Criminal Defense · PMLA & Economic Offences

Bail in PMLA Cases After Long Custody: Section 45, Article 21 and the Supreme Court's October 2026 Ruling in Sanjay Sureka

By Shri Law Editorial Board · October 19, 2026

Section 45 of the PMLA makes bail difficult, but not impossible. On 14 October 2026 the Supreme Court granted bail to an accused in a Rs. 6,210 crore money-laundering case after more than 20 months in custody, holding that the twin conditions cannot override Article 21, while also ruling that a five-day delay in forwarding arrest material under Section 19(2) did not make the arrest illegal. This article explains the statutory framework, the arrest safeguards, when long custody justifies bail, and what an accused should prepare.

An arrest by the Directorate of Enforcement (ED) under the Prevention of Money-Laundering Act, 2002 (PMLA) is often followed by a long period in custody. Section 45 of the Act imposes conditions on bail that are far stricter than those in ordinary criminal cases, and many accused persons and their families assume that bail cannot realistically be obtained until the trial ends.

That assumption is not accurate. Over the past two years the Supreme Court has repeatedly held that the right to a speedy trial under Article 21 of the Constitution continues to operate in PMLA cases. On 14 October 2026, in Sanjay Sureka v. Directorate of Enforcement, the Court applied that principle again. This article explains the statutory framework, the safeguards that apply at the time of arrest, the circumstances in which long custody justifies bail, and the limits of that principle. It reflects the law as verified on 19 October 2026.

THE STATUTORY FRAMEWORK

Under Section 4 of the PMLA, the offence of money laundering is punishable with rigorous imprisonment of not less than three years, which may extend to seven years. The maximum is ten years where the proceeds of crime relate to an offence under paragraph 2 of Part A of the Schedule.

Section 45(1) provides that, notwithstanding anything in the Code of Criminal Procedure, no person accused of an offence under the Act shall be released on bail unless the Public Prosecutor has been given an opportunity to oppose the application, and, where the Public Prosecutor opposes it, the court is satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence and is not likely to commit any offence while on bail. These are commonly called the twin conditions.

The proviso to Section 45(1) relaxes the position for a person under sixteen years of age, a woman, a person who is sick or infirm, and a person accused, alone or with others, of laundering a sum of less than one crore rupees. Such a person may be released on bail if the Special Court so directs.

In Vijay Madanlal Choudhary v. Union of India, decided on 27 July 2022, a three-Judge Bench of the Supreme Court upheld the validity of the twin conditions. The same judgment held that Section 436A of the Code of Criminal Procedure, which entitles an undertrial who has served one-half of the maximum sentence to release, can be invoked by a person accused under the PMLA. Section 436A has since been replaced by Section 479 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS). Review petitions against Vijay Madanlal Choudhary are pending before the Supreme Court; until they are decided, the judgment remains binding.

SAFEGUARDS AT THE STAGE OF ARREST

Section 19(1) permits an authorised officer of the ED to arrest a person only if, on the basis of material in the officer's possession, the officer has reason to believe, recorded in writing, that the person is guilty of an offence under the Act. The arrested person must be informed of the grounds of arrest as soon as may be. Section 19(2) requires the officer, immediately after the arrest, to forward a copy of the order and the material to the Adjudicating Authority in a sealed envelope. Section 19(3) requires the arrested person to be produced before the Special Court or the competent Magistrate within twenty-four hours.

In Pankaj Bansal v. Union of India, decided on 3 October 2023, the Supreme Court held that it would be necessary, henceforth, that a copy of the written grounds of arrest be furnished to the arrested person as a matter of course and without exception. In Ram Kishor Arora v. Directorate of Enforcement, decided on 15 December 2023, the Court held that Pankaj Bansal operates prospectively from 3 October 2023, and that informing the accused of the grounds orally at the time of arrest, followed by a written copy within twenty-four hours, is sufficient compliance with Section 19 and Article 22(1).

In Sanjay Sureka, the appellant contended that the arrest material had been forwarded to the Adjudicating Authority five days after his arrest, in breach of Section 19(2). The Supreme Court rejected the contention. It held that the PMLA does not prescribe a timeline, that 'immediately' requires the material to be transferred expeditiously and simultaneously, and that it does not mean within twenty-four hours or within a set time limit. A delay beyond what is absolutely necessary is not a violation, and on the facts the five-day delay did not jeopardise the arrest (paragraph 10).

The practical lesson is that challenges to the legality of an arrest succeed only where a core safeguard has been breached, such as the failure to furnish written grounds of arrest. A procedural delay that the Court regards as explained will not, by itself, invalidate the arrest.

WHEN LONG CUSTODY JUSTIFIES BAIL

The decisive development in PMLA bail law has been the recognition that Section 45 cannot be used to keep an accused in custody indefinitely while the trial is pending. In Manish Sisodia v. Directorate of Enforcement, decided on 9 August 2024, the appellant had been in custody for about seventeen months and the trial had not begun. The Court held that prolonged incarceration without trial would deprive him of his right to liberty under Article 21 and granted bail.

In V. Senthil Balaji v. Deputy Director, Directorate of Enforcement, decided on 26 September 2024, the Court held that Section 45(1)(ii) does not confer power on the State to detain an accused for an unreasonably long time, particularly where there is no possibility of the trial concluding within a reasonable time. Constitutional courts should consider granting bail where the trial is likely to continue beyond reasonable limits. What is reasonable depends on factors including the minimum and maximum sentence and the stringency of the bail conditions.

In Prem Prakash v. Union of India, decided on 28 August 2024, the Court held that even under the PMLA bail is the rule and jail is the exception, and that Section 45 does not rewrite this principle. It also held that the prosecution must first establish the foundational facts before the reverse burden under Section 24 operates, and that a statement made under Section 50 by an accused who is in the custody of the same agency cannot be used against him in another PMLA case.

In Arvind Dham v. Directorate of Enforcement, 2026 INSC 12, decided on 6 January 2026, the Court granted bail after about sixteen months of custody. It held that statutory restrictions cannot be permitted to result in indefinite pre-trial detention in violation of Article 21 (paragraph 16), and that economic offences cannot be treated as a homogeneous class warranting a blanket denial of bail (paragraph 18).

THE OCTOBER 2026 RULING IN SANJAY SUREKA

Sanjay Sureka v. Directorate of Enforcement, 2026 INSC 1124, was decided on 14 October 2026 by a Bench of Aravind Kumar and Vipul M. Pancholi, JJ. The prosecution alleged that companies of the appellant's group had obtained credit facilities from a consortium of banks and diverted the funds through shell companies, with alleged proceeds of crime of about Rs. 6,210 crore. The appellant had been arrested on 18 December 2024 and had been in custody for more than twenty months. Prosecution complaints running to about 15,000 pages had been filed against 97 accused persons.

The Court acknowledged that bail conditions under the PMLA are stringent and that bail is granted only in rare circumstances, but observed that process must not be turned into a punishment unto itself (paragraph 9). It noted that the investigation against the appellant was complete and that the trial could not be concluded soon (paragraph 11). Relying on Manish Sisodia, it held that the twin conditions under Section 45 cannot override the constitutional safeguards under Article 21 (paragraph 12), and that the appellant must not be subjected to the rigours of custody as long as the trial is pending (paragraph 13).

Bail was granted on conditions to be fixed by the trial court, including deposit of the passport, a prohibition on leaving the country without permission, and a direction not to influence witnesses or tamper with evidence (paragraphs 13 to 15). The Court clarified that its observations are not findings on the merits (paragraph 16). The judgment is marked non-reportable, but it applies principles laid down in reported decisions of the Court.

THE LIMITS OF THE PROLONGED-CUSTODY PRINCIPLE

Long custody is not an automatic ground for bail. In Union of India v. Kanhaiya Prasad, decided on 13 February 2025, the Supreme Court set aside a bail order of the High Court because it did not record the satisfaction required by Section 45, and remitted the matter for fresh consideration. In Udhaw Singh v. Enforcement Directorate, 2025 INSC 247, decided on 17 February 2025, the Court explained that in Kanhaiya Prasad the accused had been in custody for less than seven months and there was no finding that the trial would be unreasonably delayed. Where those features were present, as in Udhaw Singh, where only one of 225 witnesses had been examined, bail was granted.

The factors that have weighed with the Court include the period already spent in custody measured against the maximum sentence; whether the investigation against the accused is complete; the number of accused persons, witnesses and documents; whether the trial has begun and whether delay is attributable to the accused or to the prosecution; and whether concerns about flight or interference with witnesses can be addressed by conditions.

ARREST AFTER THE SPECIAL COURT TAKES COGNIZANCE

A distinct situation arises where the accused was not arrested during the investigation. In Tarsem Lal v. Directorate of Enforcement, 2024 INSC 434, decided on 16 May 2024, the Supreme Court held that after the Special Court takes cognizance of a complaint under Section 44(1)(b), the ED is powerless to arrest an accused named in that complaint. An accused who appears in response to a summons is not to be treated as being in custody and is not required to apply for bail; the Special Court may take a bond. If the ED wants custody for further investigation, it must apply to the Special Court, which may permit it only if satisfied, for reasons recorded, that custodial interrogation is required.

DOCUMENTS TO GATHER

The following are usually relevant to a PMLA bail application or a challenge to an arrest: the arrest order, the written grounds of arrest and the time at which they were furnished; the remand orders; the ECIR number and the predicate FIR or complaint for the scheduled offence, with its current status; the prosecution complaint and any supplementary complaints, with the list of accused, witnesses and documents; the order of cognizance; the order sheets of the Special Court showing the stage of trial and the reasons for adjournments; the custody certificate; medical records, where the proviso to Section 45(1) may apply; and earlier bail orders in the same case, including orders in favour of co-accused.

PRACTICAL SUMMARY

Section 45 of the PMLA makes bail difficult but does not displace Article 21. Where an accused has spent a substantial period in custody, the investigation against him is complete, and the trial is unlikely to conclude within a reasonable time, the Supreme Court has repeatedly granted bail notwithstanding the twin conditions, and Sanjay Sureka confirms that approach as of October 2026. A short period of custody, by contrast, does not attract this principle, and a court granting bail must still address Section 45. Challenges to the arrest itself should focus on core safeguards such as written grounds of arrest; an explained delay in forwarding material under Section 19(2) will not by itself invalidate the arrest. Where cognizance has already been taken and the accused was not arrested, Tarsem Lal governs. Each case depends on its record, and a careful review of the dates, the stage of trial and the reasons for delay should precede any application.

This article is intended for general information and does not constitute legal advice. The applicable law and the facts of each case should be examined before any action is taken.

Key Authorities Cited

Sanjay Sureka @ Sanjay Kumar Sureka v. Directorate of Enforcement — Supreme Court of India, October 14, 2026, 2026 INSC 1124; Criminal Appeal No. 4904 of 2026 (paras 9, 10, 11, 12, 13, 16)
Vijay Madanlal Choudhary v. Union of India — Supreme Court of India, July 27, 2022, SLP (Crl.) No. 4634 of 2014; 2022 LiveLaw (SC) 633
Pankaj Bansal v. Union of India — Supreme Court of India, October 3, 2023, 2023 INSC 866
Ram Kishor Arora v. Directorate of Enforcement — Supreme Court of India, December 15, 2023, (2024) 7 SCC 599
Tarsem Lal v. Directorate of Enforcement — Supreme Court of India, May 16, 2024, 2024 INSC 434 (paras 20, 21, 23)
Manish Sisodia v. Directorate of Enforcement — Supreme Court of India, August 9, 2024, 2024 INSC 595
Prem Prakash v. Union of India through the Directorate of Enforcement — Supreme Court of India, August 28, 2024, 2024 INSC 637
V. Senthil Balaji v. Deputy Director, Directorate of Enforcement — Supreme Court of India, September 26, 2024, 2024 INSC 739
Union of India v. Kanhaiya Prasad — Supreme Court of India, February 13, 2025, Criminal Appeal No. 728 of 2025
Udhaw Singh v. Enforcement Directorate — Supreme Court of India, February 17, 2025, 2025 INSC 247
Arvind Dham v. Directorate of Enforcement — Supreme Court of India, January 6, 2026, 2026 INSC 12 (paras 16, 18)

Statutory Provisions

Prevention of Money-Laundering Act, 2002 — Section 4 (punishment: three to seven years; up to ten years for proceeds relating to paragraph 2 of Part A of the Schedule)
Prevention of Money-Laundering Act, 2002 — Section 19(1), (2) and (3) (power of arrest; grounds of arrest; forwarding of order and material to the Adjudicating Authority; production within twenty-four hours)
Prevention of Money-Laundering Act, 2002 — Section 44(1)(b) (cognizance by the Special Court on a complaint)
Prevention of Money-Laundering Act, 2002 — Section 45(1) and proviso (twin conditions for bail; relaxation for persons under sixteen, women, the sick or infirm, and amounts below one crore rupees)
Bharatiya Nagarik Suraksha Sanhita, 2023 — Section 479 (maximum period of detention of an undertrial; corresponds to Section 436A CrPC)
Constitution of India — Article 21 (protection of life and personal liberty, including the right to a speedy trial) and Article 22(1) (right to be informed of the grounds of arrest)

Frequently Asked Questions

Can bail be granted under the PMLA even if the twin conditions in Section 45 are not satisfied?

Yes, in cases of prolonged custody. The Supreme Court has held that Section 45 does not permit an accused to be detained for an unreasonably long time where the trial is unlikely to conclude within a reasonable period. In Sanjay Sureka v. Directorate of Enforcement (14 October 2026), relying on Manish Sisodia, it held that the twin conditions cannot override the constitutional safeguards under Article 21. Where custody is short and there is no finding of unreasonable delay, the court must apply Section 45.

How long must an accused be in custody before delay becomes a ground for PMLA bail?

There is no fixed period. The Supreme Court has granted bail after about fourteen months in Udhaw Singh, sixteen months in Arvind Dham, seventeen months in Manish Sisodia and more than twenty months in Sanjay Sureka, but has declined to apply the principle where custody was under seven months and no unreasonable delay was found, as explained in Udhaw Singh. The court considers custody against the maximum sentence, the stage of trial, the volume of evidence and the cause of delay.

Does a delay in sending the arrest material to the Adjudicating Authority make an ED arrest illegal?

Not by itself. In Sanjay Sureka, the Supreme Court held that 'immediately' in Section 19(2) PMLA requires expeditious and simultaneous transfer but does not mean within twenty-four hours or a set time limit, and that a five-day delay on the facts did not jeopardise the arrest.

Must the ED give the grounds of arrest in writing?

Yes. In Pankaj Bansal v. Union of India (3 October 2023), the Supreme Court held that a copy of the written grounds of arrest must be furnished to the arrested person as a matter of course. In Ram Kishor Arora (15 December 2023), it held that this applies to arrests from 3 October 2023, and that oral communication at the time of arrest followed by written grounds within twenty-four hours is sufficient.

Can the ED arrest me after the Special Court has taken cognizance of the complaint?

Not if you are named as an accused in that complaint. In Tarsem Lal v. Directorate of Enforcement (16 May 2024), the Supreme Court held that after cognizance under Section 44(1)(b), the ED cannot arrest such an accused. An accused who appears on summons is not in custody and need not apply for bail. If the ED seeks custody, it must apply to the Special Court, which may allow it only if custodial interrogation is shown to be necessary.

Who benefits from the proviso to Section 45 PMLA?

A person under sixteen years of age, a woman, a person who is sick or infirm, and a person accused, alone or with others, of laundering a sum of less than one crore rupees may be released on bail if the Special Court so directs, without the twin conditions being applied in the same way.

Is Vijay Madanlal Choudhary still good law?

Yes. Review petitions against the 2022 judgment are pending before the Supreme Court, but until they are decided the judgment, including its upholding of the twin conditions and its holding that Section 436A CrPC (now Section 479 BNSS) can be invoked by a PMLA accused, remains binding.