Prolonged Detention & Art. 21 Violation Justify Bail in PMLA Cases Despite S.45 Rigours: Rajasthan High Court - 2025-05-12

Rajasthan High Court Grants Bail in PMLA Case Citing Prolonged Detention and Article 21 Rights

Jaipur: The High Court of Rajasthan, Jaipur Bench, presided over by Justice Uma ShankerVyas , has granted bail to Shahnawaz Ahmed Jeelani in a money laundering case, emphasizing that prolonged pre-trial detention infringes upon the fundamental right to a speedy trial under Article 21 of the Constitution, even in cases governed by stringent provisions like Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA). The court delivered its judgment on April 22, 2025, after reserving it on April 8, 2025.

Case Background

The petitioner, Shahnawaz Ahmed Jeelani , filed his third bail application (CRLMB No. 1325/2025) in connection with a complaint (No. 03/24) arising from ECIR No. JPZO/11/2020, registered by the Directorate of Enforcement (ED) for offences under Sections 3 and 4 of the PMLA.

The prosecution alleged that the main accused, Mahmood Khan , along with co-accused, defrauded foreign nationals by promising loans at cheap rates, collecting processing fees, advance fees, and attorney fees through shell firms, and then laundered the illicit money. Jeelani was accused of operating a call center with the main accused and laundering approximately ₹3 crore by transferring the amount to his wife and mother-in-law. He had been in custody since June 28, 2023, with an actual incarceration period of over 18 months after deducting a period of interim bail.

Arguments Presented

Petitioner's Counsel, Mr. Neeraj Sharma , argued: * The petitioner is innocent and has been in custody for a significant period (since June 28, 2023). * Charges have not yet been framed, and the trial is unlikely to conclude in the near future, with 18 prosecution witnesses and 6811 pages of documentary evidence. * Co-accused Rafiq Khan , whose case is similar (alleged laundering of ₹3.25 crore), has been granted bail by the Supreme Court. Another co-accused, Viraj , also received bail from the apex court. * The stringent twin conditions for bail under Section 45 of the PMLA do not override the constitutional safeguards under Article 21 (right to life and personal liberty, including speedy trial). * Supreme Court precedents like Manish Sisodia vs. Directorate of Enforcement and V. Senthil Balaji vs. Dy. Director, Directorate of Enforcement establish that Constitutional Courts (High Courts under Article 226 and Supreme Court under Article 32) can grant bail in cases of prolonged incarceration, even if Section 45 conditions are not strictly met.

Respondent's Counsel, Mr. Akshay Bhardwaj and Mr. Rajat Sharma for ASG Mr. R.D. Rastogi, contended: * The High Court is not competent to grant bail unless the twin conditions under Section 45 of PMLA are satisfied, citing Vijay Madanlal Choudhary & Ors. vs. Union of India & Ors. * The petitioner allegedly submitted forged medical documents for interim bail extension, and an application under Section 340 Cr.P.C. (now Section 379 BNSS) is pending. * There has been no substantial change in circumstances since the first bail application was rejected on April 30, 2024.

Court's Analysis and Legal Precedents

Justice Vyas meticulously examined the arguments and legal precedents. The court noted that its earlier view during the first bail rejection – that only the Supreme Court under Article 142 could grant bail if Section 45 PMLA conditions weren't met – required reconsideration in light of subsequent Supreme Court clarifications.

Evolution of Jurisprudence on PMLA Bail: The court highlighted key Supreme Court rulings:

* Manish Sisodia vs. Directorate of Enforcement (2024 SCC Online SC 1920): The Supreme Court clarified that bail was granted due to the violation of Article 21 (prolonged incarceration), not by exercising extraordinary powers under Article 142.

* Padam Chand Jain vs. Enforcement Directorate (MANU/SCOR/07119/2025): Reiterated the Manish Sisodia principle, stating, "The twin conditions under Section 45 of the PMLA cannot override the constitutional safeguards, as provided under Article 21 of the Constitution of India. This Court has held that a prolonged incarceration cannot be permitted to be converted pre-trial detention into a sentence without trial."

* Union of India Vs. K.A. Najeeb ((2021) 3 SCC 713): In a UAPA case (with similar stringent bail conditions), a larger bench of the Supreme Court held that statutory restrictions on bail "will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence." This was to safeguard against violation of the constitutional right to a speedy trial.

* V. Senthil Balaji vs. Dy. Director, Directorate of Enforcement (2024 SCC Online SC 2626): The Supreme Court affirmed that where an accused has been in custody for a long time, the trial is delayed, and there's no prospect of early completion, Constitutional Courts can exercise powers under Article 32 or 226 to grant bail, notwithstanding PMLA's Section 45. The court observed, "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... concluding within a reasonable time."

The High Court noted that these precedents clearly establish that if a speedy trial, a fundamental right under Article 21, is being infringed due to prolonged custody and trial delays with no near prospect of conclusion, Constitutional Courts are empowered to grant bail.

Distinguishing Respondent's Citations: The court addressed the ED's reliance on The Union of India through The Assistant Director, Directorate of Enforcement vs. Kanhaiya Prasad (2025 SCC Online SC 306) , where bail was cancelled. It referred to the later Supreme Court decision in Udhaw Singh Vs. Enforcement Directorate (2025 SCC Online SC 357) , which clarified that in Kanhaiya Prasad , the custody was only seven months, and key precedents like K.A. Najeeb and V. Senthil Balaji were perhaps not brought to the bench's notice. In Udhaw Singh , bail was granted after 1 year and 2 months of custody with minimal trial progress.

Changed Circumstances and Parity

The court found that several changed circumstances justified granting bail:

1. Evolution in Legal Position: Clarity from the Supreme Court that High Courts can grant bail under Article 226 on grounds of Article 21 violation, even in PMLA cases.

2. Increased Custody Period: The petitioner's incarceration had increased by nearly a year since the first bail rejection.

3. Parity with Co-accused: Co-accused Rafiq Khan , facing similar allegations, was granted bail by the Supreme Court considering prolonged custody and unlikely trial completion.

4. Trial Status: Charges were yet to be framed, and the trial had not commenced.

Stance on Alleged Misconduct

Regarding the ED's allegation of forged medical documents for interim bail, the court observed that an application under Section 379 BNSS (old S.340 CrPC) was pending, and no court had yet made a conclusive finding of forgery. Therefore, this could not be the sole basis for rejecting the bail application at this stage.

Final Decision and Bail Conditions

Considering the prolonged incarceration of over 18 months, the unlikelihood of the trial concluding soon (given 18 witnesses and voluminous documents), the grant of bail to a similarly placed co-accused by the Supreme Court, and the evolved legal position on Article 21 vis-à-vis PMLA Section 45, the court deemed it appropriate to grant bail.

The court allowed the third bail application of Shahnawaz Ahmed Jeelani , ordering his release on furnishing a personal bond of ₹5,00,000 with two solvent sureties of ₹2,50,000 each, subject to conditions including: * Appearing before the trial court on all fixed dates. * Not leaving India without prior permission of the trial court.

This judgment reinforces the judiciary's commitment to protecting the fundamental right to a speedy trial and preventing indefinite pre-trial detention, even under special enactments like the PMLA.