The Supreme Court of India has held that the statutory twin conditions for bail under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) cannot override the fundamental constitutional safeguards under Article 21 against prolonged incarceration. A bench comprising Justice Aravind Kumar and Justice Vipul M. Pancholi set aside an order of the High Court of Calcutta and granted regular bail to Sanjay Sureka alias Sanjay Kumar Sureka in a money laundering case involving alleged proceeds of crime exceeding Rs. 6,210 crore. While clarifying that a five-day delay by the Enforcement Directorate (ED) in transmitting arrest documents to the Adjudicating Authority does not vitiate an arrest under Section 19(2) of the PMLA, the court ruled that indefinite pre-trial detention cannot be justified where trial completion will take considerable time.
Background of the Case
The proceedings trace back to the Corporate Insolvency Resolution Process (CIRP) initiated against M/s. Concast Steel and Power Limited on November 7, 2017, which eventually concluded with the company entering liquidation. On October 8, 2021, the Liquidator filed an application under Sections 43, 45, and 66 of the Insolvency and Bankruptcy Code, 2016 (IBC), alleging fraudulent and avoidable transactions by the company’s management. The National Company Law Tribunal (NCLT) dismissed the application, and the dismissal was not challenged.
Subsequently, on September 6, 2022, the Central Bureau of Investigation (CBI) registered an FIR under Sections 120B, 420, and 477A of the Indian Penal Code, 1860, read with Sections 13(1)(d) and 13(2) of the Prevention of Corruption Act, 1988. Nearly fifteen months later, on March 24, 2023, the ED registered an Enforcement Case Information Report (ECIR) against the appellant and four others.
According to the ED, the appellant orchestrated a complex web of financial transactions to artificially inflate company turnover, fraudulently secure credit facilities from a State Bank of India-led consortium, and divert funds for personal enrichment. The agency alleged that out of Rs. 6,210.72 crore in proceeds of crime, only Rs. 777.10 crore had been attached. The appellant had allegedly set up 62 shell companies, appointed 34 dummy directors, and engaged 20 companies manned by relatives. The ED arrested the appellant on December 18, 2024.
Submissions of the Parties
Appealing against the Calcutta High Court’s order of November 14, 2025, counsel for the appellant argued that the arrest was vitiated due to non-compliance with Section 19(1) and Section 19(2) of the PMLA, rendering Section 45 inapplicable. Specifically, counsel pointed out a five-day delay in forwarding the arrest order and supporting material to the Adjudicating Authority. It was further contended that the “Grounds of Arrest” and “Reasons to Believe,” dated November 18, 2024, were virtually identical except for cosmetic variations in the concluding paragraphs, reflecting non-application of mind, and that the appellant was never interrogated while in custody.
On the trial’s timeline, the appellant submitted that the ED filed the primary prosecution complaint on February 15, 2025, stating that investigation qua the appellant was complete. However, supplementary prosecution complaints followed on July 11, 2025, and July 1, 2026. Cumulatively, the three complaints involve 97 accused persons, 48 prosecution witnesses, and approximately 15,000 pages of relied-upon documents, while investigation remains pending regarding other accused. Having already undergone over 20 months in custody out of a maximum prescribed sentence of seven years, the appellant argued that the trial could not conclude within a reasonable period, citing precedents including Union of India v. K.A. Najeeb, Arvind Dham v. Directorate of Enforcement, Basudeb Bagchi & Anr. v. Enforcement Directorate, Arvind Walia v. Directorate of Enforcement & Anr., and Padam Chand Jain v. Enforcement Directorate.
Opposing the plea, the Directorate of Enforcement submitted that the appellant was produced before the Special Court within 24 hours and that the challenge under Section 19(2) was misconceived. The agency maintained that post-arrest procedural compliance cannot be elevated to a pre-remand sanction requirement, and that a five-day transmission period does not automatically invalidate an arrest. The ED argued that similarity between grounds of arrest and reasons to believe caused no prejudice, the core safeguards under Section 19(1) were satisfied, the case involved a grave economic offence exceeding Rs. 6,210.72 crore, and the appellant was involved in over 444 cases.
The Court’s Analysis
Addressing the balance of rights in bail adjudications, the bench observed:
“In a bail matter, especially in serious offences, the job of a Court is to balance the rights of the State with those of the Arrestee. In special laws such as PMLA, 2002, the conditions for granting bail are stringent, and the circumstances in which bail can be granted are rare, for the simple reason that economic offences of a large magnitude punch a whole through the financial fabric of the country, causing a top-down ripple effect into the entire eco-system resulting in large consequences for most of the population. That is the justification for making the provisions of PMLA stringent. In the same breath, sight must not be lost of the fact that the institutions have a duty to expeditiously investigate the cases, or else the justification to keep an accused person under custody for an indefinite period of time. Process must not be turned into a punishment unto itself.”
On the procedural legality of the arrest, the court rejected the appellant’s contention that a five-day delay in forwarding materials to the Adjudicating Authority rendered the arrest illegal. The bench noted that the statute requires the transmission to take place “immediately,” which does not mandate a rigid 24-hour window:
“The word ‘immediately’ does not mean within 24 hours or within a set time limit, it means that the material has to be transferred expeditiously and simultaneously. When the records of the case run into thousands of pages, it is natural for the arresting officer to require some time to forward the same. Again, this time cannot be strictly defined, but as long as the forwarding of the material is simultaneous with the arrest, with no delay, except for that which is absolutely necessary, the same cannot be said to be falling foul of Section 19(2) of the Act. Practicalities must not be rendered otiose.”
Turning to the duration of custody, the court concurred with the appellant that the magnitude of the trial rendered its prompt conclusion impossible. The appellant had spent over 20 months in custody for an offence carrying a maximum seven-year term, and the investigation against him was already complete.
Directly discussing constitutional bounds, the court ruled:
“The twin conditions under Section 45 of the PMLA cannot override the constitutional safeguards under Article 21 of the Constitution, as has been held in the case of Manish Sisodia v. Directorate of Enforcement. Prolonged incarceration, if allowed to continue, will set at naught the constitutional safeguards extended to the accused persons.”
Decision and Bail Conditions
Observing that examining thousands of pages and around 98 witnesses would make trial culmination a lengthy process, the Supreme Court directed the release of the appellant on regular bail, subject to furnishing bail bonds to the satisfaction of the trial court.
The court imposed conditions requiring the appellant to deposit his passport with the trial court, refrain from leaving India without prior permission, and avoid tampering with evidence or influencing witnesses. The bench cautioned that any breach would entitle the trial court to cancel the bail, while clarifying that these observations are not findings on the merits of the case.
Case Title: Sanjay Sureka @ Sanjay Kumar Sureka v. Directorate of Enforcement
Case No.: Criminal Appeal No(s). 4904 of 2026
Bench: Justice Aravind Kumar and Justice Vipul M. Pancholi
Date: October 14, 2026
