Judgement Summary: Supreme Court grants bail to Tamil Nadu minister Senthil Balaji in PMLA case

A Division Bench of Justices Abhay Oka and Augustine George Masih put an end to the 15-month long incarceration of former Tamil Nadu transport minister V. Senthil Balaji on 26 September 2024 and granted him bail. Even as he awaits trial, Balaji was reinstated as a cabinet minister in Chief Minister Stalin’s DMK government on 29 September. 

Balaji had been arrested by the Enforcement Directorate (ED) on 14 June 2023, for allegedly promising jobs in exchange for money. The alleged cash-for-jobs scheme led to the filing of three FIRs (‘First Information Report’) between 2015 and 2018, under the Prevention of Money-Laundering Act, 2002 (PMLA). One of the FIRs contained the names of 2,000 accused individuals and 550 witnesses. 

The key piece of evidence for the ED was an electronic spreadsheet with the file title “CS AC”. It was found on a pen drive in Balaji’s home and allegedly contained the amounts received for each job. Counsel for the defence contested this, claiming that the spreadsheet contained details of Balaji’s earnings, including his salary as a member of the legislative assembly and his agriculture income. 

In the bail hearing, Solicitor General Tushar Mehta raised concerns about Balaji influencing witnesses if he was out on bail. Mehta brought up Y. Balaji vs Karthik Desari (2023), another case where Bajali was alleged to have taken bribes from persons aspiring for appointments as bus conductors and drivers. In that case, the Court ordered additional offences under the Prevention of Corruption Act (1988) to be registered against the accused when it was found that the accused used his position as a minister to gain a favourable settlement.

In the present case, the Court noted Balaji was accused of violating the PMLA generally, and not any of the scheduled offences under Part A of the statute. This meant that the maximum sentence Balaji could be given was seven years of imprisonment. Having already served 15 months in prison, that would mean Balaji had served 18 percent of the maximum sentence and more than a third of the minimum sentence of three years without the benefit of a trial. 

The Court also took note of the voluminous nature of the FIRs. Briefly discussing the lengthiest FIR, the Court predicted a three to four-year timeframe to conclude a trial that involved charges against 2000 people and testimony from 550 witnesses. By this time, the Court reasoned, Balaji would have already served the minimum sentence of three years. 

While advancing this reasoning around trial timelines, the Court relied on its decision in Union of India v K.A. Najeeb (2021), which said “the rigours of such [bail] provisions will melt down where there is no likelihood of trial being completed within a reasonable time and the period of incarceration already undergone has exceeded a substantial part of the prescribed sentence.”

To counter the argument that Najeeb has since been overturned, the Court cited a decision from last month: Manish Sisodia v. Directorate of Enforcement (2024). The Sisodia case presented circumstances familiar to Balaji, with the Court saying in that case saying: 

“[…] 493 witnesses have been named. The case involves thousands of pages of documents and over a lakh pages of digitized documents. It is thus clear that there is not even the remotest possibility of the trial being concluded in the near future. In our view, keeping the appellant behind the bars for an unlimited period of time in the hope of speedy completion of trial would deprive his fundamental right to liberty under Article 21 of the Constitution.” 

In Balaji, the Court acknowledged that special statues had separate bail provisions to make granting bail harder for certain offences. But it also noted that the higher threshold would warrant “expeditious disposal” to prevent 15-month incarcerations like Balaji’s from becoming the new norm. In the Court’s words, “inordinate delay in the conclusion of the trial and the higher threshold for the grant of bail cannot go together.”

The Court outlined a set of factors that would determine whether the accused was being held for a reasonable time: 1) the provisions under which the accused is being held, 2) the duration of the maximum and minimum sentences for the offence, 3) whether a statute provides for a higher threshold or ‘stringent conditions’ for granting bail and 4) any outer time limits prescribed by law for completion of a trial. As a safety valve, the Court said, the higher courts could always exercise the power of granting bail “on the grounds of violation of Part III of the Constitution of India.” 

While granting bail to Balaji, and as a concession to the prosecution’s argument about Balaji being a man of influence, the Court laid down some “stringent conditions”: 1) a Rs 25 lakh bond, 2) passport surrender, 3) appearing before the ED every Monday and Friday, 4) appearing in Court and cooperating with it, and 5) prohibition on directly or indirectly communicating with witnesses or victims. 

The Court’s decision in this case, and its express reference to Sisodia, is yet another indication of its resolve to impose fetters on the prosecution’s use of the bail provisions in the PMLA. The apparent mountain of evidence—550 witnesses—worked towards the ED’s detriment, with the Court determining that to be a factor supporting a grant of bail. 

With this case, the Court has added to the jurisprudence on reasonable length of time to imprison someone without bail. As in Sisodia, the Court here reiterated that bail is possible if an accused is in jail for a long time without stated reasons. As things stand, the factors created by the Court are in the manner of suggestions, and the Court can only grant relief after the “reasonable time” has passed. It will be interesting to see if the next step towards a more progressive special statute jurisprudence involves the active creation of preventive measures with regard to arrest.