Strong Suspicion Sufficient to Frame Charges; Court Cannot Conduct Mini-Trial at Discharge Stage: Jharkhand High Court

“The court is not expected to go deep into the probative value of the material on record. What needs to be considered is whether there is a ground for presuming that the offence has been committed... Even strong suspicion founded on material would justify the framing of charge.”— In a seminal ruling, the High Court of Jharkhand at Ranchi, comprising Justice Sujit Narayan Prasad, dismissed the criminal revision petitions challenging the framing of charges in a high-profile money laundering case linked to the bitumen scam.

The Bitumen Scam and the Money Trail

The case stems from a predicate offence investigated by the CBI regarding the submission of fake and forged invoices for the procurement of bitumen. The petitioner, Mahesh Mehra, a Director of M/s Kaushalya Infrastructure Development Corporation Limited (KIDCL), was accused of conspiring to submit 26 fake invoices worth Rs. 1,08,95,583/- to the Road Construction Department (RCD), Government of Jharkhand. The Enforcement Directorate (ED) alleged that these funds, identified as "proceeds of crime," were layered and integrated into the financial system through subsidiary companies, including M/s Kaushalya Township Pvt. Ltd. and M/s Bengal KDC Housing Development Ltd., which were effectively controlled by the petitioner.

The petitioner approached the High Court challenging the orders of the Special Judge, PMLA, Ranchi, which had rejected his discharge application and subsequently framed charges under Section 3 read with Section 70 of the Prevention of Money Laundering Act (PMLA), 2002. The defense argued that the petitioner was not the maker of the invoices and that the subsidiary companies were not named in the scheduled offence.

“To constitute any property as proceeds of crime, it must be derived or obtained directly or indirectly by any person as a result of criminal activity relating to a scheduled offence.”

No Mini-Trial at the Stage of Discharge

Justice Prasad, in a detailed judgment, underscored the limited scope of revisional jurisdiction when challenging the framing of charges. Relying on landmark Supreme Court precedents, including Union of India v. Prafulla Kumar Samal and State of Tamil Nadu v. N. Suresh Rajan, the Court held that at the stage of Section 227/239 of the CrPC (now corresponding sections in BNSS), the trial court is not required to weigh evidence as if it were conducting a trial.

The Court observed that the judge must merely sift through the evidence to find sufficient grounds for proceeding. If the material discloses grave suspicion against the accused which has not been properly explained, the court is fully justified in framing charges. The High Court explicitly stated that a "mini-trial" is impermissible at this nascent stage, and the defense of the accused cannot be looked into meticulously before the trial commences.

“The law does not permit a mini trial at this stage... If the court thinks that the accused might have committed the offence on the basis of the materials on record on its probative value, it can frame the charge.”

Vicarious Liability and the Definition of Proceeds of Crime

Addressing the petitioner's argument regarding the lack of direct involvement, the Court highlighted the expansive definition of "proceeds of crime" under Section 2(1)(u) of the PMLA, especially following the 2019 explanation which covers property derived "directly or indirectly" from criminal activity. The Court noted that the investigation revealed a clear money trail where funds generated from the fake invoices were invested in sister concerns managed by the petitioner.

The Court also invoked Section 70 of the PMLA, which deals with offences by companies. It was held that as a key Director involved in the day-to-day affairs of the parent and subsidiary companies, the petitioner could not absolve himself of liability. Citing the Supreme Court’s ruling in Pavana Dibbur v. Directorate of Enforcement, the High Court reiterated that a person need not be named in the scheduled offence to be prosecuted under the PMLA, provided they are involved in the process or activity connected with the proceeds of crime.

“Economic offences having deep-rooted conspiracies and financial ramifications require thorough trial... Discharge at nascent stage impermissible.”

Judicial Restraint in Economic Offences

The Court concluded that economic offences constitute a class apart and need to be viewed with a strict approach. Citing Pradeep Nirankarnath Sharma v. Directorate of Enforcement (2025), the Bench observed that discharging an accused at a preliminary stage in cases involving serious financial implications and deep-rooted conspiracies would be premature and contrary to the legislative intent of the PMLA.

Finding no patent illegality or jurisdictional error in the Special Court's decision to frame charges, the High Court dismissed the revision petitions, paving the way for the trial to proceed.

Date of Decision: 07/01/2026