27 August 2024 Criminal Appeals & Suspension of Sentence >> Criminal Law   |   Prevention Of Money Laundering Act >> Criminal Law  

On September 10, 2024 in Kalvakuntla Kavitha v/s Directorate Of Enforcement, the Supreme Court overturned the decision of the Delhi High Court which had previously denied bail to the appellant in a high-profile money laundering case. The judgment and order from July 1, 2024, by the learned Single Judge of the Delhi High Court had been challenged by the appellant, leading to this new decision.

The appellant, represented by esteemed Senior Counsels Shri Mukul Rohatgi, Shri D.S. Naidu, and Shri Vikram Chaudhri, had argued against the denial of bail. In the appeals, they contended that there was insufficient material to link the appellant to the alleged crimes. Additionally, the investigations in the case had been completed, making further custody unnecessary. They also cited the judgment in Manish Sisodia vs. Directorate of Enforcement, highlighting that the case involved a vast number of witnesses and extensive documentation, making the likelihood of a swift trial improbable.

Shri Rohatgi further argued that no proceeds of crime had been recovered from the appellant and emphasized that, as a woman, she was entitled to special consideration under the proviso to Section 45(1) of the Prevention of Money-Laundering Act (PMLA). This proviso allows for the release of women accused of money laundering, subject to certain conditions.

However, the learned Additional Solicitor General, Shri S.V. Raju, opposed the appeal. He contended that the appellant was a central figure in arranging the deal between co-accused Arvind Kejriwal and the south lobby. The ASG presented statements from witnesses and co-accused that implicated the appellant, arguing that she had tampered with evidence and influenced witnesses. Notably, it was claimed that she had formatted her mobile phone to destroy evidence.

The Supreme Court, after reviewing the case, found that the appellant had been in custody for five months and that the investigation was complete. Citing the case of Manish Sisodia, the Court noted that given the complexity of the case— with nearly 493 witnesses and around 50,000 pages of documents— a swift trial was unlikely. The Court emphasized that prolonged pre-trial detention should not amount to punishment without a conviction, aligning with the principle that "bail is the rule, and refusal is an exception."

The Court also acknowledged the provision in Section 45(1) of the PMLA, which provides special treatment for women. Contrary to the learned Single Judge's decision, which had incorrectly interpreted the proviso as applying only to "vulnerable women," the Supreme Court clarified that the proviso applied to all women under specific conditions.

In conclusion, the Supreme Court quashed the Delhi High Court's decision, granting bail to the appellant. The conditions for bail included furnishing bonds of Rs. 10,00,000/- for each case, refraining from tampering with evidence or influencing witnesses, depositing her passport with the Trial Court, and cooperating with the expeditious disposal of the trial.

The Court's decision underscores the importance of ensuring that bail considerations adhere to established legal principles and statutory provisions, regardless of the high-profile nature of the case or the accused's status.

  PREVENTION OF MONEY LAUNDERING ACT, 2002    Code of Criminal Procedure, 1973