Author: Srishti Gupta

CASE: Arvind Dham v. Directorate of Enforcement, (2026) 2026 INSC 12 (S.C.I.).

BENCH: Justice P. V. Sanjay Kumar

                 Justice Alok Aradhe 

COURT: Supreme Court of India

CASE FACTS:  

The appellant (Arvind Dham) was a former promoter and non-executive Chairman of Amtek Auto Ltd., accused by the Directorate of Enforcement (ED) for involvement in a money laundering offence under the Prevention of Money Laundering Act, 2002. The present allegations arose out of multiple FIRs lodged by Public Sector Banks, accusing the appellant company of massive financial fraud, cheating and criminal breach of trust, based on which ED registered an Enforcement Case Information Reports (ECIRs).

Appellant was arrested on 09.07.2024 and remained in judicial custody for 16 months. In duration, Ed completed its investigation and filed prosecution complaints. The trial cited 208 prosecution witnesses. Dham’s bail application was rejected by the Special Court and subsequently by the Delhi High Court, on the grounds of the gravity of the offence and the statutory “twin conditions” under Section 45 of the PMLA. Aggrieved, Dham approached the Supreme Court.

Appellant confirmed his cooperation with the investigation, was not a flight risk, and that continued incarceration without meaningful progress in trial violated his fundamental right to a speedy trial under Article 21 of the Constitution. The ED opposed bail, citing the seriousness of economic offences and the alleged potential to influence witnesses.

ISSUES:

The Supreme Court considered the following principal issues:

1. Whether prolonged pre-trial incarceration in a PMLA case, despite completion of investigation and absence of trial progress, violates the accused’s fundamental right to a speedy trial under Article 21 of the Constitution.
2. Whether the statutory “twin conditions” for the grant of bail under Section 45 of the Prevention of Money Laundering Act, 2002, can override constitutional guarantees when continued detention becomes excessive and disproportionate.
3. Whether the gravity of alleged economic offences alone is sufficient to justify indefinite denial of bail, in the absence of concrete apprehension of absconding, tampering with evidence, or influencing witnesses.
4. Whether denial of bail in such circumstances converts pre-trial detention into a form of punitive imprisonment, contrary to settled principles of criminal jurisprudence.

ARGUMENTS: 

Petitioner’s Argument: –

Learned senior counsel for the appellant argued that the appellant, aged 64, suffers from multiple health issues and has been in custody for over 16 months. This prolonged incarceration violates his Right to Liberty and the right to a speedy trial under Article 21 of the Constitution, with reference to relevant court decisions. Notably, the appellant is the only one arrested among 28 individuals investigated, and the total investigation against him is complete, as indicated in the Special Court’s order dated 20.08.2025. It was emphasised that no cognisance of the prosecution complaint has been taken, and the matter is at the document scrutiny stage. Counsel noted a delay attributable to the respondent in the trial process, which has not commenced and highlighted that the respondent had previously filed a Crl. MC before the High Court, leading to an eight-month deferment of proceedings. Furthermore, the appellant has cooperated with the investigation, and allegations of witness tampering involving Ms Anuradha Kapur are deemed implausible as the appellant has been in custody since 09.07.2024. The appellant has no connection to the properties involved and challenges the significant exaggeration of the alleged bank fraud amount, asserting that economic offences should not be treated differently in bail considerations. He is neither a flight risk nor able to tamper with evidence, warranting bail eligibility.

Defendant’s Argument: – 

The Additional Solicitor General argued that the severity of the offence prevents the appellant from obtaining exemptions from the mandatory bail conditions under Section 45 of the PMLA. It was claimed that the appellant, being an influential individual, instructed his cousin, Ms Anuradha Kapur, a nominal director in his companies, not to cooperate with the investigation. There are also allegations that the appellant has disposed of the proceeds of crime, specifically immovable properties in Alwar and Panipat, after they were attached. The argument posited that prolonged detention alone cannot justify bail, particularly given allegations of evidence tampering and witness intimidation. Moreover, any trial delays are attributed to the appellant, as shown in the Trial Court’s records. Out of the 210 witnesses needed for the trial, 25 are shared between the prosecution’s complaints. The Enforcement Directorate filed for expedited hearings, and the appeal is suggested to be dismissed. Alternatively, the appellant might be instructed to reapply for bail after six months, based on the trial’s progress.

JUDGEMENT/ HELD:

The Supreme Court granted bail to appellant Arvind Dham. It was held that the prolonged confinement of the appellant without a meaningful outcome in the trial amounted to a violation of fundamental rights under Article 21. Furthermore, criminal law cannot be applied to punish by means of prolonged pre-trial detention. 

It was observed that though the accusation of money laundering offence is serious in nature, it cannot be justified alone for denying bail. Regarding Section 45 of the PMLA, the Court held that the twin conditions are not absolute and must be applied in harmony with constitutional principles. Where continued custody becomes excessive, arbitrary, and disproportionate, constitutional courts are duty-bound to intervene.

The Court made the following observations:

Firstly, the investigation was complete. Secondly, they already had the evidence that they needed. The documentary evidence was in their possession. Thirdly, the person who appealed was not seen as someone who would try to run. The appellant did not seem like a flight risk to anyone. Fourthly, the trial was not going to end soon because there were so many witnesses who needed to be called. The trial was going to take time to finish, and this was mainly because of the large number of witnesses who would have to testify.

The Court made it clear that people should not be kept in jail before they are found guilty, and they should be allowed to go free until their trial. The Court said that bail is what normally happens, and being put in jail is not the thing to do. The Court wants to make sure that pre-trial detention does not take the place of a conviction. Bail remains the normal rule, and jail is only used in special cases.

Accordingly, the Supreme Court directed that Arvind Dham be released on bail subject to appropriate conditions imposed by the trial court.

PERSONAL REMARKS

The grant of bail for appellant, Arvind Dham, seems justified on the grounds that although the offences under PMLA are serious in nature, it is important to highlight that the legal proceedings are time lengthy and time consuming. Therefore, it shall be taken into consideration that PMLA shall alone not stand as a ground for denying a bail application. However, such cases shall be dealt with an intricate investigation, as to whether there is a meaningful outcome.