Court emphasizes protection of personal liberty under Article 21, imposes stringent conditions on bail in case involving alleged money laundering worth over Rs. 288 crore
In a significant decision delivered on September 30, 2026, the Karnataka High Court granted regular bail to accused Robin Khandelwal and another in a high-profile money laundering case registered under the Prevention of Money Laundering Act, 2002 (PMLA). The case, initiated by the Directorate of Enforcement (ED) in 2021, involved allegations of laundering proceeds amounting to over Rs. 288 crore. The court's order marks a crucial reiteration of the principle that prolonged incarceration without trial violates the fundamental right to personal liberty under Article 21 of the Constitution of India.
The accused, who had been arrested on May 8, 2026, were facing charges under Sections 3 and 4 of the PMLA. Notably, both petitioners had been on bail in predicate offenses related to the case, had cooperated fully with the investigation, and had appeared consistently before the trial court when summoned. The investigation was extensive, culminating in a prosecution complaint filed on July 6, 2026. However, the court observed that the case was still at the pre-cognizance stage, with voluminous documentary evidence (over 8,000 pages) and ten witnesses cited, indicating that the trial was unlikely to conclude within a reasonable timeframe.
The defense, led by Senior Counsel Sandesh J Chouta, underscored that the petitioners' continued incarceration was unwarranted given their cooperation and the prolonged delay in trial proceedings. The petitioners had also been granted bail in earlier related cases, and there was no evidence that they had misused their bail in the predicate offenses. The ED opposed the bail, citing concerns that the accused might misuse the liberty to tamper with evidence or shift the proceeds of crime. However, the court found this apprehension unsubstantiated since the accused were not arrested for nearly five years after the initial predicate offenses and had not been involved in any fresh criminal cases during that period.
The learned judge, Mr. S. Vishwajith Shetty, J., referred extensively to precedents set by the Supreme Court of India in landmark cases such as P. Chidambaram v. Directorate of Enforcement (2020), Manish Sisodia v. Directorate of Enforcement (2024), V. Senthil Balaji v. Deputy Director, Directorate of Enforcement (2024), and Arvind Dham v. Directorate of Enforcement (2026). These rulings emphasized that stringent bail conditions under the PMLA cannot justify prolonged detention when the trial is delayed, especially when the evidence is primarily documentary and in the possession of the prosecution.
Further, the court highlighted that while PMLA imposes a higher threshold for granting bail under Section 45, this cannot be a tool for unreasonable incarceration, especially when the maximum punishment is seven years. It also noted that the constitutional courts have the jurisdiction and discretion to grant bail when prolonged custody infringes on the accused's fundamental rights.
The court granted bail to the petitioners subject to strict conditions, including execution of a personal bond of Rs. 1,00,000 each with two sureties, regular appearance before the trial court, prohibition on tampering with witnesses, refraining from similar offenses, and not leaving the trial court's jurisdiction without permission.
This judgment reaffirms the balance between enforcing anti-money laundering laws and safeguarding constitutional rights, underscoring that procedural delays cannot be leveraged to deny bail unjustly.
Bottom Line:
Prevention of Money Laundering Act, 2002 - Regular bail granted to accused under Sections 3 and 4 - Where accused were on bail in predicate offences, had cooperated in investigation, complaint had been filed, case was at pre-cognizance stage, evidence was primarily documentary, and trial was not likely to conclude within a reasonable time - Stringent conditions under Section 45 PMLA cannot justify prolonged incarceration offending Article 21.
Statutory provision(s):
Prevention of Money Laundering Act, 2002 Sections 3, 4, 45; Bharatiya Nagarik Suraksha Sanhita, 2023 Section 483; Constitution of India Article 21
Robin Khandelwal v. Directorate of Enforcement, (Karnataka) : Law Finder Doc Id # 2994732
