Court emphasizes the severity of economic offenses and mandates stringent scrutiny under PMLA provisions.
In a significant ruling, the Calcutta High Court has rejected the bail application of Basudeb Bagchi and Avik Bagchi, the principal directors of the Prayag Group of Companies, who are accused in a large-scale money laundering case involving defrauding investors of approximately Rs. 2,862 Crore. The division bench, comprising Justices Rajarshi Bharadwaj and Uday Kumar, delivered the judgment on January 15, 2026, underscoring the gravity of economic offenses and the necessity for rigorous judicial scrutiny under the Prevention of Money Laundering Act, 2002 (PMLA).
The Enforcement Directorate (ED) had charged the petitioners under Sections 3 and 4 of the PMLA for allegedly orchestrating fraudulent investment schemes. Despite claims of partial restitution, a substantial amount of Rs. 1,906 Crore remains untraced, suspected to have been layered through shell companies. The court highlighted that such economic offenses, which involve public funds, form a "class apart," warranting stringent conditions for bail under Section 45 of the PMLA.
The petitioners, represented by Ms. Misha Rahotgi Mohta, argued against the maintainability of the proceedings, invoking Article 20(2) of the Constitution, which guards against double jeopardy. They contended that the ongoing prosecution was merely a reiteration of previous investigations. However, the court dismissed these arguments, clarifying that money laundering is a "continuing offense" and does not attract the protection of Article 20(2) unless a prior trial has concluded with a conviction or acquittal.
Further, the court addressed the petitioners' claims of prolonged incarceration violating their rights under Article 21 of the Constitution. The judges noted that the petitioners had been declared Proclaimed Offenders, thus failing to meet the conditions necessary for bail. The court reiterated that the magnitude of the offenses, affecting thousands of investors, necessitated their custodial presence to trace the "Proceeds of Crime."
The ruling also considered the petitioners' plea for bail on health grounds under the first proviso to Section 45(1) of the PMLA. However, the court found that their medical needs could be adequately managed within the custodial framework, given the risk of flight and interference with the judicial process.
In conclusion, the court directed the trial court to expedite the proceedings to ensure the petitioners' right to a speedy trial is upheld while emphasizing the need for the ED to ensure the presence of witnesses to avoid unnecessary delays. The decision reinforces the judiciary's stance on treating economic offenses with the seriousness they warrant, given their potential impact on the country's financial stability.
Bottom Line:
Bail application under Section 439 Cr.P.C. (now Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023) - Rejection of bail for offenses under Sections 3 and 4 of Prevention of Money Laundering Act, 2002 (PMLA) involving large-scale defrauding of investors and economic offenses constituting a "class apart."
Statutory provision(s): Prevention of Money Laundering Act, 2002 Sections 3, 4, 45; Criminal Procedure Code, 1973 Section 439 (now Section 483 of Bharatiya Nagarik Suraksha Sanhita, 2023); Article 20(2) and Article 21 of the Constitution of India.
Basudeb Bagchi v. Enforcement Directorate, (Calcutta)(DB) : Law Finder Doc Id # 2838903
