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by sayum
11 February 2026 7:56 AM
"The rigours of Section 45 PMLA must melt when trial remains stagnant and custody stretches into years" — On 8th January 2026, the Himachal Pradesh High Court (Justice Virender Singh) delivered a detailed and constitutionally significant ruling in CrMP(M) No. 3038 of 2025, titled Krishan Kumar v. Directorate of Enforcement, where the Court granted regular bail to the applicant under the Prevention of Money Laundering Act, 2002 (PMLA), despite the notorious statutory hurdle of Section 45’s twin conditions, citing inordinate delay, prolonged incarceration, and parity with co-accused as determinative factors.
The Court noted emphatically that:
“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 of the scheduled offence and the PMLA offence concluding within a reasonable time.” [Para 27, citing V. Senthil Balaji v. ED, 2024 SCC OnLine SC 2626]
Bail Application Filed Under Section 483 BNSS Amid Delay in PMLA Trial on Scholarship Scam Allegations
Krishan Kumar, the applicant, had moved the High Court under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS), seeking regular bail in a money laundering case (ECIR/SHSZO/04/2019) registered by the Directorate of Enforcement, Shimla. The predicate offence arose out of an FIR registered in 2018 over alleged siphoning of government scholarships meant for SC/ST/OBC/Minority students through fraudulent educational entities.
The applicant had already spent over two years in custody in connection with both the predicate and money laundering cases. He had been previously denied bail twice by the High Court and once by the Supreme Court. However, the apex court had granted him liberty to renew the application after six months if the trial did not progress, which formed the basis for this application.
The trial was still at the pre-charge stage, with over 71 witnesses cited and more than 31,000 pages of documents forming part of the record.
Delay Not Attributable to Applicant — Twin Conditions Under Section 45 Held Satisfied
One of the central issues was whether Section 45 of the PMLA, which imposes twin conditions for bail — namely, that the court must be satisfied that the accused is not guilty and not likely to commit any offence on bail — could be relaxed in view of the prolonged custody and stagnant trial.
Justice Virender Singh observed:
“This Court is of the view that the twin conditions, as enumerated in Section 45 of the PMLA, can be said to be existing in favour of the applicant, on account of his long incarceration, by holding that, at this stage, it can be said that he is not guilty of such offence and while on bail, he will not commit any offence.” [Para 38]
Referring to the constitutional principle under Article 21, the Court ruled that:
“The applicant is in custody for more than two years... this Court is of the view that the embargo, as created by Section 45 of the PMLA, does not come in the way of releasing the applicant, on bail.” [Para 40]
The Court relied extensively on the Supreme Court's decisions in Union of India v. K.A. Najeeb (2021), V. Senthil Balaji v. ED (2024), Mahesh Joshi v. ED (2025), and Manish Sisodia v. ED (2024), which collectively establish that constitutional courts can override statutory bail restrictions where trial delay violates Article 21.
Trial Delay Is Not of Applicant’s Making — No Justification for Continued Custody
The Enforcement Directorate contended that delays were caused by the accused themselves. However, after reviewing several trial court orders dated 23rd September, 16th October, and 12th November 2025, the High Court categorically found:
“This Court is of the view that no role can be attributed to the applicant for causing delay in the trial... no fault can be found with the applicant on account of exemption applications moved by other accused persons.” [Paras 27–28]
Further, the Court noted that the predicate offence (registered by the CBI) was still at the stage of consideration on charge, with no immediate prospect of trial commencement. Citing V. Senthil Balaji, the Court reiterated:
“The existence of proceeds of crime under Section 3 PMLA can be proved only if the scheduled offence is established. Even if the PMLA trial proceeds, it cannot be finally decided unless the trial of scheduled offences concludes.” [Para 32]
Gravity of Economic Offence Not Sole Ground to Deny Bail When Trial Is Delayed
Responding to ED’s contention that serious economic offences should not warrant bail, the Court distinguished such cases from heinous crimes like terrorism or murder. Referring to Manish Sisodia v. ED, the judgment held:
“While the prosecution may pertain to an economic offence, it may not be proper to equate these cases with those punishable with death, imprisonment for life or extreme violence.” [Para 35]
The Court clarified that economic offences, while grave, cannot override the right to a speedy trial, and prolonged incarceration must be treated as punishment without trial, which is impermissible.
Successive Bail Application Was Maintainable Due to Material Change in Circumstances
Though the High Court and Supreme Court had earlier rejected bail on merits, the Court noted that:
“Now, the fact that there is no possibility regarding the commencement and conclusion of the trial... constitutes a material change in circumstances.” [Para 40]
Citing Athar Parwez v. Union of India, the Court reiterated that restrictions under statutes and constitutional protections must be harmonised, and that long custody in itself may warrant bail in appropriate cases.
Parity With Co-accused Further Tilts the Balance in Applicant’s Favour
The Court also held that the applicant was entitled to bail on the ground of parity, noting that co-accused Hitesh Gandhi and Arvind Rajta had already been granted bail by the High Court on 20th December 2025 and 5th January 2026, respectively.
“Even otherwise, the applicant is also entitled for the relief of bail on the basis of parity.” [Para 46]
Stringent Conditions Imposed to Prevent Absconding or Tampering
While granting bail, the Court imposed strict conditions to ensure the applicant's presence and integrity of the trial:
The Court also directed the Jail Superintendent and DLSA to monitor compliance and report if the applicant fails to furnish bail bonds within one month.
This decision reflects a measured yet decisive application of constitutional jurisprudence, where statutory bail restrictions under PMLA have been held subordinate to the right to personal liberty under Article 21, especially in cases of prolonged incarceration and no prospect of early trial. Importantly, the Court reiterated that:
“Stringent bail provisions cannot be tools of indefinite pre-trial detention. Bail is the rule, jail the exception.” [Para 53 of Manish Sisodia v. ED cited]
The judgment affirms that the liberty of an undertrial cannot be sacrificed at the altar of investigational delays, particularly in economic offences where the evidence is largely documentary and trials take years.
Date of Decision: 8 January 2026
