“Sick and Infirm” Is Not an Automatic Bypass to PMLA’s Twin Conditions: Delhi High Court’s Gravity-Centric Bail Standard in Mega Economic Offences

Introduction

In ARVIND DHAM v. Directorate of Enforcement (2025 DHC 7016), the Delhi High Court (per Justice Ravinder Dudeja) refused regular bail to Mr. Arvind Dham, promoter of the Amtek Group, in a money-laundering prosecution under the Prevention of Money Laundering Act, 2002 (PMLA). The decision engages with the tension between Article 21’s liberty and speedy-trial guarantees and the PMLA’s stringent bail regime, particularly in the context of alleged mega frauds and systemic siphoning of public funds.

The case arises from Enforcement Directorate (ED) investigations (ECIR/GNZO/13-14/2024 and ECIR/GNZO/14/2024) into alleged diversion and laundering of loan funds exceeding ₹26,000 crores by Amtek Group entities (including Amtek Auto Ltd., ACIL Ltd., Metalyst Forgings Ltd., Castex Technologies Ltd., and ARGL Ltd.), founded upon CBI FIRs and SFIO findings. The ED alleges multi-layered corporate manipulation, inflation of assets, use of shell companies, and concealment of beneficial ownership, causing colossal losses to public sector banks.

The petitioner sought bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) read with Section 45 PMLA, primarily:

• Invoking Article 21 and the right to speedy trial, citing a year-long custody without cognizance in predicate offences.
• Invoking the first proviso to Section 45 PMLA as a “sick and infirm” person to bypass the twin conditions.
• Arguing compliance with earlier interim bail and disputing ED’s allegations of tampering and influence.

The ED opposed bail, emphasising the scale and sophistication of the fraud (total bank exposure alleged at ₹38,760 crores), the petitioner’s central role, concrete instances of obstruction (e.g., undervalued alienations post-search, influencing a dummy director), and the insufficiency of medical grounds as per AIIMS Medical Board.

Summary of the Judgment

The Court dismissed the bail application, holding:

• The offence alleged is of exceptional magnitude, involving a sustained, sophisticated design to siphon public funds, which gravely impacts the financial system and public confidence.
• The PMLA twin conditions under Section 45 apply with full rigor; on the material presented, the Court is not satisfied that there are reasonable grounds to believe the applicant is not guilty, nor that he is unlikely to commit an offence while on bail.
• Even if the “triple test” (flight risk, tampering, reoffending) is considered, there are specific, non-speculative instances indicating obstruction and tampering (e.g., undervalued sales post-ED search; instructions to a witness/dummy director not to cooperate).
• “Sick and infirm” under the first proviso to Section 45 is not an automatic passport to bail. Based on AIIMS and hospital reports noting non-critical, manageable conditions and recommending a day-care coronary angiography, custodial medical care is adequate.
• Prolonged incarceration per se (approximately one year) is insufficient to override statutory restraints in cases of mega economic offences. Precedents like Manish Sisodia v. ED and K.A. Najeeb were distinguished on facts and context.
• At the bail stage, Section 24 PMLA’s presumption as to proceeds of crime operates; the evidentiary materials (transaction audits, Section 50 statements, asset inflation, shell entities) cannot be ignored.

The Court underscored that observations are confined to bail and do not touch the merits of the trial.

Analysis

Precedents Cited and Their Influence

• State of Gujarat v. Mohanlal Jitamalji Porwal (1987) 2 SCC 364
  The Court leaned on the principle that economic offences are of a distinct class with far-reaching societal consequences and should be approached differently at the bail stage. This case underpinned the gravity-centric approach that public funds’ defalcation erodes public trust in financial institutions.
• Nimmagadda Prasad v. CBI (2013) 7 SCC 466
  Cited for the proposition that economic offences usually involve deep-rooted conspiracies and significant loss to the exchequer, justifying stringent bail standards. It aligns with the ED’s case theory of multi-year, layered transactions and asset inflation.
• Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46
  Crucial for two reasons: (i) the seriousness of money-laundering; and (ii) at bail, the court considers “broad probabilities” and the statutory Section 24 presumption that the property is tainted, shifting the burden to the accused to show otherwise. The Court explicitly invoked this to hold the petitioner had not met the threshold of showing reasonable grounds of non-guilt.
• Vijay Madanlal Choudhary v. Union of India
  Reaffirmed the legislative intent of a stringent bail regime under Section 45 PMLA and the societal harm caused by money laundering; the High Court considered itself bound to apply the twin conditions robustly.
• State of Bihar v. Amit Kumar (2017) 13 SCC 751
  Employed to counter the “delay equals bail” narrative. Even where trials are protracted due to complexity, bail may be denied in grave economic offences to preserve process integrity and public confidence.
• Y.S. Jagan Mohan Reddy v. CBI (2013) 7 SCC 439
  Relied upon for the real risk of influence over witnesses by powerful economic offenders, validating the ED’s tampering concerns. Here, alleged instructions to a dummy director not to cooperate and undervalued asset alienations post-search were cited as concrete examples.
• Classic bail precedents on the exercise of discretion and relevant factors:
  • Kalyan Chandra Sarkar v. Rajesh Ranjan @ Pappu Yadav: Reasons must exist for granting bail in serious offences; nature of accusation and risk of tampering matter.
  • Ram Govind Upadhyay v. Sudarshan Singh; Prahlad Singh Bhati v. NCT of Delhi: Emphasise a judicious, fact-sensitive approach; seriousness and public interest weigh significantly.
  • Sanjay Chandra v. CBI (2G Bail): While liberty is vital, seriousness of charge and punishment also bear upon bail; right to bail is not to be denied merely on community sentiment—yet in PMLA, statutory rigour adds an overlay.
• Distinguishing defence authorities:
  • Manish Sisodia v. ED (2024) and Union Of India v. K.A. Najeeb (2021) were distinguished: lengthier incarcerations, different factual matrices, and lesser magnitude/complexity in those cases. A mere year in custody did not justify bail in a case of alleged ₹26,000+ crores laundering.
  • V. Senthil Balaji v. ED (2024): The High Court refused to treat pending or protracted predicate-offence proceedings as an automatic ground for PMLA bail; unlike Senthil Balaji, the present case involved fewer accused and witnesses and specific risks of obstruction.
• Anwar Dhebar v. State of Chhattisgarh (affirmed by the Supreme Court, 14.07.2025): Emphasised that in grave economic irregularities, gravity and conspiracy depth augment bail thresholds beyond the standard triple test—used here to underscore that the present case was even more egregious in magnitude.

Legal Reasoning

1. Statutory Thresholds: Twin Conditions + Triple Test
   The Court applied the PMLA framework faithfully:
   • Section 45(1) Twin Conditions: The Court must be satisfied (i) there are reasonable grounds to believe the accused is not guilty, and (ii) that he is not likely to commit any offence while on bail. On the voluminous material (audits by Deloitte/EY, Section 50 statements, asset inflation, shell companies exceeding 500, alleged undervalued alienations), the Court could not reach a finding in favour of the accused even on broad probabilities.
   • Section 45(2) and the Triple Test (read with BNSS/CrPC jurisprudence): The Court found specific indicators of tampering/obstruction, including instructions to a dummy director and undervalued transfers post-search, which militated against bail.
2. “Sick and Infirm” Proviso Is Not Automatic
   The defence invoked the first proviso to Section 45 as a “sick and infirm” person. The Court held that medical infirmity does not automatically neutralise the twin conditions. Based on AIIMS Medical Board (06.03.2025) indicating non-obstructive CAD and recommending only day-care coronary angiography—with custodial management feasible—the Court refused to treat health as a decisive factor. This is a clear, reasoned limit on a commonly invoked proviso.
3. Gravity as a Decisive Weight
   The Court adopted the Supreme Court’s gravity-centric approach for economic offences. It expressly recognised the systemic consequences of large-scale siphoning of public funds: erosion of public confidence, harm to depositors/creditors, and threats to the financial system. That “societal interest” lens eclipsed general Article 21 arguments absent extraordinary circumstances.
4. Speedy Trial and Delay Arguments
   The defence invoked delay in cognizance of predicate offences and relied on Manish Sisodia and K.A. Najeeb. The Court, however, stressed that:
   • One year’s custody is not a universal or automatic ground for bail, especially in mega frauds.
   • Complexity-driven timelines and nascent stages in PMLA proceedings cannot, by themselves, compel release.
   • The Court implicitly rejected the contention that PMLA proceedings cannot progress or that bail is warranted merely because predicate-offence trials are pending or at an early stage.
5. Section 24 Presumption at the Bail Stage
   The Court placed weight on Section 24 PMLA, which presumes property to be proceeds of crime unless rebutted. While admissibility of Section 50 statements and other materials can be tested at trial, they are not discarded at bail. The petitioner did not rebut the presumption to the degree necessary for a bail order.

Impact and Forward-Looking Implications

• Recalibrating the “Sick and Infirm” Proviso
  The judgment significantly narrows opportunistic reliance on the “sick and infirm” proviso. Going forward, applicants must show that custodial facilities cannot deliver adequate care—not merely that ailments exist. Medical board opinions indicating non-critical, manageable conditions can be decisive against bail.
• Delay Without More Will Not Suffice in Mega-Fraud Cases
  The Court signals that Article 21 arguments premised solely on time in custody—without demonstrable prosecutorial inertia or extraordinary delay—will not override PMLA’s stringent bail regime where the alleged economic offence is mammoth in scale and complexity.
• Predicate Offences Pending: No Automatic Windfall
  The defence’s contention, relying on Senthil Balaji, that PMLA proceedings should be tied to the conclusion of predicate offences did not find traction as a bail lever. Future applicants cannot assume that early-stage predicate cases automatically loosen PMLA bail standards.
• Concrete Tampering Allegations Matter
  The Court moved beyond speculative fears; allegations of undervalued asset sales post-search and witness-influence attempts were treated as serious, tipping the triple test against the applicant. This may encourage the ED to marshal specific, time-stamped obstruction events to oppose bail effectively.
• IBC Context and Public Interest
  The Court’s emphasis on extraordinary haircuts in insolvency resolution plans (e.g., a proposed payment of ₹35 crores against massive dues) underscores that insolvency outcomes are not a shield in criminal law. Criminal accountability and public exchequer protection will remain paramount.
• Use of Audit Trails and Section 50 Statements at Bail
  The judgment affirms that forensic audits, fixed-asset reviews, and Section 50 statements can be considered in assessing “broad probabilities” at the bail stage, even though full evidentiary adjudication is reserved for trial.

Complex Concepts Simplified

• PMLA “Twin Conditions” (Section 45): For bail in PMLA offences, the court must be satisfied that (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. These are additional, stringent thresholds beyond ordinary bail tests.
• Triple Test (Bail Fundamentals): Courts typically consider whether the accused is a flight risk, likely to tamper with evidence/influence witnesses, or likely to commit further offences. Under PMLA, these apply in addition to the twin conditions.
• First Proviso to Section 45 (“Sick and Infirm”): Certain categories (e.g., “sick and infirm”) may seek relaxation from the twin conditions. But this is not automatic; courts examine whether custodial treatment is inadequate and whether the plea is genuine and compelling.
• Section 24 Presumption: In PMLA, property/evidence is presumed to be “proceeds of crime” unless the accused rebuts it. This shifts the burden, making bail more difficult when there is a prima facie link.
• Predicate Offences: PMLA prosecutions rest on a “scheduled” underlying offence (e.g., cheating, criminal breach of trust, PC Act offences). Proceedings in the predicate case and PMLA are distinct but interlinked.
• ECIR and Provisional Attachment: An ECIR is the ED’s internal record akin to an FIR for money laundering. Under Section 5 PMLA, the ED can provisionally attach properties believed to be proceeds of crime, subject to adjudication.
• Section 50 Statements: Statements recorded by the ED under Section 50 PMLA are akin to those before a civil court; their evidentiary worth is assessed at trial, but they can inform the court’s prima facie view at bail.
• Cognizance: The court’s formal application of mind to the chargesheet/prosecution complaint, taking note that an offence appears to have been committed and that the accused should be tried.
• Layering/Benami/Shell Companies: Common money-laundering techniques—routing funds through multiple entities (often with nominal or “dummy” directors) to obfuscate origin and ownership, sometimes using benami (name-lender) structures to conceal the true beneficiary.

Conclusion

Arvind Dham v. Directorate of Enforcement crystallises a critical bail principle under PMLA: in allegations of mega economic offences, the gravity of the offence, concrete risks of obstruction, and the statutory presumption under Section 24 will often outweigh generalized Article 21 pleas of delay and non-critical medical conditions. The Court’s refusal to treat “sick and infirm” as an automatic escape from Section 45’s twin conditions deepens the rigor of PMLA bail jurisprudence.

Practically, the decision signals that:

• Medical infirmity must be shown to be unmanageable in custody to move the bail needle.
• Delay arguments require exceptional facts; a mere year in custody in a complex, document-heavy case won’t suffice.
• Specific, proven acts of obstruction (e.g., undervalued alienations post-search, attempts to influence witnesses) are accorded serious weight against bail.
• Predicate-offence pendency does not, by itself, dilute PMLA bail thresholds.

In the broader legal context, the judgment reinforces a gravity-centric, evidence-attentive bail standard for money-laundering prosecutions, aligning with Supreme Court dicta on economic offences as a class apart. It will likely serve as a persuasive reference point for future PMLA bail applications where “sick and infirm” claims and speedy trial arguments are invoked against the backdrop of alleged systemic frauds impacting the financial architecture and public exchequer.