Kalvakuntla Kavitha vs Directorate Of Enforcement

2024 INSC 632 REPORTABLE IN THE SUPREME COURT OF INDIA CRIMINAL APPELLATE JURISDICTION

CRIMINAL APPEAL NO. OF 2024 [Arising out of SLP(Criminal) No. 10778 of 2024]

KALVAKUNTLA KAVITHA …APPELLANT(S)

VERSUS

DIRECTORATE OF ENFORCEMENT …RESPONDENT(S)

WITH

CRIMINAL APPEAL NO. OF 2024 [Arising out of SLP(Criminal) No. 10785 of 2024]

JUDGMENT

B.R. GAVAI, J.

1. Leave granted.

2. These appeals challenge the judgment and order dated

01.07.2024 passed by the learned Single Judge of the High

Court of Delhi at New Delhi in Bail Application Nos.1675 and

1739 of 2024, vide which the learned Single Judge has

refused to grant bail to the appellant herein.

3. Though the matter has been argued at length by Shri Signature Not Verified Digitally signed by Narendra Prasad Date: 2024.08.28 Mukul Rohatgi, learned Senior Counsel along with Shri D.S. 11:27:02 IST Reason:

Naidu and Shri Vikram Chaudhri, learned Senior Counsel

1 appearing on behalf of the appellant, and Shri S.V. Raju,

learned Additional Solicitor General of India (for short, ‘ASG’)

for the respondent(s), at length; learned ASG has suggested

that this Court should avoid elaborate discussions on the

merits, inasmuch as any observations may prejudice the

rights of either of the parties at the trial.

4. We appreciate the fairness of the learned ASG in

suggesting the Court not to record the detailed elaborations

on the merits of the case. It has been a consistent view of

this Court that the Courts should avoid elaborate discussion

at the stage of considering application for bail. We would

therefore avoid any discussion on the merits of the present

case inasmuch as the same may prejudice the rights of either

of the parties at the trial.

5. Shri Rohatgi, learned Senior Counsel submits that there

is no material on record so as to implicate the appellant

herein with the offences charged with. In any case, he

submits that insofar as the appeal arising out of SLP(Crl.)

No.10778 of 2024 is concerned, the complaint has been filed

by the prosecution and insofar as the appeal arising out of

SLP(Crl.) No.10785 of 2024 is concerned, the charge-sheet

2 has already been filed. It is submitted that since the

investigation is complete, further custody of the appellant

would not be required.

6. Shri Rohatgi, relying on the judgment of this Court in

the case of Manish Sisodia v. Directorate of

Enforcement1, submits that inasmuch as both the said case

and the present case arise out of the same set of facts and so

in the present case also there are about 493 witnesses to be

examined and the documents to be considered are in the

range of about 50,000 pages. He further submits that no

proceeds of crime have been recovered from the appellant.

Shri Rohatgi further submits that the appellant is a woman

and is therefore entitled to special treatment under proviso to

Section 45(1) of the Prevention of Money-Laundering Act,

2002 (for short, ‘PMLA’).

7. Shri S.V. Raju, learned ASG vehemently opposed these

appeals. He submits that the statements of various witnesses

as well as co-accused would clearly show that the present

appellant was a kingpin in arranging the deal between the

co-accused-Arvind Kejriwal and the south lobby. He submits

1 2024 SCC OnLine SC 1920 : 2024 INSC 595 3 that the statements of the witnesses clearly show that the

proceeds of the crime have passed through, or at least at her

instance. Learned ASG further submits that not only the

statements recorded under Section 50 of the PMLA but also

the statements recorded under Section 164 of the Code of

Criminal Procedure, 1973 before the learned Magistrate

would clearly implicate the present appellant in the trial.

8. Learned ASG further submits that the learned Trial

Judge has rightly refused to grant the benefit of the proviso

to Section 45(1) of the PMLA on the ground that the

appellant is a woman, inasmuch as she has indulged herself

into tampering with the evidence and influencing the

witnesses. He submits that the appellant has formatted her

mobile set in order to destroy the evidence which was against

her.

9. Learned ASG further submits that the sequence as to in

what manner the accused Arun Pillai has retracted his

statement would clearly show that it is the present appellant,

who has a role to play. He submits that though the statement

of Arun Pillai under Section 50 of the PMLA was recorded on

10.11.2022 after a period of more than three months, he has

4 retracted the statement on 09.03.2023. He further submits

that it is relevant to note that the first summons were issued

to the present appellant on 07.03.2023 i.e., two days prior to

the day Arun Pillai retracted his statement. He therefore

submits that the Court will have to draw an inference that

the appellant is indulging in influencing the witnesses.

10. On perusal of the record, we find that in CBI case

charge-sheet has been filed and in ED case complaint has

been filed. As such, the custody of the appellant herein is

not necessary for the purpose of investigation.

11. The appellant has been behind the bars for the last five

months. As observed by us in the case of Manish Sisodia

(supra), taking into consideration that there are about 493

witnesses to be examined and the documents to be

considered are in the range of about 50,000 pages, the

likelihood of the trial being concluded in near future is

impossible.

12. Relying on the various pronouncements of this Court,

we had observed in the case of Manish Sisodia (supra) that

the prolonged incarceration before being pronounced guilty of

an offence should not be permitted to become punishment

5 without trial.

13. We had also reiterated the well-established principle

that “bail is the rule and refusal is an exception”. We had

further observed that the fundamental right of liberty

provided under Article 21 of the Constitution is superior to

the statutory restrictions.

14. We are further of the view that the proviso to Section

45(1) of the PMLA would entitle a woman for special

treatment while her prayer for bail is being considered.

15. The said proviso to Section 45(1) of the PMLA reads

thus:-

“Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co- accused of money-laundering a sum of less than one crore rupees, may be released on bail, if the special court so directs:”

16. A perusal of the above proviso would thus reveal that

the proviso permits certain category of accused including

woman to be released on bail, without the twin requirement

under Section 45 of the PMLA to be satisfied. No doubt that,

as argued by the learned ASG, in a given case the accused

even if a woman may not be automatically entitled to benefit

of the said proviso and it would all depend upon the facts 6 and circumstances of each case.

17. However, when a statute specifically provides a special

treatment for a certain category of accused, while denying

such a benefit, the Court will be required to give specific

reasons as to why such a benefit is to be denied.

18. The order of the learned Single Judge, which denies the

special treatment to the present appellant makes for an

interesting reading. The learned Judge observed thus:-

“65. As mentioned in the contents of the application itself, the applicant Smt. K. Kavitha, is a member of the Telangana Legislative Council from the Nizamabad Local Bodies Constituency and has held significant political positions, including Member of Parliament (MP) for Nizamabad formerly. During her tenure in the Lok Sabha, she served on several committees. She had initiated a 'Free Meal Initiative' in her constituency, providing meals at state hospitals and during the pandemic. She is also the founder of the Telangana Jagruti Skill Centre, offering vocational training to youth, and as per her pleadings has been involved in educating poor children in the Nalgonda district since 2006. It is claimed in the pleadings that she is a prominent figure in the Telangana statehood movement. She holds a Bachelor's degree in Engineering and a Master's degree in Sciences. She has also served as the National Commissioner of Bharat Scouts and Guides since 2005 amongst many other achievements mentioned in the pleadings.

66. It is heartening to note that the applicant Smt. K. Kavitha, is a highly qualified and well-

accomplished person, having made significant contributions to politics and social work as enlisted by her in her pleadings. The same were not disputed 7 by the investigating agencies. Her educational qualification and the activities, she has enlisted for the betterment of society in the State of Telangana are essentially, one side of herself and is impressive. However, while deciding the present bail applications, though this Court may appreciate these accomplishments, it cannot lose sight of serious allegations levelled by the prosecution and the evidences collected during the course of investigation and presented before this Court, which prima facie reveal her role in the offence in question.

67. Furthermore, as far as benefit of proviso to Section 45 is concerned, when it is the case of applicant herself that she is a well educated and accomplished woman, who has remained Member of Parliament, Member of Legislative Council, etc., this Court is bound to keep in mind the observations of the Hon'ble Apex Court in case of Saumya Chaurasia (supra). The material collected by the Directorate of Enforcement, which has been discussed in the preceding paragraphs has pointed out that the applicant herein was one of the chief conspirators in the entire conspiracy relating to formulation and implementation of new Excise Policy of Delhi. In fact, some other accused persons were working on behalf of the applicant and as per her instructions, as noted in the preceding discussion.

68. Thus, Smt. K. Kavitha cannot be equated to a vulnerable woman who may have been misused to commit an offence, which is the class of women for whom the proviso to Section 45 of PMLA has been incorporated, as held by the Hon'ble Apex Court in case of Saumya Chaurasia (supra). Accordingly, this Court is of the considered opinion that Smt. K. Kavitha is not entitled to the benefit of proviso to Section 45 of PMLA.” [emphasis supplied]

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19. Day in and day out it is argued before us on behalf of

the prosecution that merely because an accused has a

special status in terms of he/she being a Member of

Parliament or a Member of Legislative Assembly or a Minister

or a Chief Minister, etc., they should not be given a special

treatment and should be treated equally as any other

accused.

20. However, the learned Single Judge in the present case,

while denying the benefit of the proviso to Section 45(1) of the

PMLA, comes to a “heartening conclusion” that the appellant

is highly qualified and a well-accomplished person. The

learned Single Judge further observed that the appellant has

made significant contributions to politics and social work.

The learned Single Judge further observed that while

deciding her bail application, the Court may appreciate her

accomplishment, however, it cannot lose sight of the serious

allegations levelled by the prosecution and the evidence

collected during the course of the investigation and presented

before the Court.

21. The learned Single Judge thereafter proceeds to observe

that the present appellant cannot be equated to a “vulnerable

9 woman”.

22. We find that the learned Single Judge erroneously

observed that the proviso to Section 45(1) of the PMLA is

applicable only to a “vulnerable woman”.

23. We further find that the learned Single Judge totally

misapplied the ratio laid down by this Court in the case of

Saumya Chaurasia v. Directorate of Enforcement2.

24. A perusal of the judgment of this Court in the case of

Saumya Chaurasia (supra) would show that this Court has

observed that the Courts need to be more sensitive and

sympathetic towards the category of persons included in the

first proviso to Section 45 of the PMLA and similar provisions

in the other Acts. The Court observes that the persons of

tender age and women who are likely to be more vulnerable

may sometimes be misused by unscrupulous elements and

made scapegoats for committing such crime.

25. No doubt that this Court observes that nowadays the

educated and well-placed women in the society engage

themselves in commercial ventures and enterprises and

advertently or inadvertently engage themselves in the illegal

2 (2024) 6 SCC 401 : 2023 INSC 1073 10 activities. The Court therefore puts a caution that the Courts,

while deciding such matters, should exercise the discretion

judiciously using their prudence.

26. This Court in the case of Saumya Chaurasia (supra),

while paraphrasing proviso to Section 45(1) of the PMLA

stated in paragraph 23 as follows:

“23. ….. No doubt the courts need to be more sensitive and sympathetic towards the category of persons included in the first proviso to Section 45 and similar provisions in the other Acts, as the persons of tender age and women who are likely to be more vulnerable, may sometimes be misused by the unscrupulous elements …….”

27. This Court, in the carefully couched paragraph

extracted above used the phrase “persons of tender age and

woman who are likely to be more vulnerable, may sometimes

be misused by the unscrupulous elements”. This is vastly

different from saying that the proviso to Section 45(1) of the

PMLA applies only to “vulnerable woman”. Further, this

Court in the case of Saumya Chaurasia (supra) does not

say that merely because a woman is highly educated or

sophisticated or a Member of Parliament or a Member of

Legislative Assembly, she is not entitled to the benefit of the

proviso to Section 45(1) of the PMLA.

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28. We, therefore, find that the learned Single Judge of the

High Court has totally misdirected herself while denying the

benefit of the proviso to Section 45(1) of the PMLA.

29. In the result, we allow these appeals, in the following

terms:-

(i) The impugned judgment and order dated 01.07.2024

passed by the learned Single Judge of the High Court

of Delhi at New Delhi in Bail Application Nos.1675

and 1739 of 2024 are quashed and set aside;

(ii) The appellant is directed to be released forthwith on

bail in connection with Complaint Case No.31 of

2022 arising out of ECIR/HIUII/14/2022 dated

22.08.2022, P.S. HIU, Directorate of Enforcement

and RC-0032022A0053 dated 17.08.2022, P.S. CBI,

ACB, on furnishing bail bonds in the sum of

Rs.10,00,000/- in each of the cases;

(iii) The appellant shall not make any attempt to tamper

with the evidence or influence the witnesses;

(iv) The appellant shall deposit her passport with the

learned Trial Judge; and

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(v) The appellant shall regularly attend the Trial Court

and cooperate with the expeditious disposal of the

trial.

30. Though we have not observed anything on the merits of

the matter, any observation in this judgment would not

prejudice the trial.

31. Pending application(s), if any, shall stand disposed of.

..............................J. (B.R. GAVAI)

..............................J. (K.V. VISWANATHAN) NEW DELHI;

AUGUST 27, 2024.

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