Court holds that while ED has prima facie material, prolonged pre-trial detention cannot become punitive; Article 21 and Section 436A CrPC weighed in favour of release.
The Delhi High Court has granted regular bail to Masasasong Ao in a money laundering case arising out of ECIR No. HQ-09/STF/2021, observing that his continued detention for nearly four years, despite the trial making little progress, would amount to punitive pre-trial incarceration.
Justice Sanjeev Narula allowed the bail plea in a complaint filed by the Enforcement Directorate under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The Court noted that the ED had material requiring trial, but found that the investigation qua the applicant was complete, the relevant financial records were already in the possession of the agencies, and there was no material to suggest that he was likely to abscond, re-offend, or interfere with the trial.
The case stems from an FIR registered in 2019 and later taken over by the National Investigation Agency (NIA), involving allegations of extortion, illegal taxation, and terror funding linked to NSCN(IM). The ED’s money laundering case was based on the predicate offences. According to the prosecution, funds were routed through multiple bank accounts to project them as untainted. The applicant was accused of actively handling and moving funds, including withdrawals, deposits, and transfers allegedly made at the instance of co-accused Alemla Jamir.
However, the Court said that at the stage of bail it was not required to decide the merits conclusively. Referring to Supreme Court precedents, it held that the twin conditions under Section 45 of the PMLA are mandatory, but the expression “reasonable grounds for believing” must be assessed on broad probabilities and not through a detailed trial-like examination.
A significant factor in the decision was the applicant’s long custody. The Court recorded that he had been in jail since 18 October 2022 and had already undergone more than half of the maximum possible sentence of seven years under Section 4 of the PMLA. The Court also noted that only five of the 27 prosecution witnesses had been examined, and the trial was nowhere near completion.
Justice Narula relied on Section 436A of the CrPC and constitutional protections under Article 21, observing that prolonged incarceration cannot be allowed to assume a punitive character. The Court also referred to recent Supreme Court rulings, including Ajay Ajit Peter Kerkar, Prem Prakash, and Arvind Dham, to hold that statutory restrictions under the PMLA may yield when custody becomes excessive and the trial is unlikely to conclude within a reasonable time.
The Court further observed that no comparable delay was attributable to the applicant and that the risk of tampering with evidence was low since the documentary material was already secured. While noting the seriousness of the allegations, the Court said seriousness alone cannot justify indefinite custody.
Accordingly, the bail application was allowed, subject to conditions including furnishing a personal bond of Rs. 50,000 with one surety, surrender of passport, restriction on travel, cooperation with investigation, regular appearance before the trial court, and a prohibition on influencing witnesses or committing any offence while on bail.
Bottom Line :
Bail under Prevention of Money Laundering Act, 2002 (PMLA) - Application allowed considering prolonged custody, constitutional right to speedy trial under Article 21, and absence of evidence suggesting likelihood of re-offending or interference with trial.
Statutory provision(s): Sections 3 and 4, Prevention of Money Laundering Act, 2002, Section 45, Prevention of Money Laundering Act, 2002, Section 436A, Code of Criminal Procedure, 1973, Article 21, Constitution of India, Sections 120B, 201, 384, 465, 467, Indian Penal Code, 1860, Sections 17, 18, 20, 21, Unlawful Activities (Prevention) Act, 1967, Section 479(2), Bharatiya Nagarik Suraksha Sanhita, 2023
Masasasong Ao v. Directorate of Enforcement, (Delhi) : Law Finder Doc id # 2985228
