DATE: 06/01/2026
COURT: Supreme Court of India
BENCH: Justice Sanjay Kumar and Justice
Alok Aradhe
FACTS:
The appellant, Arvind Dham, aged 64, is the
former promoter and non-executive Chairman of Amtek Auto Ltd. (AAL) and a
non-executive Director of M/s. ACIL Ltd., part of the Amtek Group of companies.
In 2017-2018, Corporate Insolvency Resolution Process (CIRP) was initiated
against Amtek Group entities. On 21.12.2022, FIRs were registered by IDBI Bank
and Bank of Maharashtra alleging offenses under Sections 120B, 420, 406, 468 of
the IPC and Section 13(2) read with 13(1)(d) of the Prevention of Corruption
Act, 1988, involving fraud of INR 385.35 crores and INR 289 crores
respectively, with the appellant arrayed as an accused among 27 others. Based
on these, the Enforcement Directorate (ED) registered two ECIRs on 21.03.2023
for money laundering. A writ petition (W.P. Criminal No. 246 of 2022) before
the Supreme Court alleged frauds by Amtek Group involving INR 33,400 crores,
leading to a 27.02.2024 order directing CBI and SFIO to investigate and
cooperate with ED. The allegations against the appellant centered on him being
the ultimate beneficiary of a scheme diverting and siphoning public funds
through layered entities, causing losses to public sector banks.
The appellant appeared in response to PMLA
Section 50 summons on 19.06.2024, with searches conducted on 20.06.2024 and his
arrest on 09.07.2024. A prosecution complaint was filed on 06.09.2024 against
16 accused (6 individuals, 10 companies), followed by a supplementary complaint
on 02.08.2025 against 40 accused (22 individuals, 18 companies), citing 208
witnesses. Out of 28 individuals, only the appellant was arrested and remains
in custody for about 16 months and 20 days. His bail application under Section
45 PMLA was rejected by the Special Judge on 21.01.2025, citing inapplicability
of the proviso, and by the Delhi High Court on 19.08.2025 under Section 483
BNSS read with Section 45 PMLA, despite interim medical bail from 11.03.2025 to
01.04.2025. The appellant suffers from multiple ailments, cooperated with the
investigation (which concluded qua him per 20.08.2025 order), and argues
prolonged custody violates Article 21, with trial delays (including 8 months
due to ED's challenge) and no cognizance taken yet.
ISSUES:
The primary issue before the Supreme Court
was whether the appellant, Arvind Dham, should be granted regular bail under
Section 45 of the PMLA read with Section 483 of the BNSS, considering the twin
conditions for bail in money laundering cases, the gravity of the economic
offenses involving alleged fraud and siphoning of funds worth over INR 673.35
crores (with exaggerated claims of INR 38,000 crores), prolonged incarceration
of about 16 months and 20 days violating the right to speedy trial under
Article 21 of the Constitution, the conclusion of investigation qua the
appellant, the lack of trial commencement with 210 witnesses and no cognizance
taken, allegations of witness tampering and evidence dissipation, and whether
economic offenses warrant blanket denial of bail irrespective of individual
circumstances.
JUDGEMENT WITH REASONING:
The Supreme Court allowed the appeal,
quashing the Delhi High Court's judgment and order dated 19.08.2025, and
directed the release of the appellant, Arvind Dham, on bail during the pendency
of the trial in ECIR Case Nos. ECIR/GNZO/13/2024 and ECIR/GNZO/14/2024 before
the Special Judge (PC Act) (CBI)-02, Rouse Avenue District Court, under PMLA
provisions. The terms and conditions for bail were to be fixed by the Trial
Court, with additional requirements for the appellant to provide a contact
telephone/mobile number to the ED, surrender his passport to the Trial Court,
and not leave India without the Trial Court's permission.
The Court emphasized that while considering
bail, the gravity of the offense must be assessed based on the specific facts
and circumstances of each case, including the prescribed sentence, rather than
treating all economic offenses as a homogeneous class warranting automatic
denial of bail. It reiterated that economic offenses vary in nature and cannot
be categorized uniformly, and statutory restrictions like those under Section
45 of the PMLA, imposing twin conditions for bail cannot lead to indefinite
pretrial detention, especially where the maximum sentence is seven years. The
Court invoked Article 21 of the Constitution, highlighting the right to speedy
trial and liberty, which applies irrespective of the crime's nature. Prolonged
incarceration without trial commencement or progress effectively turns
detention into punishment, as seen in precedents where bail was granted for
periods ranging from 3 to 17 months. In this case, the appellant's 16 months
and 20 days in custody, with investigation concluded qua him, no cognizance
taken, and the trial at the document scrutiny stage with 210 witnesses and no
foreseeable start (despite ED's unaddressed application for day-to-day hearing),
violated these rights. The documentary evidence was already seized, eliminating
tampering risks, and the appellant had cooperated by joining the investigation
multiple times before arrest, with only him arrested out of 28 individuals.
Furthermore, the Court dismissed the ED's
allegations of witness tampering and evidence dissipation as untenable: the
claim that the appellant instructed Ms. Anuradha Kapur (arrayed as a witness on
02.08.2025) not to join the investigation was incredulous, given his custody
since 09.07.2024 predated her formal inclusion; similarly, property disposals
in December 2024 and February 2025 involved M/s. Marichika Properties, with no
established link to the appellant or evidence of his involvement as a
signatory. The trial delay of eight months was solely attributable to the ED,
which challenged the Special Judge's 07.09.2024 notice issuance and withdrew
the petition only on 23.05.2025 after securing a stay. The Court rejected the
notion that the offense's gravity or exaggerated fraud figures (INR 38,000
crores vs. actual INR 673.35 crores in predicate offenses) justified continued
detention, prioritizing substantial justice and constitutional protections over
rigid application of special laws. Thus, balancing the PMLA's objectives with
Article 21, bail was granted to prevent undue hardship, with safeguards like
passport surrender to mitigate flight risks.
ANALYSIS:
In Arvind Dham v. Directorate of
Enforcement, the Supreme Court granted regular bail to the appellant, a 64-year-old
former promoter of the Amtek Group, after quashing the Delhi High Court's
rejection order dated 19.08.2025, thereby underscoring the primacy of the
constitutional right to speedy trial under Article 21 over the stringent twin
conditions of Section 45 of the PMLA in cases of prolonged pre-trial detention.
The Court recognized the gravity of the alleged economic offenses involving
diversion and siphoning of funds leading to substantial losses to public sector
banks, with the predicate fraud quantified at INR 673.35 crores (contrasted
against exaggerated claims of INR 38,000 crores). However, it firmly rejected
the blanket classification of all economic offenses as justifying indefinite
incarceration, emphasizing that bail decisions must be fact-specific, considering
factors such as the maximum sentence of seven years, the nature of evidence
(largely documentary and already seized), cooperation during investigation, and
the absence of realistic prospects of trial commencement in the foreseeable
future. With the appellant having remained in custody for over 16 months and 20
days, investigation concluded qua him, no cognizance taken on the prosecution
complaints, 210 witnesses cited, and the trial process stalled at the document
scrutiny stage, the continued detention was held to violate the fundamental
right to liberty and effectively convert pre-trial custody into punishment.
The Court further dismantled the
Enforcement Directorate's opposition by finding the allegations of witness
tampering and dissipation of proceeds of crime wholly unsubstantiated and
incredulous: the claim regarding instructions to Ms. Anuradha Kapur was
untenable given the appellant's custody since 09.07.2024 predated her inclusion
as a witness in August 2025, while property disposals linked to M/s. Marichika
Properties lacked any material connection to the appellant. Critically, the
eight-month delay in trial proceedings was solely attributable to the ED's
challenge to the Special Judge's notice issuance, which resulted in a stay
until its withdrawal in May 2025. Drawing from a consistent line of precedents
granting bail in similar periods of incarceration (ranging from 3 to 17
months), the Supreme Court exercised its discretion to balance the objectives
of the PMLA with constitutional imperatives, directing the appellant's release
on bail with safeguards including passport surrender, non-departure from India
without permission, and provision of contact details to the ED. This judgment
reinforces that statutory rigour under special laws cannot eclipse the
guarantee of speedy justice, particularly where prolonged detention lacks
justification in the facts of the case.
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