When Trial Is Nowhere in Sight, Section 45 Cannot Be Used to Justify Prolonged Incarceration: Delhi High Court Grants Bail in ₹539 Cr PMLA Case

“The Court cannot allow Section 45(1)(ii) to become an instrument of continued detention where the trial has not even begun”, - In a powerful affirmation of personal liberty and the right to a speedy trial, the Delhi High Court on 7th May 2025 granted bail to Paramjeet, a software engineer turned director accused in a ₹539 crore money laundering case linked to M/s Sunstar Overseas Ltd. The Court held that Section 45 of the PMLA, with its stringent twin bail conditions, cannot override Article 21 of the Constitution, especially when the trial is stagnating. Justice Amit Sharma observed: “Restrictions under Section 45(1)(ii) of the PMLA must not be allowed to become instruments for continuing incarceration in perpetuity.”

The ruling comes at a time when investigative agencies have been under scrutiny for prolonged detentions under financial crime statutes without substantive trial progress.

“Twin Conditions Must Bend Before Constitutional Mandates of Fairness and Speedy Trial”

While the Enforcement Directorate resisted bail citing the bar under Section 45(1)(ii), the Court categorically rejected the argument that statutory stringency could eclipse constitutional rights. Citing V. Senthil Balaji v. ED, the Court reaffirmed:

“Constitutional Courts must ensure that pre-trial incarceration does not become punitive… when trial is nowhere in sight, bail becomes not just permissible but necessary.”

The Court noted that the petitioner, arrested on 1st July 2024, had been in jail for over 10 months without a single witness being examined in the PMLA trial. Further, the predicate offence trial—based on a 2020 CBI FIR—was also in its infancy. The Court cautioned that if statutory rigour is applied mechanically in such cases: “It would amount to defeating the very essence of Article 21—liberty cannot be sacrificed at the altar of investigation inertia.”

“Selective Arrests Show Investigative Bias—ED’s Discretion Cannot Be Arbitrary”
The Court took particular note of the selective manner of arrests made by the ED. Though Paramjeet was allegedly involved in executing sham financial documents, the prime beneficiary of the funds, Rohit Aggarwal, had not been arrested. The Court remarked:

“Even Ajay Soni, who executed the same documents and served as Director, has been cited only as a witness. It appears the petitioner has been singled out.”

Further, the petitioner was not even named in the CBI charge sheet, which forms the predicate offence. Yet he alone was arrested and incarcerated under the PMLA. The Court warned: “If the principal conspirators roam free while secondary actors remain in jail, the fairness of prosecution stands seriously undermined.”

“Maximum Sentence Under PMLA Is 7 Years—Bail Cannot Be Denied Indefinitely”
The Court underscored that the maximum sentence under the relevant PMLA offence is seven years, and observed that no direct financial gain by the petitioner had been shown. Despite the voluminous evidence—98 prosecution witnesses in predicate offence, 26 in PMLA complaint, and over 600 documents—the Court held:

“No trial of such magnitude can conclude within any foreseeable timeframe. Prolonged incarceration in such circumstances is not legally sustainable.”

Even the documents forming the basis of the laundering allegations, including facility agreements and invoices, were subject to ongoing arbitration, indicating commercial and civil complexity, not clear-cut criminality.

Granting regular bail with suitable conditions, the Delhi High Court sent a strong signal that financial crime statutes must be interpreted in line with constitutional guarantees. While affirming the seriousness of money laundering, the Court cautioned against using pre-trial detention as a substitute for evidence-based adjudication.

“Bail is the rule and jail the exception—even under PMLA, this constitutional presumption survives unless compelling justification is shown.”

The judgment stands as a reminder that even in complex economic offences, investigative power must yield to procedural fairness and personal liberty.

Date of Decision: 7 May 2025