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2025 Supreme(Ker) 1113
IN THE HIGH COURT OF KERALA AT ERNAKULAM
P.V. KUNHIKRISHNAN, J.
Shri. Satheesh Kumar P., S/o. P.N. Kunhiraman Nambiar - Petitioner
Versus
Assistant Director, Directorate of Enforcement, Government of India & Ors. - Respondents
Bail Appl. Nos. 593, 802 of 2025
Decided On : 27-03-2025
For the Petitioner: R. Anil, B. Raman Pillai (SR.), Sujesh Menon V.B., Thomas Sabu Vadakekut, Mahesh Bhanu S., Ressil Lonan, Joel George Kampiyil, Ananth Krishna K.S., S. Rajeev, V. Vinay, M.S. Aneer, Sarath K.P., K.S. Kiran Krishnan, Dipa V.
For the Respondent: Jaishankar V. Nair, A R L Sundaresan(ASGI).
IMPORTANT POINT
Bail is the rule and jail is the exception; prolonged pre-trial detention without trial infringes on the right to a speedy trial under Article 21.
Headnote:
(A) Prevention of Money Laundering Act, 2002 - Sections 3, 4, 17, and 45 - Bail applications filed under Section 483 of Bharatiya Nagarik Suraksha Sanhita - Accused charged with multiple loan frauds and money laundering - Allegations include forgery and misappropriation of funds amounting to Rs.100 Crores - Petitioners in custody for 18 months, trial not commenced - Court considers principles from V. Senthil Balaji v. Deputy Director, Directorate of Enforcement regarding bail eligibility - Court finds that the rigour under Section 45 can be relaxed in this case. (Paras 3 , 5 , 6 , 11 )
(B) Bail - General principle - Bail is the rule and jail is the exception - Courts must ensure that the rights of the accused under Article 21 of the Constitution are upheld, especially in cases of undue delay in trial. (Paras 8 , 9 , 10 )
Facts of the case:
The petitioners are accused of fraudulently disbursing loans against the same collateral, resulting in significant financial loss to the bank. They have been in custody since September 2023, with the trial yet to commence.
Findings of Court:
The court allowed bail, emphasizing the need to uphold the principle that bail is the rule and jail is the exception, particularly given the lengthy pre-trial detention.
Issues: Whether the principle established in Senthil Balaji,s case applies to the current circumstances, particularly regarding the duration of custody and the commencement of trial.
Ratio Decidendi: The court ruled that the prolonged custody without trial infringes on the accused's right to a speedy trial under Article 21, justifying the grant of bail under stringent conditions.
Result: Bail applications allowed with specific conditions imposed.
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. 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
