Calcutta High Court (Appellete Side)
Kolkata Zonal Office-I vs Jitendra Prasad Verma Alias J. P. Verma on 24 July, 2026
Author: Rajarshi Bharadwaj
Bench: Rajarshi Bharadwaj
IN THE HIGH COURT AT CALCUTTA
CRIMINAL MISCELLANEOUS JURISDICTION
APPELLATE SIDE
CRM (R) 13 OF 2026
ENFORCEMENT DIRECTORATE, GOVERNMENT OF INDIA,
KOLKATA ZONAL OFFICE-I
-VS-
JITENDRA PRASAD VERMA ALIAS J. P. VERMA
BEFORE:
THE HON'BLE JUSTICE RAJARSHI BHARADWAJ
AND
THE HON'BLE JUSTICE UDAY KUMAR
For the Petitioner : Mr. Arijit Chakrabarti, Ld. Adv.
Ms. Swati Kumari Singh, Ld. Adv.
For the Opposite Party : Mr. Vikram Chaudhury, Ld. Sr. Adv.
Mr. Sajjal Yadav, Ld. Adv.
Ms. N Ahmed, Ld. Adv.
Ms. P. Banerjee, Ld. Adv.
Reserved on : 10.07.2026
Pronounced on : 24.07.2026
Uday Kumar, J:-
1.
The rule of law cannot be reduced to an empty incantation or a
procedural platitude when this Court, sitting as a Division Bench
specially assigned to adjudicate systemic financial mischiefs and Ponzi
matters, is called upon to address deep-rooted white-collar
depredations. Such crimes systematically hollow out the financial
CRM (R) 13 OF 2026 2
foundations of the common wealth, derail the state’s economic stability,
and breach public trust.
2. This application, preferred by the Directorate of Enforcement under
Section 439(2) of the Code of Criminal Procedure, 1973 (now
corresponding to Section 483 of the Bharatiya Nagarik Suraksha
Sanhita, 2023), seeks the cancellation of an order of regular bail dated
14th November, 2025. The order was passed by the learned Chief
Judge, City Sessions Court, Calcutta, acting as the Designated Special
Court under the Prevention of Money Laundering Act, 2002 (hereinafter
referred to as the ‘PMLA’), in connection with ML Case No. 11 of 2025.
3. The underlying prosecution arises out of a formal complaint alleging an
offense under Section 3, punishable under Section 4 of the PMLA. By
the impugned order, the learned Special Judge enlarged the opposite
party/accused, Jitendra Prasad Verma, on regular bail. In doing so, the
court completely bypassed the mandatory statutory boundaries and
explicit commands embedded in Section 45(1) of the Act.
4. This case requires us to re-examine the structural boundaries of
judicial discretion in anti-money laundering bail proceedings.
Specifically, we must evaluate the standard for resetting a citizen’s
liberty when a special Court ignores vital material evidence and
bypasses statutory bars.
5. To fully grasp the structural and anatomical perversity attributed to the
impugned order, it is necessary to lay out the factual landscape. The
genesis of the present money laundering probe lies in the multi-city
systemic collapse of the Sahara Group of Companies. The scheduled or
CRM (R) 13 OF 2026 3
predicate offenses involve a deep-rooted criminal conspiracy. Hundreds
of Crores of rupees were collected from everyday retail depositors under
the false pretence of real estate development, housing projects, and
high-yield money circulation ventures. Instead of being deployed in
legitimate investments, these public funds were systematically layered,
integrated, and siphoned off through an underground network of
shadow companies, artificial real estate agents, and cash couriers.
6. The specific allegations brought against the opposite party, Jitendra
Prasad Verma (designated as Accused No. 1), in the formal Prosecution
Complaint are neither thin nor peripheral. Far from being a detached,
independent freelance “land broker” as painted by the defence, the
investigation carried out by the Enforcement Directorate reveals that
the opposite party operated as the chief financial conductor for the
illicit cash operations of this criminal enterprise within this jurisdiction.
7. During searches conducted under Section 17 of the PMLA at the
residential premises of the opposite party, the investigating agency
recovered extensive, multi-city physical and digital cash ledgers. These
ledgers provide a detailed, un-booked record of parallel cash
transactions amounting to a staggering ₹214.66 Crores. Further
analysis of the seized materials and bank channels established that the
opposite party actively coordinated illicit cash movements across 28
cities, totalling ₹76.29 Crores. Most damagingly, the agency recovered a
localized transaction slip from the Faizabad sector, which explicitly
documents a personal illicit commission or “cut” of ₹5.75 Crores paid
directly to the opposite party for facilitating these secret transfers.
CRM (R) 13 OF 2026 4
8. Despite this clear paper and digital trail, the learned Chief Judge, City
Sessions Court, Calcutta, chose to release the opposite party on regular
bail. A perusal of the inner logic of the impugned order dated 14th
November, 2025 reveals that the learned Special Judge was swayed by
three entirely unsustainable and extraneous considerations:
First, the Special Court observed that because the opposite
party was not an official employee or a director listed on the
formal corporate payroll of the Sahara Group, he could not be
held responsible for the core corporate default.
Second, the court laid heavy emphasis on the fact that no
individual depositor or public witness had given an oral
statement naming the opposite party directly, concluding that
there was a lack of direct ocular evidence connecting him to the
fraud.
Third, the learned Special Judge noted that because the
primary investigations into the predicate and scheduled offenses
were stalled, and because the opposite party had spent 124
days in pre-trial detention, his continued custody would violate
his personal liberty under Article 21 of the Constitution.
9. Mr. Arijit Chakrabarty, learned Counsel appearing on behalf of the
Enforcement Directorate, has mounted an exhaustive attack against the
impugned order. He submits that the order of the learned Special Court
is not merely an erroneous exercise of judicial discretion, but a
structural nullity. It is patently perverse, demonstrably capricious, and
CRM (R) 13 OF 2026 5
passed in open defiance of the mandatory statutory boundaries drawn
by Section 45 of the PMLA.
10. He further submitted that the learned Special Court completely failed to
appreciate the legal landscape within which the present offense
germinated. The entire exercise of liquidating the real estate assets of
the Sahara Group was not an ordinary commercial venture, but a
strictly conditioned, judicially monitored restitution process mandated
by the Hon’ble Supreme Court by its order dated 11th July 2016 passed
in SEBI VS. SAHARA INDIA REAL ESTATE CORPN. LTD. & ORS. The
Apex Court, while permitting the sale of these properties to satisfy the
compelling demands of thousands of systemic fraud victims, erected
unyielding statutory guards, that the sales could not fall below 90% of
the stipulated circle rates, and the entirety of the proceeds, clear of bare
tax liabilities, had to be faithfully secured in the designated SEBI-
Sahara Account. This judicial framework was designed as a remedial
mechanism to protect public savings; it was never intended to be
weaponized as a conduit for generating parallel, unrecorded liquid
wealth.
11. Learned Counsel indicated that far from respecting this holy command,
the opposite party systematically subverted the Apex Court’s mandate
by transforming a court-sanctioned liquidation into an active, multi-
layered money laundering enterprise. Masquerading under the benign
description of a mere “land broker,” the opposite party acted as the vital
operational gear in a shadow economy, deliberately generating under-
the-table cash components and diverting them away from the SEBI-
CRM (R) 13 OF 2026 6
Sahara Account. By actively assisting the principal offenders in
siphoning off and concealing these parallel cash flows, the opposite
party directly facilitated the generation of fresh, undocumented black
money under the very nose of the administration, thereby committing a
blatant fraud upon the court and the thousands of helpless investors
awaiting restitution.
12. The learned Counsel submitted that the criminal footprint of this
subversion is not a matter of speculative inference but stands starkly
quantified by overwhelming documentary evidence recovered from the
exclusive possession of the opposite party. The recovery of a multi-city
cash ledger detailing illicit transactions to the tune of ₹214.66 Crores,
alongside concrete evidence of parallel cash components totalling₹76.29
Crores across 28 cities and a specific personal “cut” of ₹5.75 Crores in
the Faizabad sector, demonstrates a deep-rooted, calculated
involvement in the handling of the proceeds of crime. By entering the
market to liquidate these assets through parallel cash channels, the
opposite party committed a distinct, fresh infraction under Section 3 of
the PMLA. This generation and circulation of unrecorded cash post-
2016 constitutes a continuing offense that persists as long as these
illicit gains remain in active circulation, completely stripping the
opposite party of any claim to casual visual innocence or structural
detachment.
13. In this backdrop, Mr. Chakrabarti, has emphasized that the impugned
order of the learned Special Court suffers from a profound and manifest
perversity, having proceeded on an impermissible, microscopic
CRM (R) 13 OF 2026 7
dissection of verbal statements while turning a blind eye to this
undeniable documentary trail. The court fundamentally misdirected
itself in law by treating the PMLA offense as a mere tail of the predicate
crime, erroneously concluding that a delay in the primary FIR or the
opposite party’s omission therein diluted the rigors of the special
statute. Under the settled matrix of the law, an independent money
laundering investigation stands on its own legs, completely insulated
from the status of the predicate offense. By ignoring the statutory
inversion of the burden of proof under Section 24 and bypassing the
mandatory twin conditions of Section 45(1) of the PMLA, the Special
Court flipped settled legal commands on their head, delivering a casual
and cryptic order that shocks the judicial conscience. Individual liberty
under Article 21 cannot be viewed in total isolation from the collective
financial ruin of thousands of defrauded citizens, and an order so
thoroughly steeped in legal perversity cannot be permitted to stand.
14. The learned Counsel referred the authoritative pronouncement of the
Apex Court in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors.
[(2023) 12 SCC 1], in which it has been held that the twin conditions in
Section 45(1) of PMLA, following the legislative amendment of 2018,
stand as an unyielding, mandatory, and constitutionally valid statutory
command. The Special Court at the stage of hearing bail application is
required to maintain a delicate balance, not weighing the evidence
meticulously as if conducting a mini-trial, but assessing whether the
accused has discharged the heavy burden of showing a lack of mens rea
on broad probabilities. The learned Special Court flipped this principle
CRM (R) 13 OF 2026 8
on its head. By observing that “not a single witness has ventured to link
the petitioner,” the Special Court engaged in a meticulous dissection of
verbal statements while completely ignoring the overwhelming
documentary trail of the ₹214.66 Crores cash ledger found in the
exclusive possession of the accused.
15. Furthermore, Contradicting the reasoning of the Special Court that the
status of the predicate offense mitigates the need for custody, the
learned Counsel relied on the view of the supreme court that the
investigation for the predicate offense and the investigation by the
Enforcement Directorate for offenses under the PMLA are distinct and
independent as held in Directorate of Enforcement v. Aditya Tripathi
[(2024) 20 SCC 545]. Mere filing of a closure report or delay in the
investigation of the predicate crime cannot be a ground to release an
accused on bail in the PMLA case if the independent money laundering
investigation is still actively continuing.
16. Referring Tarun Kumar v. Assistant Director, ED [(2024) 13 SCC 788] and
Union of India through the Assistant Director v. Kanhaiya Prasad [2025
SCC OnLine SC 306], Mr. Chakrabarti submitted that economic offenses
involving public money constitute a “class apart” and must be viewed
through a completely different judicial prism as the white-collar crimes
are committed with cool calculation and deliberate design and any
casual, cursory, or cryptic order granting bail in such matters, without
entering the thicket of Section 45, causes immense damage to the
collective financial health of the nation. The 124 days spent in custody
by the opposite party fall far short of the thresholds set by Section 436A
CRM (R) 13 OF 2026 9
of the Cr.P.C. (now Section 479 of the BNSS, 2023),and individual
liberty under Article 21 cannot be viewed in isolation from the collective
interests of thousands of defrauded investors. For money-launderers,
jail is the rule and bail is an exception.
17. As reiterated in Tarun Kumar (supra), once the possession of proceeds of
crime is shown, the court must presume the involvement of the accused
in money laundering unless the contrary is proved, the learned counsel
has stated that by looking for direct ocular evidence from individual
depositors, the Special Court not only turned a blind eye to the inverted
burden of proof set out in Section 24 of the Act but also engaged in an
impermissible mini-trial at the stage of consideration of bail in a PMLA
offence.
18. Mr. Chakrabarti further submitted that to assess whether the
requirement for cancellation of bail is satisfied in this case, a clear
distinction must be maintained between the two pathways recognized
by law. The first pathway concerns traditional post-release misconduct,
which looks for supervening factors such as witness tampering,
threatening vectors, active evasion of the due process of law, or an
immediate flight risk. The second independent pathway addresses
inherent perversity in the order itself, which is triggered when the court
below has ignored material evidence, ignored statutory bars, or relied
on arbitrary and capricious logic. As per Learned Counsel, the case at
hand falls squarely within the realm of inherent perversity as the
learned Special Court has erroneously held that the accused was a
mere land broker outside the formal corporate structure of Sahara,
CRM (R) 13 OF 2026 10
ignoring the wide statutory sweep of Section 3 which uses the
expression “whosoever directly or indirectly attempts to indulge.”When a
subordinate court grants bail by ignoring vital material on record,
taking into account completely irrelevant factors, and bypassing
mandatory statutory bars, a superior court is not only empowered but
constitutionally obligated to set aside such an unjustified and illegal
order.
19. As settled in Pradeep Nirankarnath Sharma v. ED & Anr. [2025 SCC
OnLine SC 560] and Basudeb Bagchi & Anr. v. ED [2026 SCC OnLine Cal
375], money laundering is a persistent process that continues as long
as the illicit gains remain in circulation or are actively utilized. The
generating of unrecorded parallel cash components post-2016
constitutes a distinct and continuing offense that cannot be shielded by
claims of cooperation or brief historical detention. The opposite party’s
ongoing handling of these funds means he remains actively engaged in
the process of money laundering.
20. Learned Counsel further brings to our notice the administrative orders
passed by the Hon’ble the Chief Justice and the coordination directives
of the Vacation Division Bench dated 05.06.2026. It is pointed out that
this application for cancellation (CRM(R)-13/2026) has been aligned
with the regular bail petition (CRM(R)-16/2026) before the Regular
Division Bench taking up Ponzi matters to avoid any conflict of views.
This administrative consolidation underscores the structural continuity
of the investigation and the danger of allowing a perverse order of bail
to stand.
CRM (R) 13 OF 2026 11
21. In conclusion, Mr. Chakrabarti submitted that individual liberty under
Article 21 cannot be viewed in total isolation from the collective
interests of thousands of defrauded investors whose life savings have
been siphoned off through deep-rooted financial conspiracies. The
opposite party has totally failed to overcome the twin conditions of
Section 45. The order of the learned Special Judge is unsustainable in
law, shocks the judicial conscience, and if allowed to stand, would
derail a highly sensitive and ongoing investigation.
22. Therefore, it is prayed that the order dated 14.11.2025 be quashed and
set aside, and the opposite party be directed to surrender immediately
to custodial custody.
23. Conversely, Mr. Vikram Chaudhury, learned Senior counsel for the O.P.
submitted that the entire factual matrix surrounding the disposal of the
Sahara Group’s properties must be viewed through the precise legal
prism of the Hon’ble Supreme Court’s order dated 11th July 2016
passed in SEBI VS. SAHARA INDIA REAL ESTATE CORPN. LTD. & ORS.
The opposite party did not independently engineer or illicitly execute the
sale of these real estate assets; rather, every transaction facilitated by
him was initiated and carried out directly under the protective
structural framework and explicit mandates established by the Apex
Court to satisfy depositors’ demands. Acting strictly within the
boundaries of this judicially sanctioned liquidation exercise, the
opposite party committed no wrong whatsoever, performing the
legitimate commercial role of a freelance facilitator in the ordinary
course of business.
CRM (R) 13 OF 2026 12
24. Resisting the prayer for cancellation, the learned Senior Counsel
appearing on behalf of the opposite party/accused person has argued
that the present revisional application seeking the cancellation of
regular bail is fundamentally misconceived and legally untenable. As
settled by the Apex Court in Dolat Ram v. State of Haryana [(1995) 1
SCC 349] and Himanshu Sharma v. State of Madhya Pradesh [(2024) 4
SCC 222], there exists a well-defined jurisprudential chasm between the
rejection of a bail application at inception and the cancellation of a
liberty already judicially secured. An order of regular bail, once validly
granted, cannot be interfered with in a routine or mechanical manner.
He contended that the investigating agency has failed to demonstrate
any supervening circumstances born post-release, such as tampering
with evidence, subversion of the judicial process, or intimidation of
witnesses, or any ex-facie perversity in the impugned order that would
shock the conscience of this Court to warrant a recall of the bail.
25. Navigating through the factual matrix, the learned Senior Counsel
argued that the opposite party is but a mere external, freelance land
broker who stood completely outside the corporate and administrative
hierarchy of the Sahara Group. He wielded no corporate control,
possessed no administrative dominion, nor played any part in the
strategic decision-making processes orchestrated by the management
from Lucknow. While dealing with the sweeping nomenclature of the
word “whosoever” in Section 3 of the PMLA, the learned senior counsel
submits that mere legislative breadth does not absolve the prosecution
of its primary burden to establish a direct, proximate nexus between
CRM (R) 13 OF 2026 13
the accused and the alleged proceeds of crime and a living scheduled
offense. He merely facilitated the disposal of lands under the protective
umbrella and explicit structural framework permitted by the directions
issued by the Hon’ble Supreme Court of India, earning legitimate
brokerage commissions in the ordinary course of business.
26. He vehemently contradicted the Petitioner-Directorate’s attempt to
colourably transmute these transactions into an offense of money
laundering is fundamentally flawed in law. The monies received from
third-party purchasers constituted valuable commercial consideration
for the lands sold under the Supreme Court’s directives, not the tainted
fruits of a scheduled offense. At highest, an undeclared cash component
in a real estate transaction constitutes an infraction of fiscal statutes
under the Income Tax Act, 1961, which cannot be colourably
transmuted into an offense of money laundering under the principles of
Arnab Manoranjan Goswami v. State of Maharashtra [(2021) 2 SCC 427].
Ld. Counsel pointed out that out of the ₹50 Croress deposited in the
designated account of the Supreme Court, only ₹30 Crores were
disbursed, while ₹20 Croress remain fully secured, thereby dispelling
the agency’s narrative of an unmitigated and complete siphoning of
capital.
27. Crucially, he submitted that even if it is assumed for the sake of
argument that the conditions governing the sale price or the deposit of
funds were breached, such actions would exclusively attract liability for
civil or criminal contempt before the Hon’ble Supreme Court for
violating its specific order. Such deviations cannot legally generate
CRM (R) 13 OF 2026 14
“proceeds of crime” or form the basis for independent criminal
proceedings under the PMLA. The Directorate cannot arrogate to itself
the jurisdiction to police the execution of the Apex Court’s decrees,
especially when it has chosen not to array a single third-party
purchaser as an accused in the Prosecution Complaint, thereby treating
the source transactions as legally sound.
28. Addressing the evidentiary contours of the case, the learned counsel
has underscored the Directorate’s heavy reliance upon statements
recorded under Section 50 of the PMLA to argue that the opposite party
was evasive and failed to make a “full disclosure” regarding an
additional ₹76 Crores appearing in digital data seized from a co-
accused, labelling the same as “non-cooperation” is a manifest attempt
to validate testimonial compulsion and extract a forced confession. To
counter this contention, the learned counsel reminds this Court that
the statutory power of investigation cannot be weaponized to extract a
forced confession or validate testimonial compulsion. Relying heavily on
the recent exposition of law in Arvind Kejriwal v. Central Bureau of
Investigation [2024 SCC OnLine SC 2370], he argued that the
constitutional right against self-incrimination under Article 20(3)
occupies an exalted status. An investigating agency cannot justify the
continued or renewed incarceration of an individual by merely branding
his refusal to confess or echo the prosecution’s narrative as “non-
cooperation” or “evasiveness.” He submitted that such statements
(Section 50) may only be looked into to form a prima facie opinion at the
stage of bail, whereas their ultimate admissibility, reliability, and weight
CRM (R) 13 OF 2026 15
remain matters for full-dress adjudication at the trial, and cannot be
used as a lever to disrupt an existing liberty.
29. The learned Senior Counsel next raised a structural challenge regarding
the survivability of the PMLA prosecution, as it cannot float in a legal
vacuum detached from an active, living scheduled offence. Relying on V.
Senthil Balaji v. State [(2024) 3 SCC 51], he underlined that the
existence of an active scheduled offense is a sine qua non for the
generation of “Proceeds of Crime.” In the instant case, the structural
base of the Kolkata ECIR was FIR No. 142 of 2020 registered at
Bhubaneshwar, involving a disputed amount of a mere ₹52,187. The
local police filed a Closure Report in the said predicate offense on
27.08.2020, on the ground of a “mistake of fact,” which was formally
accepted by the Jurisdictional Magistrate vide an order dated 14th
September, 2024.The learned counsel forcefully argued that with the
absolute judicial dissolution and closure of this primary predicate
offense and given the admitted fact that the opposite party is not an
arrayed accused in any of the other 300 regional FIRs, the derivative
PMLA proceedings against the opposite party must suffer a natural legal
eclipse, as recognized by the Telangana High Court in its order dated 8th
September 2022 passed in M/s Bharti Cement Corp. Pvt. Ltd. v. ED
[CRLRC 84/2021].
30. On the anvil of Article 21 of the Constitution of India, the learned
counsel has forcefully submitted that the right to a speedy trial is an
inalienable facet of personal liberty that must be protected when the
trial process itself becomes the punishment. Relying on the
CRM (R) 13 OF 2026 16
constitutional imperatives laid down in Manish Sisodia v. Directorate of
Enforcement (2024) 12 SCC 660] he emphasized that the massive
procedural labyrinth of this case encompassing (over 300 clubbed FIRs,
16 co-accused persons, 33 primary witnesses, and over a thousand
underlying complaints), renders the prospect of an early trial wholly
illusory, thereby justifying the lower court’s protection of his liberty.
Keeping an aged individual incarcerated indefinitely in such a complex
matrix would constitutes an unmerited, advance punishment, thereby
doing violence to the constitutional mandate.
31. Finally, touching upon the post-bail conduct of the opposite party, it is
submitted that his actions remain entirely unimpeachable and
exemplary. Assuaging any apprehensions of a flight risk, the learned
counsel highlighted that the opposite party, despite being a resident of
New Delhi, has meticulously adhered to the geographical embargo
imposed by the Special Court by residing continuously in transient
accommodations in Kolkata to satisfy local residency restrictions. It is
pointed out that even when faced with the acute medical emergency of
his ailing mother, a terminal patient of plasma cell myeloma (blood
cancer), he sought the leave of the Court, travelled to New Delhi under
the strict constraints of a seven-day relaxation (from 03.04.2026 to
09.04.2026), and returned to the jurisdiction with clockwork precision
to report before the investigating officer on 09.04.2026 and appearing
before the Court on 10.04.2026. There is absolutely no ground to
interfere with the well-reasoned order of the learned Special Judge.
CRM (R) 13 OF 2026 17
32. On this conspectus of facts, the learned senior counsel submitted that
the prayer for cancellation is devoid of any merit and ought to be
dismissed in-limine.
33. We have heard the learned counsel for both sides at length, analysed
the rival submissions, and examined the record with anxious care. The
primary issue before us is whether the strict, legally demarcated
parameters for the cancellation of bail under Section 439(2) of the
Cr.P.C. (now Section 483 of the BNSS, 2023) have been satisfied.
34. To arrive at a lawful and logically consistent finding, it is necessary to
first delineate the structural topography of the law governing the
cancellation of bail. Our criminal jurisprudence draws a sharp,
qualitative distinction between two independent and mutually exclusive
judicial pathways for taking away an accused person’s liberty after
regular bail has been granted: firstly, the occurrence of supervening
circumstances born post-release, and secondly, the presence of
inherent perversity and foundational illegality in the order granting bail
itself.
35. The first pathway, governing “supervening circumstances,” applies to
situations where an order enlarging an accused on bail was legally
unassailable and properly within jurisdiction at the time it was passed,
but subsequent post-release developments demonstrate that the
accused has abused his liberty. As established by the Supreme Court of
India in landmark decisions such as State of Delhi v. Sanjay Gandhi
[(1978) 2 SCC 411], Dolat Ram (supra), and reinforced down to State of
Haryana v. Dharamraj [(2023) 17 SCC 510], this track requires the
CRM (R) 13 OF 2026 18
prosecution to prove definitive post-release misconduct. This includes
actions such as active attempts to tamper with evidence, intimidation or
coercion of prosecution witnesses, an immediate and demonstrable
flight risk to evade trial, or the repetition of identical crimes.
36. In the present case, the opposite party has established that his post-
release conduct has been cooperative; he has respected the
geographical embargo imposed upon him, returned precisely from a
medical relaxation to report before the investigating officer, and has not
shown any overt supervening misconduct. If the challenge preferred by
the Enforcement Directorate were grounded solely on this first track of
post-bail supervening misconduct, the application would undoubtedly
fail.
37. However, our jurisprudence recognizes a second, entirely distinct
pathway for cancellation that does not rely on post-release
developments. As established by the Apex Court in Puran v. Rambilas
[(2001) 6 SCC 338], Narendra K. Amin v. State of Gujarat [(2008) 13 SCC
584], and consistently applied in Neeru Yadav v. State of Uttar Pradesh
[(2014) 16 SCC 508] and Deepak Yadav v. State of Uttar Pradesh [(2022)
8 SCC 559], if the underlying order granting bail is patently perverse,
illegal, or operates in direct violation of mandatory statutory bars, the
prosecution is not required to prove any post-bail misconduct or
supervening circumstances. When a subordinate court grants bail by
ignoring vital material on record or by bypassing absolute statutory
limitations, the order is legally broken from its inception (ab initio void).
In such instances, a superior court is constitutionally obligated to set
CRM (R) 13 OF 2026 19
aside the order immediately, as allowing an inherently flawed order to
remain in force constitutes an independent and severe miscarriage of
justice.
38. The case before us falls squarely within this second category of inherent
perversity. A review of the inner logic of the impugned order dated 14th
November, 2025 reveals that the learned Chief Judge, City Sessions
Court, Calcutta, committed a grave legal error by completely bypassing
and misinterpreting the strict statutory commands embedded in
Section 45(1) and Section 24 of the PMLA. The learned Special Judge
completely inverted these principles, creating an order that is
structurally broken in the ways discussed below:
i. Firstly, the Special Court completely lost sight of the fact that
the entire exercise of liquidating the real estate assets of the
Sahara Group was not an ordinary commercial venture, but a
strictly conditioned, judicially monitored restitution process
mandated by the Hon’ble Supreme Court by its order dated
11th July 2016 passed in SEBI VS. SAHARA INDIA REAL
ESTATE CORPN. LTD. & ORS. The Apex Court, while
permitting the sale of these properties to satisfy the compelling
demands of thousands of systemic fraud victims, erected
unyielding statutory guards: the sales could not fall below
90% of the stipulated circle rates, and the entirety of the
proceeds, clear of bare tax liabilities, had to be faithfully
secured in the designated SEBI-Sahara Account. This judicial
framework was designed as a remedial mechanism to protect
CRM (R) 13 OF 2026 20public savings; it was never intended to be weaponized as a
conduit for generating parallel, unrecorded liquid wealth.
Far from respecting this holy command, the opposite party
systematically subverted the Apex Court’s mandate by
transforming a court-sanctioned liquidation into an active,
multi-layered money laundering enterprise. The defense’s
contention that a violation of the Apex Court’s order merely
attracts the penalty of contempt is a flawed argument that
misconstrues the intersection of civil obedience and criminal
culpability. Armed with the knowledge of this directive, the
opposite party actively chose to operate under its shadow,
utilizing the protective cover of a Supreme Court-sanctioned
sale as an unprecedented opportunity to generate, launder,
and conceal massive quantities of undocumented cash
components. This is not a mere technical flouting of regulatory
conditions; it represents a deliberate, fraudulent deception
practiced upon the highest Court of the land. The opposite
party colourably used the judicial machinery as a structural
shield to siphon off capital that belonged to defrauded
investors, transmuting a process meant for restitution into a
fresh, distinct offense under the PMLA.
ii. Secondly, the Special Court’s finding is that the opposite party
was insulated from the crime because he was an independent
“land broker” outside the formal corporate payroll or
directorate of the Sahara Group represents a significant
CRM (R) 13 OF 2026 21misdirection in law. Section 3 of the PMLA is intentionally
broad, explicitly targeting any person who “whosoever directly
or indirectly attempts to indulge” in any process connected with
the proceeds of crime. One does not need to be a salaried
executive or a registered director to launder the proceeds of a
corporate fraud. By treating the opposite party’s freelance
status as a legal shield, the Special Court ignored the wide
statutory scope of the offense. Freelance brokers and external
financial conductors are fully integrated into the statutory net
the moment they knowingly facilitate the generation,
circulation, or layering of the proceeds of crime.
iii. Thirdly, the Special Court’s insistence on direct oral evidence
from individual retail depositors demonstrates a fundamental
misunderstanding of financial crime prosecutions. Money
laundering schemes are driven by paper trails, ledger
balances, and digital footprints, not by oral agreements with
everyday investors. During searches conducted under Section
17 of the PMLA at the residence of the opposite party, the
investigating agency recovered an extensive, multi-city
physical and digital cash ledger detailing un-booked
transactions worth a staggering ₹214.66 Crores, alongside
localized transaction slips showing a parallel cash layout of
₹76.29 Crores and a personal illicit “cut” of ₹5.75 Crores made
to the Opposite party. Faced with such substantial physical
and digital evidence, the statutory presumption under Section
CRM (R) 13 OF 2026 2224 was fully triggered. The opposite party offered no credible
explanation to account for these exclusive ledgers, and the
defence’s argument that these transactions merely constitute
an infraction under the Income Tax Act, 1961 is legally
untenable. Generating vast parallel cash components out of a
collapsed public deposit scheme cannot be colourably excused
as simple tax evasion. By ignoring this unexplained
documentary trail and focusing instead on the lack of direct
oral statements from individual depositors, the Special Court
engaged in an impermissible, microscopic dissection of verbal
evidence, arriving at a conclusion on facts that no reasonable
court could have reached.
iv. Fourthly, the Special Court committed a grave error by
treating the status or delay in the investigation of the predicate
offense as a reason to dilute the PMLA case. The defence’s
reliance on the closure of the Bhubaneshwar FIR involving a
minor sum cannot rescue the opposite party. As ruled in
Aditya Tripathi (supra), a PMLA prosecution is standalone and
distinct from the scheduled offense. The fact that the predicate
investigation is delayed or that the accused was not named in
the initial FIR does not affect the independent statutory
requirements of Section 45. Furthermore, the opposite party’s
ongoing orchestration and handling of multi-city cash
components constitutes a persistent process that continues as
long as the illicit gains remain in circulation, as settled in
CRM (R) 13 OF 2026 23
Pradeep Nirankarnath Sharma (supra) and Basudeb Bagchi
(supra). Generating unrecorded parallel cash components on
top of judicially managed asset sales constitutes a fresh,
continuing offense under the PMLA that is entirely separated
from the structural timeline of the primary scheduled FIR.
v. Fifthly, the Special Court’s reliance on 124 days of custody of
the opposite party to satisfy Article 21 represents a clear
statutory bypass of the legislative framework. While prolonged
pre-trial detention can become a factor under Section 436A of
the Cr.P.C. (now Section 479 of the BNSS, 2023), it only
applies when the accused has served at least half of the
maximum sentence prescribed for the offense. A period of 124
days falls far short of this threshold. As emphasized in
Kanhaiya Prasad (supra) and Basudeb Bagchi (supra),
economic offenses and white-collar crimes affecting public
funds must be treated as a “class apart,” and personal liberty
under Article 21 cannot be used to override the clear statutory
bars enacted by Parliament when the accused has failed to
show innocence on broad probabilities.
vi. Finally, this Court must note the administrative background of
this matter. By order of the Hon’ble the Chief Justice, and as
directed by the Vacation Division Bench on 5th June, 2026,
this cancellation application (CRM(R)-13/2026) was properly
aligned and consolidated with the main bail application
(CRM(R)-16/2026) before this Bench to avoid any conflict of
CRM (R) 13 OF 2026 24
views. Having considered both matters through a single,
comprehensive lens, it is clear that the lower court’s casual
approach fails to safeguard the collective interests of
thousands of defrauded investors. The opposite party has
totally failed to overcome the twin conditions of Section 45
PMLA, and allowing a perverse order of bail to stand would
derail a highly sensitive and ongoing investigation into the
parallel cash networks of this scheme.
39. On a comprehensive synthesis of the statutory framework of the PMLA
and the binding precedents of the Supreme Court analysed above, we
arrive at the following foundational legal principles:
i. The offense of money laundering under Section 3 of the
PMLA is a standalone, independent crime. Its statutory
vitality is not dependent on the continuous survival, speed,
or structural outcome of the predicate/scheduled offense.
The delay, stay, or formal closure of a primary FIR by a local
investigative agency does not automatically dissolve or dilute
the independent statutory requirements for bail under
Section 45 of the PMLA.
ii. In the prosecution of complex financial frauds and white-
collar crimes, the existence of unrecorded parallel cash
ledgers and digital transaction footprints found in the
exclusive possession of an accused carries primary
evidentiary weight at the stage of bail. A court cannot bypass
the statutory presumption inverted by Section 24 of the
CRM (R) 13 OF 2026 25PMLA by demanding direct oral statements from retail
depositors implicating the opposite party, as money
laundering is essentially an offense documented by paper
and digital trails rather than oral pacts.
iii. The legislative use of the expression “whosoever directly or
indirectly attempts to indulge” in Section 3 PMLA strips away
any formal corporate shield. Freelance brokers, independent
contractors, and external financial conductors are fully
integrated into the statutory net if they knowingly facilitate
the circulation, layering, or integration of the proceeds of
crime. Commercial nomenclatures cannot be used to bypass
the rigors of Section 3.
iv. Section 45 of the PMLA imposes an absolute constitutional
and statutory limitation on judicial discretion. General
considerations of pre-trial custody periods or standard
discretionary parameters under Section 439 of the Cr.P.C.
must bend before the mandatory command of the twin
conditions under Section 45. Liberty under Article 21 is
structurally balanced by the legislature; hence, a court has
no jurisdiction to grant bail unless it explicitly records a
finding on broad probabilities that the accused is not guilty
of such offence and that he is unlikely to commit any offence
while on bail.
CRM (R) 13 OF 2026 26
40. For the reasons we discussed above, the challenge brought by the
Enforcement Directorate must succeed. The order dated 14th
November, 2025 passed by the learned Chief Judge, City Sessions
Court, Calcutta, acting as the Designated Special Court under the
PMLA in ML Case No. 11 of 2025, suffers from inherent and patent
perversity, ignores substantial documentary and digital evidence, and
operates in direct violation of the mandatory provisions of Section 45
and Section 24 of the PMLA.
41. Because the underlying bail order was legally broken from its inception,
the prosecution is not required to establish any post-bail supervening
misconduct or witness tampering to justify its cancellation. The
opposite party has failed to discharge the heavy statutory burden
required to justify the grant of bail, rendering the Special Court’s
exercise of discretion a structural nullity.
42. Accordingly, C.R.M. (R) No. 13 of 2026 is allowed.
43. No order as costs.
44. The impugned order of bail dated 14th November, 2025 is hereby
quashed and set aside.
45. The opposite party, Jitendra Prasad Verma, is directed to surrender
before the learned Designated Special Court within a period of 72 hours
from the delivery of this judgment. Should the opposite party fail to
surrender within the stipulated time, the petitioner/Enforcement
Directorate is directed to take him into custody immediately in
accordance with the law.
46. The application is disposed of.
CRM (R) 13 OF 2026 27
47. Urgent certified copies of this judgment, if applied for, be supplied to
the parties upon compliance with all necessary legal formalities.
I AGREE
(RAJARSHI BHARADWAJ, J.) (UDAY KUMAR, J.)
Later:
1. After pronouncement of the judgment, the Advocate appearing for the
petitioner prays stay of operation of the judgment.
2. The prayer for stay is considered and rejected.
(RAJARSHI BHARADWAJ, J.) (UDAY KUMAR, J.)
