Prevention of Money-Laundering Act, 2002 - Supreme Court Quarterly Digest Jan - Mar, 2026Criminal Jurisprudence – Bail – Unlawful Activities (Prevention) Act, 1967 (UAPA) – Prevention of Money Laundering Act, 2002 (PMLA) – Article 21 of the Constitution of India – Prolonged incarceration of an undertrial accused – Appeal against Delhi High Court order denying bail – Appellant...
Prevention of Money-Laundering Act, 2002 - Supreme Court Quarterly Digest Jan - Mar, 2026
Criminal Jurisprudence – Bail – Unlawful Activities (Prevention) Act, 1967 (UAPA) – Prevention of Money Laundering Act, 2002 (PMLA) – Article 21 of the Constitution of India – Prolonged incarceration of an undertrial accused – Appeal against Delhi High Court order denying bail – Appellant in custody since June 4, 2019, with a combined incarceration of 8 ½ years in NIA and ED cases – Trial proceeding at a "snail's pace" with only 34 out of 248 witnesses examined so far – Held, prolonged detention where a trial is unlikely to conclude within a reasonable time results in undue curtailment of personal liberty under Article 21 – Stringent bail provisions in special statutes (UAPA/PMLA) cannot be used to incarcerate an accused indefinitely without trial – The rigours of such statutory provisions melt down when there is no likelihood of the trial completing in a reasonable time and the accused has undergone a substantial part of the sentence – Considering the appellant's advanced age (74 years), medical ailments, and bleak chances of early trial disposal, Supreme Court enlarged the appellant on bail subject to stringent conditions – Appeal allowed. [Relied on V. Senthil Balaji v. Deputy Director, Enforcement Directorate, 2024 SCC OnLine SC 2626; Union of India v. K.A. Najeeb, (2021) 3 SCC 713; Paras 18-20] Shabir Ahmed Shah v. National Investigation Agency, 2026 LiveLaw (SC) 305
Section 2(1)(u) – "Proceeds of Crime" – The definition is wide enough to include property equivalent in value to the property obtained from criminal activity - This allows for the attachment of alternate property if the direct proceeds of crime are unavailable – Appeal allowed. [Relied on Vijay Madanlal Choudhary v. Union of India (2023) 12 SCC 1; Paras 37-52] Nav Nirman Builders & Developers Pvt. Ltd. v. Union of India, 2026 LiveLaw (SC) 127 : 2026 INSC 130 : 2026 (1) Crimes (SC) 258
Section 8(3), 8(7), and 8(8) – Interplay between Adjudication, Confiscation, and Restoration – Finality of Confirmation Order – Held: Section 8(7) and Section 8(8) are stand-alone provisions - An application for confiscation under Section 8(7) can only be decided by the Special Court once the confirmation order passed under Section 8(3) attains finality - If a confirmation order is challenged before a higher forum (Appellate Tribunal or High Court), a "deemed embargo" operates on the conclusion of proceedings under Section 8(7) until that challenge is resolved - The Special Court must refrain from deciding Section 8(7) applications while an appeal under Section 26 is pending, as the doctrine of merger applies. Nav Nirman Builders & Developers Pvt. Ltd. v. Union of India, 2026 LiveLaw (SC) 127 : 2026 INSC 130 : 2026 (1) Crimes (SC) 258
Section 8(7) – "Material before it" – The expression "material before it" in Section 8(7) has a limited import, primarily to demonstrate the contingency (death of accused, proclaimed offender, etc.) and entitlement to possession - A party who suffered an adverse order under Section 8(3) can only seek relief under Section 8(7) if there is "new material" not previously considered by the Adjudicating Authority or higher forums. Nav Nirman Builders & Developers Pvt. Ltd. v. Union of India, 2026 LiveLaw (SC) 127 : 2026 INSC 130 : 2026 (1) Crimes (SC) 258
Section 8(8) and 2016 Rules – Claim for Restoration – An application under the second proviso to Section 8(8) for restoration of property during trial is maintainable only if the claimant satisfies the essential conditions under Rule 2(b) and Rule 3A of the Prevention of Money-laundering (Restoration of Confiscated Property) Rules, 2016 - This includes acting in good faith, not being involved in money laundering, and suffering a quantifiable loss. Nav Nirman Builders & Developers Pvt. Ltd. v. Union of India, 2026 LiveLaw (SC) 127 : 2026 INSC 130 : 2026 (1) Crimes (SC) 258
Section 45 – Grant of Regular Bail – Right to Speedy Trial – The Supreme Court granted bail to accused, emphasizing that prolonged incarceration of an undertrial without the commencement of trial violates the fundamental right to liberty under Article 21 of the Constitution of India - Supreme Court observed that statutory restrictions under special acts like the PMLA cannot be permitted to result in indefinite pretrial detention - Noted that the trial had not yet commenced and was only at the stage of scrutiny of documents - A significant delay of eight months was attributed to the Directorate of Enforcement (ED) due to its challenge of a procedural order by the Special Judge, which was later withdrawn - With 208 witnesses cited and over 63,000 pages of documents, there was no likelihood of the trial concluding in the near future – Held that the appellant had joined the investigation on multiple occasions even prior to his arrest - found the ED's allegations of witness tampering and dissipation of properties to be "incredulous" and "untenable," as the appellant was in custody when these alleged events occurred, and no material link was established between the appellant and the entities involved in the property transfers – Appeal allowed. [Relied on V. Senthil Balaji v. Deputy Director, Enforcement Directorate, 2024 SCC OnLine SC 2622; Satender Kumar Antil v. CBI (2022) 10 SCC 51; P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791; Paras 15- 23] Arvind Dham v. Directorate of Enforcement, 2026 LiveLaw (SC) 7 : 2026 INSC 12