Arvind Dham v. Directorate of Enforcement | 2026 INSC 12

The PMLA prosecution and request for release

The appellant challenged the refusal of regular bail in a prosecution arising from alleged diversion of bank funds through companies associated with the Amtek group, after Enforcement Directorate cases had followed predicate allegations reported by two banks. The Supreme Court considered whether the restrictions attached to bail under Section 45 of the Prevention of Money Laundering Act, 2002 could justify continuing custody when investigation concerning the appellant was complete, trial had not begun and the projected proceeding involved a large body of documentary material.

The underlying allegations referred to claimed fraud against public sector banks and a scheme of layered transactions said to have benefited the appellant, who had previously held senior positions in group companies. The judgment recorded criminal cases, Enforcement Case Information Reports, an initial prosecution complaint against individuals and companies, and a later supplementary complaint, while leaving the truth of the alleged diversion to be tested in the criminal process.

The two bank reports concerned alleged losses of approximately ₹385.35 crore and ₹289 crore, while a separate proceeding had raised wider claims about alleged group lending and diversion. The differing figures and scope of those matters show why the Court treated the underlying financial accusations as serious but did not convert the bail hearing into a final accounting of every transaction or the appellant's ultimate responsibility for it.

The appellant appeared in response to summons under Section 50 of the PMLA before his arrest in July 2024 and was subsequently included in the prosecution complaint. The Special Judge and High Court rejected bail, leading to an appeal in which approximately sixteen months and twenty days of custody had elapsed by the time of the Supreme Court's examination.

The agency had also conducted a search at his residence after his first recorded appearance, and the prosecution complaints eventually named additional individuals and companies. The development of the case through a supplementary complaint mattered to the likely timetable, because a record expanding beyond the original charges would require scrutiny before the witnesses and documents could be addressed at trial.

The statutory and constitutional questions

The application was presented under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 with Section 45 of the PMLA. The Court did not treat the statutory bail restrictions as irrelevant, but examined how their application must coexist with the right to a speedy trial under Article 21 of the Constitution when detention begins to approximate punishment before the accusation has been decided.

The appellant invoked age, illness, cooperation, the completion of investigation in relation to him and the scale of material that would have to be examined before the trial could reach a conclusion. The agency answered that the allegations involved serious economic wrongdoing, that release might enable influence over a witness or dissipation of assets, and that the appellant should not be exempted from Section 45 merely because time in custody had accrued.

The competing accounts about sums involved in the alleged bank fraud also required care. The appellant disputed a much larger figure invoked against him, whereas the Court's bail reasoning did not adjudicate the final amount of wrongful loss or determine ownership and movement of every asset, which remained matters for the prosecution to establish through evidence.

The appellant further said he had not evaded summons, could be reached through ordinary bail conditions and no longer needed to be questioned while in custody. Those assertions were assessed against the agency's contrary concerns rather than simply accepted, but the recorded appearances and completed investigation gave them a factual connection to the necessity question the Court ultimately answered.

Why duration and progress of trial mattered

The Supreme Court explained that economic offences differ in their conduct and degree, making it inappropriate to place them all in one class and refuse bail merely because of that broad label. Gravity remained a relevant circumstance to be evaluated with the statutory objective, the possible sentence and other facts, but it could not override Article 21 without examining what continued custody would mean for a person still awaiting trial.

Earlier decisions considered by the Court recognised that even demanding statutory bail conditions cannot authorise indefinite pretrial incarceration. The decisive concern was whether a trial could realistically begin and end in reasonable time, since a stringent condition directed to the release decision does not extinguish the constitutional protection against a prosecution whose delay converts custody into practical punishment.

The record showed two complaints encompassing numerous accused, more than two hundred proposed witnesses and a very large collection of relied upon documents. Cognizance had not been taken on the prosecution complaint and scrutiny of documents continued, which made an early commencement unlikely even before considering how long the evidence would take to complete once trial began.

Although the agency suggested that only a small subset of its documents would be needed to show the alleged loss, the Court considered the proceeding as it actually stood, with a sizeable witness list and an incomplete preliminary stage. A prediction that the prosecution could later narrow its evidence did not establish that commencement had become imminent or that the already elapsed custody would remain proportionate throughout the trial.

The Court considered the maximum possible sentence of seven years in the present PMLA prosecution alongside the period already spent in custody. That comparison did not create a fixed fraction of sentence that automatically triggers bail, but informed whether continued detention remained a proportionate response when the trial lacked any realistic near term prospect of reaching judgment.

Why the source of delay was important

The agency maintained that the appellant had contributed to the delayed proceedings, but the Court examined a specific procedural episode after the Special Judge issued notice to proposed accused persons. It found that the Enforcement Directorate itself had challenged that order in the High Court, obtaining an interruption of proceedings lasting approximately eight months before withdrawing its challenge, so the identified period could not properly be attributed to the appellant.

This finding mattered because a person seeking constitutional relief from prolonged custody cannot rely in the same way on delay substantially caused by that person's own conduct. The Court's assessment instead placed responsibility for a significant part of the stalled progress with the prosecuting agency, reinforcing the conclusion that the appellant should not remain detained simply because the proceeding had not moved forward.

The agency referred to a later request for day to day hearing, but the Court found no record showing its fate after roughly three further months. An application seeking quicker trial therefore did not itself establish that cognizance, examination of witnesses or completion of the case was actually imminent.

The agency also proposed that, if bail was not refused outright, the appellant could simply renew his application after another six months. The Court instead assessed the existing constitutional problem on the material before it, since postponing examination of prolonged custody would not make an uncommenced, complex trial move forward in the meantime.

The record also showed that an interim release had previously been granted for medical reasons, while regular bail remained refused by the High Court. That earlier limited relief did not resolve the appeal now before the Supreme Court, because the question was whether the cumulative length and prospects of pretrial detention justified continuing ordinary custody after the earlier medical period had ended.

As the case expanded from an initial complaint to a supplementary one naming additional accused persons, the Court had to consider the actual progress of the prosecution as a whole. It did not treat the filing of a complaint as equivalent to imminent trial, especially where notice proceedings, agency litigation and document scrutiny had still prevented the court from reaching the stage of evidence.

Why the alleged interference did not sustain custody

The agency asserted that the appellant had instructed a relative who became a prosecution witness not to join investigation. The Court found this account implausible in the stated chronology because he had been in custody since July 2024 while she was formally included as a witness only in August 2025, which undermined the specific explanation advanced for keeping him detained.

It also considered the accusation that immovable properties had been disposed of after attachment. The identified transactions concerned a company for which no material link to the appellant had been established at the bail stage, and the record did not show that he signed the sale documents, so the Court did not treat those transactions as a demonstrated reason to continue his custody.

The timing of the identified property disposals also came after the appellant had been arrested, which did not by itself make participation impossible but required evidence linking him to the transactions before they could justify further detention. The Court found that connection absent in the record presented for bail, a provisional conclusion directed to risk rather than to final ownership of the properties.

These findings were made for the immediate question of bail, not as a final ruling about every witness, transaction or allegation in the money laundering case. Their significance was that the concrete risks offered to justify continued imprisonment lacked the support needed on the record considered, while the primarily documentary evidence was already with the prosecution.

The order and its limits

The Supreme Court set aside the High Court's refusal and directed release on bail pending trial, leaving the ordinary bail terms to the trial court. It additionally required a reachable telephone number, surrender of the passport and permission before foreign travel, showing how conditions could preserve contact and attendance without extending custody in a prosecution whose trial was not near.

The decision does not announce that seriousness of money laundering is irrelevant or that Section 45's conditions may routinely be bypassed. It applies the special statute in a constitutional setting where the period of detention, expected delay, identified source of delay, completed investigation and weakness of specific interference allegations together made further pretrial custody incompatible with the speedy trial protection.

The sequence of reasoning is important because the Court first acknowledged the offence's gravity and statutory setting, then evaluated the concrete record of custody and trial progress. Its conclusion followed from a demonstrated imbalance between continued imprisonment and a distant adjudication, together with the failure of the agency's specific risk assertions to supply a sufficient present justification for custody.

Nor did the Court determine whether the alleged Amtek transactions constituted laundering or whether the prosecution could prove its case. The relief regulated the appellant's liberty during the pending proceeding, leaving the evidence and criminal responsibility to be adjudicated by the court conducting the trial.

The bail order therefore has a defined procedural effect while the complaints remain pending. Its conditions preserve the possibility of continued judicial oversight as the case moves from document scrutiny into trial.

Source: Arvind Dham v. Directorate of Enforcement · 2026 INSC 12