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Synopsis

The Supreme Court has granted bail to a man arrested by Enforcement Directorate (ED) in a money laundering case, citing his 14-month incarceration and no near-term trial completion.

A bench of Justices Abhay S Oka and Ujjal Bhuyan relied upon the previous judgments in case of V Senthil Balaji and Union of India (2024) and Union of India Vs K A Najeeb (2021), while distinguishing it with a recent judgment in the case of Union of India through the Assistant Director Vs Kanhaiya Prasad (2025).

Appellant Udhaw Singh was arrested on December 21, 2023, for the offence under Section 3 of the Prevention of Money Laundering Act, 2002.

"There are 225 witnesses cited, out of which only one has been examined. Therefore, the trial is not likely to be concluded within few years. Hence, a decision of this Court in the case of V Senthil Balaji Vs Deputy Director, Directorate of Enforcement will apply," the bench said.

The court had, in Senthil Balaji case, held, "When the trial of the complaint under PMLA is likely to prolong beyond reasonable limits, the Constitutional Courts will have to consider exercising their powers to grant bail. The reason is that Section 45(1)(ii) does not confer power on the State to detain an accused for an unreasonably long time, especially when there is no possibility of trial concluding within a reasonable time."

The extraordinary powers, as held in the case of Najeeb can only be exercised by the Constitutional Courts, the court had said.

The court had then also said 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.

If the appellant's detention is continued, it will amount to an infringement of his fundamental right under Article 21 of the Constitution of India of speedy trial, the court had then said.

During the hearing in the instant case, the court's attention was invited to a decision of a coordinate bench in the case of Kanhaiya Prasad.

In that judgment, a bench of Justices Bela M Trivedi and Prasanna B Varale had said there remains no shadow of doubt that the consideration of the two conditions mentioned in Section 45 of the Prevention of Money Laundering Act is mandatory, and the said rigours have to be reckoned by the court to uphold the objectives of the law while considering the bail application.

In this matter, the bench, however opined, there was no departure made from the law laid down in the case of Najeeb and Senthil Balaji.

"We find that this was a case where the decisions of this court in the case of Najeeb and in the case of Senthil Balaji were not applicable on facts. Perhaps that is the reason why these decisions were not placed before the coordinate bench," the bench said.

The court also pointed out the respondent-accused therein was arrested on September 28, 2023 and the high court granted him bail on May 6, 2024. He was in custody for less than seven months before he was granted bail. There was no finding recorded that the trial was not likely to be concluded in a reasonable time. In the facts of the case, the apex court cancelled the bail granted by the high court, the bench highlighted. 

Solicitor General Tushar Mehta also submitted that in the facts of the case, the decision in the case of Senthil Balaji may be followed.

The court thus ordered the Special judge to release the appellant on bail with appropriate terms and conditions.

Udhaw Singh, alias Sonu Singh, was formally put under arrest on December 21, 2023 in connection with an ongoing investigation under the provisions of the money laundering case of Shine City Fraud in Uttar Pradesh.

ED initiated an investigation based on approximately 250 FIRs registered by Uttar Pradesh Police against Rasheed Naseem and Shine City Group of Companies, wherein they had collected a huge amount of money approximately Rs 800-1000 crore from the public in the name of investment and promised huge returns on the investment and finally cheated the public/investors by way of committing fraud.

Case Title: Udhaw Singh Vs Enforcement Directorate