Calcutta High Court Cancels PMLA Bail: ₹214 Crore Shadow Cash Network Exposes Statutory Perversity in Sahara-Linked Money Laundering Case
Background and Context
The Calcutta High Court was confronted with a significant question of law in an application moved by the Enforcement Directorate under Section 439(2) of the Code of Criminal Procedure, 1973 — now mirrored under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — seeking the cancellation of regular bail granted to one Jitendra Prasad Verma by the Designated Special Court operating under the Prevention of Money Laundering Act, 2002 (PMLA) in ML Case No. 11 of 2025.
The bail order under challenge was dated 14th November, 2025, passed by the Chief Judge, City Sessions Court, Calcutta, in connection with allegations of an offence under Section 3 punishable under Section 4 of the PMLA. The judgment of the Division Bench represents a robust reaffirmation of the mandatory statutory architecture governing bail in money laundering matters and the two legally distinct pathways through which bail cancellation may be pursued.
Origin of the Money Laundering Investigation
The enforcement action did not emerge in isolation. The investigation traces its roots to the systemic financial collapse of the Sahara Group of Companies, which had allegedly collected enormous sums from retail depositors across the country under the guise of housing schemes, real estate development, and high-yield investment ventures. Rather than deploying these funds in legitimate commercial activity, the monies were allegedly routed through a web of shadow entities, fictitious brokers, and unrecorded cash conduits.
The Supreme Court of India, in its landmark order dated 11th July 2016 passed in SEBI VS. SAHARA INDIA REAL ESTATE CORPN. LTD. & ORS., had sanctioned the sale of Sahara Group properties as part of a strictly monitored judicial restitution exercise. Two cardinal conditions governed this process: first, that no property could be sold below 90% of the applicable circle rate; and second, that all net proceeds must be deposited into the designated SEBI-Sahara Account for the benefit of defrauded investors.
The Enforcement Directorate alleged that this court-supervised liquidation exercise was systematically subverted by generating undisclosed parallel cash components — effectively transforming a judicial restitution mechanism into a fresh money laundering enterprise.
Role Attributed to the Accused
The Enforcement Directorate placed Jitendra Prasad Verma at the operational centre of this cash network within the Calcutta jurisdiction. Far from being a peripheral market participant, the agency's investigation characterised him as the principal financial coordinator for illicit cash flows arising from the Sahara Group's property transactions.
Searches executed under Section 17 of the PMLA at his residential premises yielded:
- Multi-city physical and digital cash ledgers documenting unrecorded transactions aggregating to ₹66 Crores
- Evidence of coordinated cash movements spanning 28 cities totalling ₹76.29 Crores
- A transaction slip from the Faizabad sector explicitly recording a personal commission of ₹5.75 Crores paid to Mr. Verma for facilitating these secret transfers
The combined documentary and digital trail recovered from his exclusive possession was projected to reflect an unrecorded cash network of ₹214.66 Crores in aggregate.
Grounds on Which the Special Court Had Granted Bail
The Enforcement Directorate challenged the bail order on the ground that the Special Court had proceeded on three legally untenable bases:
Corporate detachment theory: The Special Court held that because Mr. Verma was not a salaried employee, director, or officially designated officer within the Sahara corporate hierarchy, he could not be held answerable for the group's financial conduct.
Absence of oral depositor testimony: The court placed excessive weight on the fact that no individual depositor had come forward to give a direct oral statement linking Mr. Verma to the alleged fraud, concluding that direct ocular evidence was lacking.
Pre-trial custody period and Article 21 concerns: The Special Court noted that Mr. Verma had spent 124 days in custody and, with the predicate investigation stalled, further detention would violate his fundamental right to personal liberty under Article 21 of the Constitution.
Submissions of the Enforcement Directorate
Mr. Arijit Chakrabarty, appearing for the Enforcement Directorate, characterised the impugned order not merely as an erroneous exercise of discretion but as a structural nullity — one that openly defied the mandatory statutory framework of Section 45 of the PMLA.
On the Nature of the PMLA Offence
Relying on the Supreme Court's authoritative ruling in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. [(2023) 12 SCC 1], learned counsel emphasised that the twin conditions under Section 45(1) of the PMLA, as amended in 2018, constitute an unyielding and constitutionally valid statutory command. A court at the bail stage is not required to conduct a mini-trial, but it must assess, on broad probabilities, whether the assessee/accused has discharged the heavy burden of demonstrating the absence of criminal intent. By focusing exclusively on the lack of oral witness statements while ignoring a ₹214.66 Crore documentary trail found in the exclusive possession of the accused, the Special Court inverted this standard entirely.