In a significant judgment, the Supreme Court granted bail to an accused in a money laundering case, emphasizing that the right to a speedy trial is paramount even with stringent statutory restrictions on bail.

On September 26, 2024, the Supreme Court of India issued a significant judgment in V. Senthil Balaji vs. The Deputy Director, Directorate of Enforcement, allowing the appeal of V. Senthil Balaji against the Madras High Court’s denial of bail. The Court concluded that the potential for prolonged delays in the trials related to both the predicate offenses and those under the Prevention of Money Laundering Act, 2002 (PMLA) meant that continuing Balaji’s detention would violate his fundamental right to a speedy trial.

Case Background V. Senthil Balaji, who served as the Transport Minister of Tamil Nadu from 2011 to 2016, faced accusations related to a job scam. He, along with his personal assistant and brother, allegedly collected large sums of money from individuals in exchange for promised jobs in the Transport Department. This led to the filing of three First Information Reports (FIRs) against him and others under the Indian Penal Code and the Prevention of Corruption Act, 1988. As these offenses fell under the PMLA, the Enforcement Directorate (ED) registered an Enforcement Case Information Report (ECIR) against him on July 29, 2021.

Balaji was arrested on June 14, 2023, in connection with the ECIR. The ED filed a complaint against him on August 12, 2023, under the PMLA, naming him as the sole accused. While the scheduled offense cases were assigned to the Special MPMLA Court in Chennai, the ED's complaint was also taken up by this court.

In considering the appeal, the Supreme Court evaluated several crucial arguments:

Balaji’s counsel argued that the ED’s evidence, particularly a file labeled ‘CS _AC’ allegedly found on a pen drive, was questionable, as a forensic analysis by the Tamil Nadu Forensic Science Laboratory (TNFSL) did not identify this file. The ED countered that a file named ‘csac.xlsx’ was indeed listed, suggesting it was the same document under a different name. The Court found no reason to doubt the authenticity of the files provided by the Special MPMLA Court.

Balaji claimed that the INR 1.34 crores deposited in his account came from his MLA salary and agricultural income, not illicit activities. The ED challenged this, arguing that MLA salaries are typically credited directly to bank accounts, which makes significant cash deposits unlikely. The Court was not convinced by Balaji’s explanations, noting the lack of evidence supporting his claims.

The ED raised concerns about potential witness tampering due to Balaji’s political influence, referencing his long tenure as a Minister and current status as an MLA. They cited past Supreme Court rulings that highlighted risks related to his influence over witnesses. The Supreme Court acknowledged these concerns, recognizing the potential for witness tampering.

The Court further clarified that establishing the existence of proceeds of crime is essential for offenses under Section 3 of the PMLA. Proving these proceeds hinges on demonstrating the scheduled offense. While refering to the case of "Manish Sisodia v. Directorate of Enforcement" the Apex court reitrated the well settled principle of law that bail is not to be withheld as a punishment and observed that the trial courts and the High Courts have forgotten this very principle.

The Court considered the likelihood of significant delays in the trials for both the scheduled offenses and those under the PMLA. Citing previous judgments, the Court reiterated that constitutional courts can grant bail if trials are unlikely to conclude within a reasonable timeframe, even in cases involving strict bail provisions.

Right to a Speedy Trial: The Court underscored the fundamental right to a speedy trial, particularly in light of the minimum three-year sentence associated with PMLA offenses. It emphasized that stringent bail provisions should not lead to unnecessarily prolonged pretrial detention, especially when trials may take an excessive amount of time.

The Court reiterated its authority to grant bail under Article 32 or Article 226 of the Constitution. While delays caused by the accused may influence the decision to deny bail, the Court can grant it if trial delays become unreasonable. Ultimately, the Supreme Court recognized the potential for lengthy delays in the trials and ruled that continued detention would infringe on Balaji’s right to a speedy trial. The Court granted bail with strict conditions, including a bond of INR 25,00,000, restrictions on contacting witnesses, and requirements for regular attendance before both the ED and the Courts.

Coram: Justice Abhay S Oka and Justice Augustine George Masih.
Between: V. Senthil Balaji vs. The Deputy Director, Directorate of Enforcement.
Date of Judgment:26-09-2024