SETTLEMENT AND AGRICULTURAL LAWS ORDINANCE ACT : S.54, S.55
CONSTITUTION OF INDIA : Art.20(3), Art.21
Headnote
(B) Bail - Socio-economic offences - Courts must adopt a differential approach towards bail in economic offences compared to conventional crimes, as these involve long-term conspiracies and damage to the national economy and public trust - Personal liberty under Article 21 is not absolute and is subject to statutory restrictions in special laws. (Paras 8.5, 9.1, 9.3)
Facts of the case:
An application for regular bail was filed by a public servant in connection with a money laundering complaint arising from alleged illegal gratification and corrupt practices regarding land conversion applications in an administrative office. Search operations led to the recovery of significant cash and records evidencing a systematic bribe-sharing mechanism. The authorities alleged that a portion of the illicit funds was siphoned through family accounts.
Findings of Court:
The court found that the applicant failed to satisfy the mandatory twin conditions under Section 45 of the PMLA. The evidence, including digital footprints and witness statements, indicated a substantial prima facie case of involvement in a high-level conspiracy to generate and conceal proceeds of crime. The court emphasized that the applicant's position of authority and the ongoing nature of the investigation justified custodial detention.
Issues: Whether the registration of PMLA proceedings is maintainable without a formal charge-sheet in the predicate offence; whether the applicant is entitled to bail despite the high threshold set by the PMLA; and whether the applicant can claim parity with non-arrested individuals involved in the same set of facts.
Ratio Decidendi: Money laundering is a standalone offence, and while a scheduled offence is necessary for the existence of proceeds of crime, the initiation of PMLA proceedings does not await the culmination of trial or investigation in the predicate offence. The mandatory twin conditions in Section 45 limit the scope of bail, especially when socioeconomic impact and evidence tampering risks are identified.
Result: Application dismissed.
For the Appellant :MR SUDHIR I NANAVATI, SR. ADVOCATE with MS KAJAL D SHAH(11966), MR VAIBHAV B SHUKLA, MR ANIL H PATEL and MS POOJA V MAHESHWARI for the NANAVATI & NANAVATI(1933)
For the Respondent:SR. ADVOCATE MR SV RAJU, ADDL. SOLICITOR GENERAL with MR ZOHEB HOSSAIN,
SPL. COUNSEL with MR RAJESH K KANANI(2157) MR HARDIK MEHTA, APP
ORDER :
HASMUKH D. SUTHAR, J.
[1.0] Present application was re-listed before this Court due to change of roster. With the consent of learned Counsel appearing for the respective parties, present application is taken up for final hearing.
[2.0] The present bail application is filed under Section 483 of the Bharatiya Nyaya Suraksha Sanhita, 2023 (for short “BNSS”) for Regular Bail in connection with ECIR No.ECIR/HIU-II/43/2025 dated 23.12.2025 PMLA Case Complaint No.03/2026 filed by the respondent No.1 for the offence registered under Sections 3 and punishable under Section 4 of the Prevention of Money Laundering Act, 2002 (hereinafter referred to as “PMLA”).
SUBMISSIONS ON BEHALF OF THE APPLICANT:
[3.0] Learned Senior Advocate Mr. Sudhir I. Nanavati assisted by learned advocates Ms. Kajal D. Shah, Mr. Vaibhav B. Shukla, Mr. Anil H. Patel and Ms. Pooja V. Maheshwari for the applicant has submitted that present applicant is falsely enroped in the offence in absence of any statement of any victim or agriculturist and merely based on presumption the applicant is arraigned as an accused. That, applicant is an IAS Officer of 2015 Batch and was posted as Collector at Surendranagar on 01.02.2025 and prior to that the applicant had been performing his duty as Assistant Collector at Talaja, (Bhavnagar); District Development Officer at Sabarkantha and Deputy Municipal Commissioner at Surat and applicant is having blot less career and subsequently the applicant was transferred to Surendranagar and took over charge as a Collector of District Surendranagar on 01.02.2025.
[3.1] It is further submitted that respondent No.1 – authority has initially registered ECIR No.ECIR/HIU-II/43/2025 dated 23.12.2025. Pursuant to the said ECIR, complaint came to be filed by the Assistant Director as PMLA Case i.e. Complaint No.03/2026. On the same day, FIR being CR No.0/2025 came to be registered by the ACB, Surendranagar Police Station for the offence under Sections 12, 13(1)(d), 13(2) and 7 of the Prevention of Corruption Act (for short “PC Act”) and subsequently said ‘0’ numbered FIR was registered as FIR being CR No.11194070250007 of 2025 on 23.12.2025 under the provisions of the PC Act. Based on the said FIR under the PC Act, first blush of argument on behalf of the applicant was that respondent No.1 – authority has misused the power and in absence of any predicate offence, straightway PMLA complaint came to be registered and it is settled principle of law that such type of criminal complaint is not maintainable and permissible in absence of predicate offence.
[3.2] Learned Senior Advocate Mr. Nanavati has further submitted that in the complaint registered with ACB Police Station, it is alleged that at the office of Collector, Surendranagar, one employee namely Mr. Chandrasinh Mori was serving as Deputy Mamlatdar and on 23.12.2025, from the house of said Mr. Chandrasinh Mori, cash to the tune of Rs.67.50 lakh has been recovered and based on the statement of Mr. Chandrasinh Mori, allegation has been leveled against the present applicant that the present applicant is also accomplice of the said Mr. Chandrasinh Mori and FIR bearing No.7/2025 dated 23.12.2025 was registered in absence of any demand and acceptance of illegal gratification and recovery of money. The impugned ECIR bearing No.ECIR/HIU-II/43/2025 dated 23.12.2025 was registered by the Director of Enforcement. It is pertinent to note that till date the present applicant has not been arrested in connection with the said registered under the PC Act.
[3.3] The search was carried at the official residence of the present applicant on 23.12.2025. He has submitted that the panchnama and seizure memo to that effect was prepared and upon perusal of the same, it appears that no incriminating documents or material were found at the place of official residence of the present applicant and 10 digital devices, one pen-drive and one hard drive were seized however, nothing is found which show the involvement of the pre
