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by Admin
05 December 2025 4:19 PM
“Sufficiency or adequacy of material on which the officer forms belief cannot be subject to judicial review” — In a judgment of considerable significance for enforcement actions under the Prevention of Money Laundering Act, 2002 (PMLA), the Calcutta High Court dismissed the bail plea of businessman Sanjay Surekha @ Sanjay Kumar Surekha, who is accused of masterminding a ₹6210.72 crore money laundering conspiracy through a complex network of shell companies and benami assets. The judgment delivers an authoritative ruling on the legal thresholds under Section 19 of PMLA, the independent nature of PMLA proceedings, and the non-applicability of bail in cases failing to meet the twin conditions under Section 45 of the Act.
Justice Suvra Ghosh, while rejecting the petitioner’s contention regarding procedural violation in arrest and undue delay in forwarding the arrest material to the Adjudicating Authority, held that “the arresting officer has recorded the grounds of arrest as well as his reasons to believe that the petitioner is guilty… Sufficiency or adequacy of material… cannot be subjected to judicial review.”
“PMLA Is a Standalone Offence – Predicate FIR Stay Does Not Eclipse ED Action”
A central plank of the petitioner’s argument was that the scheduled offence under IPC and the Prevention of Corruption Act — registered by CBI — was stayed by a Single Judge Bench and, hence, the PMLA proceedings stood eclipsed. However, the Court found that the stay granted earlier had itself been stayed by a Division Bench, and this material fact was deliberately suppressed by the petitioner.
The Court clarified that:
“Though the ECIR is born from the FIR, they become two different documents and both tend to take shape on their own, independent of each other… The learned Single Bench’s order having been stayed, proceedings of the predicate offence are continuing.”
The Court thus rejected the argument that the PMLA case cannot proceed unless the predicate offence is fully tried, citing that PMLA operates autonomously once triggered.
“Reasons to Believe Must Be Based on Material — But Its Adequacy Is Not Justiciable”
The petitioner had argued that his arrest under Section 19(1) of the PMLA was vitiated due to absence of genuine “reasons to believe” and procedural delays in compliance under Section 19(2). Specifically, the petitioner highlighted that the material under Section 19(2) was forwarded to the Adjudicating Authority five days after arrest, rather than immediately.
However, the Court held that:
“Though the petitioner was arrested on December 18, 2024 and material was forwarded on December 23, 2024, the ‘grounds of arrest’ and ‘reasons to believe’ were communicated immediately… the Court was in a position to ascertain whether the material was already in possession of the arresting officer.”
The Court relied on precedents including Ram Kishore Arora, Arvind Kejriwal v. CBI, and Radhika Agarwal, where the Supreme Court reiterated that judicial review of sufficiency or correctness of the arresting officer’s belief is impermissible, and courts may interfere only in cases of manifest procedural violation.
Justice Suvra Ghosh emphasized:“The mandate of Section 19(1) of the Act has been sufficiently and adequately complied with by the arresting officer… Arrest cannot be said to be vitiated for non-compliance.”
“₹6210 Crore Fraud Not Minor – Shell Companies, Dummy Directors and Ongoing Laundering from Custody”
On the merits, the Court noted that the petitioner — the Chairman and Managing Director of M/s Concast Steel and Power Limited — was the central figure behind the fraudulent inflation of turnover, siphoning off funds obtained through credit facilities, and diverting the same through 62 shell companies with 34 dummy directors, many of whom were relatives and employees.
The ED also submitted that the petitioner:
Remained in contact with co-accused from custody
Funded companies involved in laundering while incarcerated
Possessed benami properties uncovered during investigation
Has 444 pending cases against him
Justice Ghosh recorded:“The conduct of the petitioner is also not very trustworthy… He is indulging in uncalled for communications/activities even from judicial custody… Investigation will be seriously prejudiced if the petitioner is released on bail at this stage.”
“Twin Conditions Under Section 45 Not Satisfied – Bail Rejected Despite Long Custody”
Although the petitioner had remained in custody since December 18, 2024, the Court held that mere duration of incarceration cannot override the gravity of offence or the statutory bar under Section 45, particularly in cases involving deep-rooted economic crimes.
The Court observed:“Investigation of economic offences involving deep rooted conspiracies and affecting the economy of the country… has to be dealt with seriously… There does not appear to be unreasonable delay in investigation.”
Relying on Vijay Madanlal Choudhary v. Union of India and several subsequent rulings, the Court ruled that the petitioner failed to demonstrate that he was not guilty or unlikely to commit further offence if released — both being mandatory under Section 45.
“Suppression of Facts, Continued Influence and Active Laundering from Custody – Bail Must Be Denied”
Apart from legal deficiencies, the Court took serious note of the petitioner’s conduct, including suppression of the Division Bench stay order and attempts to mislead the Court on the status of the predicate offence. The continued operation of companies and financial influence from custody were treated as red flags justifying continued detention.
Justice Suvra Ghosh concluded:“The petitioner does not deserve to be released on bail at this stage having regard to the fact that he has not been able to overcome the twin conditions laid down under Section 45 of the PMLA.”
The bail application was dismissed, and CRM (R) 84 of 2025 was accordingly disposed of.
Date of Decision: 14th November 2025
