Authority: Supreme Court of India, Criminal Appellate Jurisdiction

Order Date: 14 October 2026

Case Overview

  • Parties: Appellant/Accused Sanjay Sureka (also referred to as Sanjay Kumar Sureka) vs. Directorate of Enforcement (ED).
  • Procedural History: The appellant challenged the High Court of Calcutta’s order in CRM (R) 84/2025 dated 14‑11‑2025, which rejected his regular bail application under Section 439 of the Code of Criminal Procedure, 1973 read with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA).
  • Background: The matter stems from a Corporate Insolvency Resolution Process (CIRP) initiated against M/s Concast Steel and Power Limited on 07‑11‑2017, which later culminated in liquidation. On 08‑10‑2021, the liquidator filed an application under Sections 43, 45 and 66 of the Insolvency and Bankruptcy Code, 2016 alleging fraudulent transactions by the company’s management. The NCLT dismissed this application; the order was not appealed.
  • Criminal Allegations: On 06‑09‑2022, the CBI registered FIR No. RCBSK‑2022‑E‑0001 under IPC Sections 120B, 420, 477A and under Sections 13(1)(d) & 13(2) of the Prevention of Corruption Act, 1988. An Economic Offence Information Report (ECIR) (KLZO‑1/10/2023 dated 24‑03‑2023) was filed against the appellant and four others.
  • Nature of Offence: The appellant is alleged to have orchestrated a complex web of financial transactions to fraudulently inflate Concast Steel’s turnover, obtain credit from a consortium of banks led by the State Bank of India, and divert the funds for personal enrichment through 62 shell companies. The alleged proceeds of crime total Rs 6,210.72 crore, of which only Rs 777.10 crore have been attached under PMLA.
  • Key Figures: 34 persons were appointed as dummy directors; 20 companies were managed by the appellant’s relatives. The appellant was arrested by the ED on 18‑12‑2024 and has been in custody for approximately 20 months. The maximum punishment under PMLA is seven years.
  • Procedural Submissions: The appellant’s counsel argued that the arrest was vitiated due to non‑compliance with Sections 19(1) and 19(2) of PMLA (delay of five days in forwarding the arrest order and material to the adjudicating authority) and that the “Grounds of Arrest” and “Reasons to Believe” were virtually identical, indicating a lack of proper deliberation.
  • Prosecution Timeline: The ED filed the primary prosecution complaint on 15‑02‑2025, followed by supplementary complaints on 11‑07‑2025 and 01‑07‑2026. Collectively, the complaints name 97 accused persons, list 48 prosecution witnesses, and rely on approximately 15,000 pages of documents. The investigation against other accused remains pending.
  • Cited Precedents: Union of India v. K.A. Najeeb (2021) 3 SCC 713; Arvind Dham v. Directorate of Enforcement, 2026 SCC OnLine SC 30; Basudeb Bagchi & Anr. v. Enforcement Directorate, SLP (Crl.) 7613/2026; Arvind Walia v. Directorate of Enforcement & Anr., SLP (Crl.) 2461/2026; Padam Chand Jain v. Enforcement Directorate, SLP (Crl.) 17476/2024.
  • ED’s Counter‑Argument: The ED contended that the appellant was produced before the Special Court within 24 hours, and that the five‑day delay in forwarding material does not automatically invalidate the arrest because Section 19(2) does not prescribe a strict timeline.
  • Court’s Reasoning: The Court held that the absence of a fixed timeline for forwarding arrest material means a reasonable, expeditious transfer suffices. It also recognized the massive volume of evidence (thousands of pages, ~98 witnesses) making a swift trial unlikely, and noted that the appellant has already been in custody for over 20 months for an offence carrying a maximum of seven years.
  • Constitutional Considerations: The Court emphasized that the twin conditions under Section 45 of PMLA cannot override Article 21 of the Constitution, citing Manish Sisodia v. Directorate of Enforcement (2024 SCC OnLine SC 1920). Prolonged pre‑trial detention would contravene constitutional safeguards.

Final Outcome

  • The Supreme Court allowed the appellant’s regular bail application.
  • Bail is conditioned on the appellant furnishing bail bonds satisfactory to the trial court, depositing his passport with the trial court, and not leaving India without prior permission.
  • While on bail, the appellant must not attempt to influence witnesses or tamper with evidence; breach may lead to bail cancellation.
  • The observations made are not to be treated as findings on the merits of the case.
  • The appeal is allowed; any pending applications stand disposed of.

Topics: Bail, Money Laundering, PMLA