The Delhi High Court has granted bail to Masasasong Ao in a money laundering case, holding that the seriousness of allegations in the separate UAPA proceedings cannot, by itself, justify keeping an accused in custody for an indefinite period in the PMLA case. Justice Sanjeev Narula emphasised that constitutional protection of personal liberty under Article 21 continues to apply even in cases involving serious allegations.
Ao had been in custody in the PMLA proceedings since October 18, 2022. The Court noted that the maximum punishment under Section 4 of the PMLA in the present case was seven years and that he had already crossed one-half of that period while the trial was still far from conclusion.
Background
The proceedings arose from an NIA case concerning allegations of extortion and illegal taxation allegedly linked to NSCN(IM). The Enforcement Directorate subsequently registered an ECIR under Sections 3 and 4 of the PMLA because some of the alleged predicate offences were scheduled offences under the money laundering law.
The ED relied on several bank transactions and statements to allege that Ao was actively involved in handling and moving funds. Its case included transactions involving withdrawals, deposits and transfers made through accounts allegedly connected with co-accused Alemla Jamir. Ao, however, maintained that several accounts standing in his or his wife's name were substantially operated by Jamir.
The High Court observed that merely routing allegedly tainted money through an account in an accused's name does not by itself establish an offence under Section 3 of the PMLA. The prosecution would ultimately have to establish the accused's direct or indirect involvement in an activity connected with the proceeds of crime.
"Whether these circumstances establish that he knew the criminal source of the funds and consciously participated in their laundering is not self-evident merely from the movement of money; that inference will have to be tested with the evidence at trial."
The Court also found that although the ED had material supporting its case at a prima facie level, Ao's explanation could not be rejected as a mere denial at the bail stage. The Court held that deciding between the competing explanations would require an assessment of evidence at trial.
The Court noted that the prosecution had cited 27 witnesses, but only five had been examined as of July 2026. It found nothing on record suggesting that the trial was nearing completion and also found no comparable delay attributable to Ao.
"To continue the Applicant's detention until an uncertain end of trial would allow pre-trial custody to assume a punitive character. Section 45 does not require that result, and Article 21 does not permit it."
Justice Narula further held that the stringent bail conditions under Section 45 of the PMLA cannot result in indefinite pre-trial detention where the accused has remained in custody for a substantial period and the trial is unlikely to conclude within a reasonable time.
Allowing the bail application, the High Court directed that Masasasong Ao be released on bail in the PMLA case on furnishing a personal bond of ₹50,000 with one surety of the same amount. The Court imposed conditions including cooperation with further investigation, surrender of passport, restrictions on leaving India, appearance before the trial court and a prohibition on contacting witnesses or tampering with evidence.
The Court clarified that the order concerned only Ao's custody in the PMLA proceedings and would not affect any custody required in the predicate proceedings or any other case.
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