Women Accused Under PMLA: Proviso to Section 45 Relaxes Twin Conditions; Bail Governed by General Principles

Case: SANDEEPA VIRK v. DIRECTORATE OF ENFORCEMENT
Citation: 2025 DHC 12026
Court: Delhi High Court
Date: 27-12-2025
Coram: Hon’ble Dr. Justice Swarana Kanta Sharma

1. Introduction

This bail decision arises from an Enforcement Directorate (“DoE”) case under the Prevention of Money Laundering Act, 2002 (“PMLA”), registered as ECIR/HIU-II/24/2025, premised on a predicate FIR (FIR No. 91/2016, P.S. Phase-8, SAS Nagar, Mohali) alleging cheating and criminal breach of trust involving approximately ₹6 crores.

The applicant, Sandeepa Virk, sought regular bail after arrest on 12.08.2025 in proceedings alleging offences under Sections 3/4 PMLA. The DoE alleged that proceeds of crime were routed into the applicant’s accounts (about ₹1,03,30,000/-), and that tainted funds were used to acquire and hold immovable properties, including a Mumbai flat (Flat No. 2103, Andheri (West)) and two properties in Tilak Nagar, Delhi; it also alleged destruction of a mobile phone (electronic evidence).

The key issues were: (i) whether the applicant (a woman) had to satisfy the PMLA’s “twin conditions” for bail under Section 45; (ii) whether, on facts, continued custody was justified considering delay, the status of the predicate case, and the stage of investigation/trial.

2. Summary of the Judgment

The Delhi High Court granted regular bail to the applicant on a personal bond of ₹2,00,000/- with two sureties (one a family member), subject to standard conditions (passport surrender; no travel without permission; cooperate; non-tampering; regular appearance; keep phone active).

Crucially, the Court held that for a woman accused, the twin conditions under Section 45(1)(ii) PMLA need not be satisfied, relying on the Supreme Court’s decision in Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement: Criminal Appeal No. 212/2025. Bail would therefore be assessed on general bail principles, while still considering the gravity and circumstances.

On facts, the Court found continued incarceration unwarranted due to (inter alia) the age of alleged transactions (2008–2013), the ECIR being recorded in 2025, the applicant not being charge-sheeted/summoned in the predicate proceedings, partial refund of funds, completion of investigation and filing of the prosecution complaint, and the likelihood of delay given the predicate case’s status.

3. Analysis

3.1 Precedents Cited

The Court’s interpretation of Section 45 PMLA turned on a single, decisive authority:

  • Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement: Criminal Appeal No. 212/2025
    • Rule clarified: The first proviso to Section 45(1) operates as an exception to Section 45(1)(ii), so when a woman applies for bail, the twin conditions (i.e., court’s satisfaction that the accused is not guilty and will not commit an offence while on bail) need not be satisfied.
    • How it influenced this case: The DoE argued that the proviso confers discretion (“may be released”) and does not create an automatic entitlement. The High Court accepted that discretion remains, but held the legal threshold is altered: the Court is not required to apply Section 45(1)(ii)’s embargo to a woman accused, and may decide bail on general principles.

3.2 Legal Reasoning

The reasoning proceeds in two steps: (A) determining the governing bail standard under Section 45 PMLA; and (B) applying that standard to the facts.

(A) Governing standard for bail: Section 45 PMLA and the first proviso

The Court treated the Section 45 controversy as foundational. After quoting Shashi Bala, it held that the statutory embargo of the twin conditions is relaxable for women. The Court also addressed the DoE’s textual point (“may be released”), explaining that even if discretion persists, the application is still to be assessed on general bail principles (not on the heightened Section 45(1)(ii) threshold).

(B) Application on facts: why continued custody was found unnecessary

The Court marshalled a cluster of considerations, none treated as singularly determinative, but cumulatively persuasive:

  • Position in the predicate case: The applicant was not charge-sheeted in FIR No. 91/2016 after police investigation. In the complainant’s private complaint under Section 200 Cr.P.C., the JMFC declined cognizance/summoning against her. This did not legally bar PMLA proceedings, but it weighed in assessing the prima facie necessity of incarceration.
  • Delay and chronology: Alleged transactions were from 2008–2013; FIR was in 2016; ECIR was recorded only in 2025. The Court treated this timing as relevant to the proportionality of arrest and custody (especially after the prosecution complaint had been filed).
  • Partial restitution/refund: The Court noted an admitted position that about ₹2.7 crores had been returned to the complainant. Consequently, the Court narrowed the immediate “projection/concealment” narrative: at that stage it could not be assumed that the entire ₹5.5–6 crores remained laundered; the focus, prima facie, was closer to the balance.
  • Status of the principal accused: The predicate’s main accused had been declared a proclaimed offender in 2024 and remained unarrested in the PMLA proceedings, though appearing through counsel. The Court viewed the applicant’s continued custody, in that backdrop, as a factor favouring release (without declaring any illegality per se in prosecutorial choice).
  • Stage of proceedings: The applicant had been in custody since 12.08.2025 and the prosecution complaint was filed on 10.10.2025. With investigation “qua applicant” treated as complete and custodial interrogation not shown to be necessary, continued incarceration was found unjustified.
  • Likelihood of trial delay: The Court considered that the PMLA trial would take time (24 witnesses cited) and the predicate trial was stalled due to abscondence of the sole accused there. This supported bail on the principle that pre-trial detention should not become punitive.
What the Court did not decide: The Court expressly clarified that its observations are not on the merits. It did not finally adjudicate whether the applicant in fact laundered “proceeds of crime,” whether the property acquisitions are traceable to tainted funds, or whether the mobile-phone destruction allegation is proved.

3.3 Impact

The decision is significant for PMLA bail practice in three ways:

  • Operational clarity on Section 45 for women: By directly applying Shashi Bala, the Court reinforces that women applicants are not required to cross the “twin conditions” threshold, shifting the litigation centre of gravity to general bail factors (custody, necessity, proportionality, risk of absconding/tampering).
  • Fact-sensitive proportionality review: The Court’s emphasis on delay (transactions 2008–2013; ECIR 2025), completion of investigation, and predicate-case posture encourages a more structured proportionality assessment of incarceration even in economic offences.
  • Strategic implications for prosecution/defence: Prosecution may need to more concretely demonstrate (i) custody necessity post-complaint, and (ii) specific tampering/flight risks, rather than relying primarily on PMLA gravity; defence will likely foreground predicate-case outcomes, restitution/refunds, and long-drawn timelines as bail factors.

4. Complex Concepts Simplified

  • Predicate/Scheduled offence: The underlying offence listed in the PMLA Schedule (here, cheating under Section 420 IPC is treated as scheduled). Money laundering proceedings generally require “proceeds of crime” generated from such an offence.
  • Proceeds of crime: Property (money/assets) derived or obtained from criminal activity relating to a scheduled offence.
  • ECIR: The Enforcement Directorate’s internal case registration (akin to an FIR in conventional policing context), used to initiate PMLA inquiry.
  • Section 3 PMLA (money laundering): In broad terms, involvement in processes connected with proceeds of crime—such as possession, acquisition, use, concealment, and projecting/claiming it as untainted.
  • Section 45 “twin conditions”: A stricter bail test requiring the court to be satisfied (i) there are reasonable grounds to believe the accused is not guilty, and (ii) the accused is not likely to commit any offence while on bail.
  • First proviso to Section 45(1): A statutory carve-out allowing the court to consider bail for certain categories (including women) without applying the twin conditions in the same manner; per Shashi Bala, the twin conditions do not apply to women.
  • Triple test (general bail principles): A practical assessment of (i) flight risk, (ii) likelihood of tampering with evidence/influencing witnesses, and (iii) likelihood of repeating the offence.
  • Proclaimed offender/proclaimed person: A person declared by a court to be absconding/evading process, triggering special procedures for arrest and property attachment under criminal procedure.

5. Conclusion

The Delhi High Court’s decision reaffirms a now-settled principle: for women accused under the PMLA, the Section 45(1)(ii) twin conditions do not apply, and bail is to be considered on general principles, albeit with due regard to the seriousness of money laundering allegations.

On the facts, the Court treated the combination of (i) the applicant’s position in the predicate proceedings (not charge-sheeted/summoned), (ii) the long temporal gap before the ECIR, (iii) partial refund, (iv) completion of investigation and filing of complaint, and (v) likely delay, as sufficient to hold that further custody would be unjustified—thereby granting bail with safeguards to secure presence and protect the integrity of trial.