The July 1 ruling observed that given the nature of the case and the fact that the co-accused Chand was on bail, it “would not be just, fair and equitable to keep the applicant in jail” for his “continuing custody would amount to punishment pending trial”.   

“No material particulars or circumstances suggestive of applicant fleeing from justice or thwarting the course of justice or creating other troubles in the shape of repeating offences or intimidating witnesses and the like have been shown by opposite party,” the court said.

Justice Vikram D Chauhan of the Allahabad High Court emphasised the right to personal liberty in delayed trials. (Image enhanced using AI)

Allegations, defense

The ED alleged that a stone crusher unit in Himachal Pradesh, owned by Chand, had illegally mined sand and stone from the Beas riverbed and sold it in cash. Investigators claimed this cash was later used to buy another stone crusher unit, called Garhwal Stone Crusher, in Saharanpur, Uttar Pradesh, for around Rs 4.70 crore.

Advocate Sushant, appearing for the agency, alleged that Kumar was managing the daily affairs of the Himachal unit and held a 9 per cent share in the Uttar Pradesh unit for which he had paid Rs 20 lakh in cash.

Advocate Arun Kumar Sharma, on the other hand, argued that his client was not named in the FIR lodged in Himachal. “The applicant was not the owner of the stone crusher at Himachal Pradesh. Once no scheduled offence has been found by the investigating agency in Himachal Pradesh then the income generated at Himachal Pradesh cannot be considered as proceeds
of crime and as a result of the same Garhwal Stone Crusher would not be considered as proceeds of crime,” argued Sharma.

A scheduled offence or predicate offence is the primary offence based on which the money laundering probe agency files its case.

Considering the submissions, the court said that the entire money laundering case was built on six police complaints registered in Himachal Pradesh, but the investigation had been closed in four for want of evidence. Closure reports had been filed in the remaining two as well, the court added.

“Since no crime was ultimately established in any of these six cases, the court reasoned that there was no proven criminal activity to link the cash used for the Uttar Pradesh purchase back to,” the court said. 

On the separate complaint of illegal mining in Uttar Pradesh, the court found that while excess stock of minerals had indeed been found at the Garhwal unit, the investigation agency had not identified any specific property or amount as being proceeds of this alleged crime. 

The court also referred to several Supreme Court rulings holding that bail cannot be denied merely because a case involves an economic offence, and that prolonged custody without trial violates a person’s right to liberty.

Bail conditions

The order clarified that upon non adherence of any of the bail conditions, the Enforcement Directorate could move an application before the high court for the cancellation of the accused’s bail. 

Written by Avinash Verma (Avinash is an intern with The Indian Express)