KALVAKUNTLA KAVITHAversusDIRECTORATE OF ENFORCEMENT

                 [2024] 8 S.C.R. 717 : 2024 INSC 632

                          Kalvakuntla Kavitha
                                   v.
                      Directorate of Enforcement
                    (Criminal Appeal No. 3522 of 2024)
                              27 August 2024.
              [B.R. Gavai* and K.V. Viswanathan, JJ.]

                          Issue for Consideration
       Matter pertains to the grant of the benefit of the proviso to
       s.45(1) of the PMLA to the applicant being a well educated and
       accomplished woman, who has remained Member of Parliament
       and a Member of Legislative Council.

                                 Headnotes†
       Prevention of Money Laundering Act, 2002 – s.45 proviso –
       Beneficial treatment under s.45 proviso – Entitlement –
       Applicant-well educated and accomplished woman, has
       remained Member of Parliament, Member of Legislative
       Council, was one of the chief conspirators in the entire
       conspiracy relating to formulation and implementation of
       new Excise Policy of Delhi – CBI case and ED case against
       her – Bail application – Rejected by the trial court as also
       the Single Judge of the High Court – Correctness:
       Held: Proviso to s.45(1) would entitle a woman for special
       treatment while her prayer for bail is being considered – Proviso
       permits certain category of accused including woman to be
       released on bail, without the twin requirement u/s.45 to be
       satisfied – Entitlement to the benefit is not automatic, it would
       all depend upon the facts and circumstances of each case –
       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 – On facts, the Single Judge
       of the High Court totally misdirected itself while denying the
       benefit of the proviso to s.45(1) to the applicant – Single Judge
       erroneously observed that the proviso to s.45(1) is applicable
       only to a “vulnerable woman” and that the applicant could not be
       equated to a “vulnerable woman” – Courts, while deciding such


* Author
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       matters, should exercise the discretion judiciously using their
       prudence – Furthermore, it cannot be said that merely because a
       woman is highly educated or sophisticated or Member of Parliament
       or Member of Legislative Assembly, she is not entitled to the benefit
       of the proviso to s.45(1) – Also, in CBI case charge sheet has
       been filed and in ED case complaint has been filed, as such the
       custody of the appellant not necessary for investigation – Appellant
       has been behind the bars for the last five months – There are
       about 493 witnesses to be examined and voluminous documents
       to be considered, the likelihood of the trial being concluded in
       near future is impossible – Prolonged incarceration before being
       pronounced guilty of an offence should not be permitted to
       become punishment without trial – Bail is the rule and refusal is an
       exception – Fundamental right of liberty provided Art.21 is superior
       to the statutory restrictions – Thus, the impugned judgment passed
       by the Single Judge quashed and set aside – Appellant to be
       released forthwith on bail on furnishing bail bonds – Constitution
       of India – Art.21. [Paras 10-14, 16, 17-22, 24, 25, 27-29]

                                Case Law Cited
       Manish Sisodia v. Directorate of Enforcement, 2024 SCC OnLine
       SC 1920 : 2024 INSC 595; Saumya Chaurasia v. Directorate
       of Enforcement [2023] 15 SCR 848 : (2024) 6 SCC 401 :
       2023 INSC 1073 – referred to.

                                  List of Acts
       Prevention of Money Laundering Act, 2002; Code of Criminal
       Procedure, 1973; Constitution of India.

                               List of Keywords
       Benefit of the proviso to s.45(1) PMLA; Bail; Special treatment for
       women u/s.45(1) PMLA; Vulnerable woman.

                              Case Arising From
       CRIMINAL APPELLATE JURISDICTION: Criminal Appeal No. 3522
       of 2024
       From the Judgment and Order dated 01.07.2024 of the High Court
       of Delhi at New Delhi in BA No. 1675 of 2024
       With
       Criminal Appeal No. 3523 of 2024
[2024] 8 S.C.R.                                                         719

           Kalvakuntla Kavitha v. Directorate of Enforcement


                        Appearances for Parties
     Mukul Rohatgi, Vikram Chaudhri, Dama Seshadri Naidu, Sr. Advs.,
     Nitesh Rana, P. Mohith Rao, Ms. J. Akshitha, Ms. Arveen Sekhon,
     Deepak Nagar, Somanadri Goud .k, Shaik Sohil Akthar, Ms. Muskaan
     Khurana, Eugene S Philomene, Ashish Jacob Mathee, Varun Varma,
     Hitesh Kumar Sharma, Shubam Rajhans, Nikhil Kohli, Nikhil Rohatgi,
     Keshav Sehgal, Shashank Khurana, Ms. Kalyani Bhide Gharote,
     Advs. for the Appellant.
     Suryaprakash V Raju, A.S.G., Zoheb Hussain, Mukesh Kumar
     Maroria, Annam Venkatesh, Arkaj Kumar, Vivek Gurnani, Arvind
     Kumar Sharma, Samrat Goswami, Hitarth Raja, Ms. Shweta Desai,
     Ms. Abhi Priya Rai, Advs. for the Respondent.
                Judgment / Order of the Supreme Court

                                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 Mukul Rohatgi,
     learned Senior Counsel along with Shri D.S. Naidu and Shri Vikram
     Chaudhri, learned Senior Counsel 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.
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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
       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 Enforcement,1 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 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.



1    2024 SCC OnLine SC 1920 : 2024 INSC 595
[2024] 8 S.C.R.                                                        721

           Kalvakuntla Kavitha v. Directorate of Enforcement


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 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 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-
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          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 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
[2024] 8 S.C.R.                                                            723

           Kalvakuntla Kavitha v. Directorate of Enforcement


           person, having made significant contributions to politics
           and social work as enlisted by her in her pleadings. The
           same were not disputed 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 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 Enforcement.2
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



2   [2023] 15 SCR 848 : (2024) 6 SCC 401 : 2023 INSC 1073
[2024] 8 S.C.R.                                                           725

            Kalvakuntla Kavitha v. Directorate of Enforcement


     ventures and enterprises and advertently or inadvertently engage
     themselves in the illegal 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.
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;
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       (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
       (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.

       Result of the case: Appeals allowed.



       †
           Headnotes prepared by: Nidhi Jain