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Criminal LawSupreme Court of India

Gautam Kundu v. Manoj Kumar (Directorate of Enforcement)

Criminal Appeal · Neutral citation not assigned (Criminal Appeal No. 1706 of 2015)Decided 16 Dec 2015
Criminal Appeal No. 1706 of 2015
Justice Pinaki Chandra Ghose · Justice R.K. Agrawal

Background

The appellant chaired Rose Valley Real Estate Construction Ltd., which raised money from investors through privately placed secured debentures. After SEBI and the Enforcement Directorate initiated proceedings, he was arrested in March 2015 on a money-laundering charge and held in custody. The Calcutta High Court refused him bail, and he appealed to the Supreme Court.

Decision Breakdown

The Court held that the strict bail conditions in Section 45 of the PMLA apply even when bail is sought under the ordinary criminal procedure provision (Section 439 CrPC), because the PMLA is a special law that overrides it. Under those conditions the court must be satisfied there are reasonable grounds to believe the accused is not guilty and is unlikely to offend again on bail. The Court did not decide whether Section 24 of the SEBI Act is a scheduled offence under the PMLA, because that question was pending before a High Court division bench. Relying on the materials gathered in investigation, the Court found no reason to interfere with the High Court's refusal and dismissed the appeal.

Lesson Learnt

In money-laundering cases, bail is much harder to get, and the usual "bail is the rule" approach does not apply in the same way. Anyone facing a PMLA charge should expect the court to examine the evidence closely before granting release.

Gautam Kundu v. Manoj Kumar (Directorate of Enforcement) – Legal Case Shots | LegalAware