PMLA Bail: Settlement or Quashing of Some Predicate FIRs Does Not Entitle Accused to Bail Where Other Scheduled Offences Remain Pending; Punjab and Haryana High Court Denies Bail to Real Estate Developer in ₹662.49 Crore Money Laundering Case, Reiterates Mandatory Section 45 Twin Conditions

Case Name: Jarnail Singh Bajwa v. Directorate of Enforcement

Date of Judgment: 25 September 2026

Citation: CRM-M-21927-2026

Bench: Hon’ble Mrs. Justice Manisha Batra

Held: The Punjab and Haryana High Court held that quashing, compounding or settlement of some predicate FIRs does not, by itself, entitle an accused to regular bail under the Prevention of Money Laundering Act, 2002, where other FIRs involving scheduled offences continue to remain pending and the material collected during investigation prima facie discloses involvement in activities connected with proceeds of crime. The subsequent resolution of certain underlying criminal proceedings cannot automatically neutralise the allegations of money laundering arising from the remaining predicate offences.

The Court further held that the twin conditions prescribed under Section 45(1) of the PMLA are mandatory and must be satisfied before an accused can be released on bail. Where the prosecution opposes the application, the Court must be satisfied that reasonable grounds exist for believing that the accused is not guilty of the offence alleged and that he is not likely to commit any offence while on bail. These statutory requirements govern consideration of bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, notwithstanding the ordinary principles applicable to bail.

Relying upon Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929, the High Court reiterated the distinct and aggravated character of money laundering under the PMLA. Where the allegations concern the collection of substantial amounts from homebuyers, followed by their alleged diversion towards unrelated investments, connected entities, unsecured loans and personal acquisitions, the transactions cannot be treated as purely contractual disputes for the purpose of deciding bail without examining the prima facie material indicating proceeds of crime.

The Court also held that the duration of incarceration and the likelihood of a prolonged trial are relevant considerations but cannot, by themselves, justify bail where the statutory requirements under Section 45 remain unsatisfied. The gravity of the allegations, magnitude of the alleged economic offence, antecedents of the accused, possibility of influencing witnesses or tampering with evidence and the larger public interest must also be considered.

The High Court further referred to the reverse burden contemplated under Section 24 of the PMLA and observed that the petitioner had not placed sufficient material on record, at the bail stage, to rebut the statutory presumption concerning proceeds of crime. Finding no reasonable grounds for believing that the petitioner was not guilty of the alleged money laundering offence, and noting the possibility of interference with evidence or witnesses, the Court declined to grant regular bail.

Summary: The Punjab and Haryana High Court, in a judgment delivered by Justice Manisha Batra, examined the entitlement of a real estate developer to regular bail under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, in a prosecution initiated by the Directorate of Enforcement under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002. The principal controversy concerned the applicability of the mandatory twin conditions under Section 45 of the PMLA, particularly where several predicate FIRs had reportedly been settled, quashed or compounded, while other scheduled offences remained pending.

The petitioner, Jarnail Singh Bajwa, Chairman and Managing Director of M/s Bajwa Developers Limited (BDL), sought regular bail in Complaint No. COMA-32/2025 arising out of ECIR No. CDZO-I/06/2022 dated 31.03.2022, registered by the Directorate of Enforcement, Chandigarh Zonal Office.

According to the prosecution, BDL was engaged in developing residential and commercial real estate projects in and around SAS Nagar, Mohali, including projects under the name Sunny Enclave in Sectors 123–125, Kharar. Beginning in 2017, several homebuyers and allottees instituted criminal complaints alleging that they had paid substantial sums for plots, flats and commercial units but had not received possession or execution of sale deeds in accordance with the assurances made to them.

The allegations included non-delivery of possession, delays in executing sale deeds, unilateral changes in allotted plot numbers and instances where the same property was allegedly sold to more than one purchaser. The earliest predicate FIR was FIR No. 87 dated 25.04.2017, registered under Sections 406 and 420 IPC. Several other FIRs followed over the subsequent years.

The Enforcement Directorate’s case was that the recurring allegations disclosed a pattern of collecting advances from purchasers through allegedly misleading representations concerning title, allotment and delivery of possession. The judgment records that the investigation had gathered 45 predicate FIRs, the details of which were included in the prosecution complaint. The ECIR was registered to investigate the generation, use, diversion and layering of the alleged proceeds of crime.

During investigation, statements of several persons connected with BDL were recorded under Section 50 of the PMLA. On 21–22.05.2025, the Enforcement Directorate conducted searches under Section 17 of the Act at the residential and business premises of the petitioner, BDL and associated entities.

The searches resulted in the identification and freezing of bank accounts belonging to the petitioner, his family members and related entities, reflecting a cumulative frozen balance of approximately ₹3.31 crore. Cash amounting to approximately ₹42 lakh was also found, while several luxury vehicles registered in the name of BDL, including a Range Rover, BMW, Land Cruiser, Isuzu D-Max, Porsche and Ford Endeavour, were identified with a cumulative valuation of approximately ₹1.07 crore.

The investigating agency also claimed to have recovered sale deeds, registration documents and other material concerning the alleged diversion and layering of funds.

On the basis of the statements recorded during investigation, including those of Gurjeet Singh Dhiman, an employee involved in BDL’s day-to-day operations, and Sukhdev Singh Bajwa, read with the company’s financial statements, the Enforcement Directorate quantified the alleged proceeds of crime at approximately ₹662.49 crore.

The prosecution alleged that substantial advances collected from homebuyers had been diverted towards acquisition of land parcels, advancement of unsecured loans to associated entities, repayment of liabilities of related or family concerns, statutory payments and personal acquisitions rather than being utilised for the development of the projects for which the amounts had been collected.

The record also referred to an alternative figure of approximately ₹55.498 crore furnished by Gurjeet Singh Dhiman as of 31.03.2024. However, according to the Enforcement Directorate, this reconstruction was incomplete and unreliable because the underlying ledgers lacked essential identifying particulars of individual purchasers and properties.

The proceedings further involved attachment measures under the PMLA. A provisional attachment order dated 27.12.2023, arising from a connected ECIR concerning M/s Gupta Builders and Promoters Private Limited, had attached cash amounting to ₹54.16 lakh found at the petitioner’s premises. A subsequent provisional attachment order dated 23.12.2025 attached immovable properties valued at approximately ₹7.47 crore.

The Enforcement Directorate filed Prosecution Complaint No. COM-A-32/2025 before the Special Court on 24.12.2025.

The petitioner had already been in judicial custody in connection with another case registered by the Punjab Police. On 28.10.2025, the Enforcement Directorate obtained an order for his production before the Special Court for recording his statement. He was arrested later that evening under Section 19 of the PMLA.

The petitioner’s application for regular bail was dismissed by the Special Judge (PMLA), SAS Nagar, on 01.04.2026. Aggrieved, he approached the High Court seeking regular bail.

On behalf of the petitioner, it was argued that the dispute was essentially commercial and arose from contractual obligations relating to development of real estate projects, delivery of possession and execution of sale deeds. Such disputes, it was submitted, were ordinarily amenable to civil remedies or proceedings before the Real Estate Regulatory Authority.

The petitioner contended that invoking the PMLA in relation to consumer grievances arising from real estate transactions amounted to unwarranted criminalisation of contractual disputes.

A significant aspect of the defence concerned the status of the predicate FIRs. The petitioner submitted that out of 41 FIRs relied upon against him, 12 had been quashed by the High Court on the basis of compromises, offences in 10 FIRs had been compounded with consequential discharge, and bail had been granted in 15 other FIRs following settlements with complainants.

It was contended that only four FIRs effectively remained pending and that settlement proceedings in those matters were also at an advanced stage. The petitioner argued that in view of the resolution of most predicate proceedings, the prosecution under the PMLA could no longer justify his continued detention.

Reliance was placed upon Vijay Madanlal Choudhary v. Union of India, 2022 SCC OnLine SC 929, in support of the relationship between scheduled offences and prosecution for money laundering.

The petitioner also challenged the circumstances of his arrest under Section 19 of the PMLA. It was argued that he was already in judicial custody when the Enforcement Directorate sought his production for recording a statement under Section 50 and that the subsequent arrest was effected without fresh material or sufficient reasons to believe that he was guilty of money laundering.

According to the petitioner, the Enforcement Directorate had failed to consider material favourable to him and had improperly exercised its power of arrest despite his previous cooperation with the investigation.

The petitioner further submitted that he was not a flight risk, had a permanent residence and was willing to comply with bail conditions, including surrender of travel documents. He also relied upon the anticipated duration of the trial, pointing out that the prosecution complaint and accompanying documents exceeded 11,000 pages and that approximately 80 prosecution witnesses had been cited.

It was argued that even cognizance had not been taken and that the trial was unlikely to conclude within a reasonable time. The petitioner invoked Article 21 of the Constitution and submitted that the mandatory bail conditions under Section 45 PMLA could not be interpreted to permit indefinite incarceration.

The Directorate of Enforcement opposed the application, submitting that Section 45(1) of the PMLA imposed mandatory restrictions on the grant of bail that overrode the ordinary principles applicable under Section 483 BNSS.

The Enforcement Directorate alleged that the petitioner, being the controlling mind of BDL, had collected approximately ₹662.49 crore from homebuyers through false assurances and had subsequently diverted substantial funds towards associated entities, unsecured loans, land acquisitions and personal expenditure.

It further relied upon the allegedly incomplete financial records, frozen bank accounts, identified vehicles and statements recorded during investigation as circumstances indicating the petitioner’s involvement in activities connected with proceeds of crime.

The Enforcement Directorate contended that the petitioner’s financial position and influence created a risk of tampering with evidence or influencing witnesses. Reliance was placed upon the principles governing bail in economic offences, including P. Chidambaram v. Directorate of Enforcement, (2020) 13 SCC 791, and Y.S. Jagan Mohan Reddy v. Central Bureau of Investigation, 2013 (3) RCR (Criminal) 108 (SC).

The High Court identified the central issue as whether the petitioner had established entitlement to regular bail having regard to the rigours of Section 45 of the PMLA read with Article 21 of the Constitution.

Examining the statutory framework, the Court referred to Section 3 of the PMLA, which defines money laundering by reference to processes or activities connected with proceeds of crime, including concealment, possession, acquisition, use or projection of such proceeds as untainted property.

The Court also considered Section 2(1)(u), defining proceeds of crime, Section 19 concerning arrest, Section 24 relating to the statutory presumption, Section 44 governing jurisdiction of the Special Court and Section 50 empowering designated authorities to summon persons and record statements.

The Court emphasised that Section 45(1) of the PMLA imposes mandatory twin conditions for the grant of bail where the prosecution opposes release. Referring to the legislative amendment introduced through the Finance Act, 2018, and the Supreme Court’s decision in Vijay Madanlal Choudhary, the Court noted that the amended bail restrictions had been upheld and applied to offences under the PMLA.

The High Court rejected the contention that settlement or quashing of several predicate FIRs automatically justified release. It observed that multiple FIRs involving scheduled offences continued to remain pending and that the prosecution material disclosed specific allegations concerning the petitioner’s role in collecting and allegedly diverting substantial amounts from homebuyers.

The Court held that the subsequent quashing or compounding of some of the predicate FIRs could not, at the present stage, advance the petitioner’s case for regular bail where other scheduled offences continued to subsist.

The Court further examined the nature and gravity of the allegations. It noted that the prosecution alleged a recurring pattern of collecting funds for real estate projects without fulfilling the corresponding obligations, followed by diversion of those funds towards purposes unrelated to the promised development.

In considering the petitioner’s period of incarceration, the High Court observed that detention since 28.10.2025 was a relevant consideration, but not the sole determinant of entitlement to bail.

Referring to Y.S. Jagan Mohan Reddy v. Central Bureau of Investigation and Nimmagadda Prasad v. Central Bureau of Investigation, 2013 (3) RCR (Criminal) 175 (SC), the Court reiterated that economic offences involving substantial financial transactions and allegations of deep-rooted conspiracies are to be approached with particular seriousness when deciding bail.

The Court also relied upon Rohit Tandon v. Enforcement Directorate, 2018 (5) RCR (Criminal) 35 (SC), concerning the mandatory nature of Section 45 PMLA.

The High Court found that, at the present stage, there were no reasonable grounds for believing that the petitioner was not guilty of the alleged offence. It observed that the material prima facie indicated his involvement in activities connected with proceeds of crime and their alleged projection as untainted property.

The Court further noted that the petitioner was a person of substantial means and that the possibility of influencing witnesses or tampering with evidence could not be ruled out. Consequently, the Court found that the ordinary considerations relating to flight risk, evidence tampering and interference with witnesses did not favour release.

The Court also considered Section 24 of the PMLA and observed that the petitioner had not produced material sufficient to rebut the statutory presumption concerning proceeds of crime at the bail stage.

Accordingly, the High Court held that the mandatory conditions under Section 45 had not been satisfied and that the nature and magnitude of the allegations, together with the unresolved predicate offences and associated risks, did not justify granting regular bail.

Decision: The Punjab and Haryana High Court dismissed the petition filed by Jarnail Singh Bajwa under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, seeking regular bail in Complaint No. COMA-32/2025 arising out of ECIR No. CDZO-I/06/2022 dated 31.03.2022, registered by the Directorate of Enforcement under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002.

The Court held that the petitioner had failed to satisfy the mandatory twin conditions prescribed under Section 45(1) of the PMLA. At the bail stage, the material did not disclose reasonable grounds for believing that he was not guilty of the alleged money laundering offence.