The Calcutta High Court has granted bail to businessman in a money laundering case arising from alleged diversion of bank loans obtained by Amrit Feeds Limited and held that his continued detention, with the investigation concerning him complete and no early prospect of trial, engaged his right to personal liberty and a speedy trial under Article 21 of the Constitution.
The bench of Justice Suvra Ghosh directed Bagla’s release on a bond of ₹10 lakh with adequate sureties, half of whom must be local, subject to conditions including surrender of his passport and attendance at every trial court hearing.
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The Serious Fraud Investigation Office filed a company case against Bagla and others in March 2024. It included an allegation under Section 447 of the Companies Act, 2013, which the Enforcement Directorate treated as the scheduled offence for its money laundering investigation. The ED registered its Enforcement Case Information Report in November 2024 and arrested Bagla on August 26, 2025, following a search at his residence.
According to the ED, Bagla, the managing director of Amrit Feeds Limited, controlled a scheme to divert loans obtained from banks to companies associated with him, his relatives and employees. The agency alleged that funds intended for the company’s operations were channelled into these entities and used in part to acquire immovable property. These remain prosecution allegations; the High Court did not decide whether they are proved.
The ED filed a prosecution complaint against Bagla and 25 others in October 2025. Bagla sought bail after spending more than a year in custody.
Bagla argued that the ED had failed to comply with Section 19 of the Prevention of Money Laundering Act (PMLA). His counsel contended that the arresting officer did not possess material establishing grounds to believe he was guilty before making the arrest. Counsel also argued that statements subsequently recorded from Bagla, and material collected after his arrest, could not justify the earlier decision to arrest him.
The High Court explained that Section 19 requires the authorised officer to have material in possession, record reasons to believe on the basis of that material that the person is guilty of a PMLA offence, and inform the arrested person of the grounds of arrest as soon as may be. The power of arrest, it said, cannot be used merely as a means of investigation.
The Court nevertheless rejected Bagla’s challenge to compliance with Section 19. It noted that the arrest documents and grounds of arrest had been given to him. It also found that the material gathered during the search could have supplemented material collected earlier in the ED’s investigation. The Court said judicial review of the arrest did not extend to reassessing the sufficiency or adequacy of material underlying the officer’s recorded belief. It therefore concluded that Section 19 had been complied with.
Having upheld compliance with the arrest safeguards, the Court considered the length and purpose of Bagla’s continued custody. It noted that the ED had last questioned him in September 2025 and that its investigation concerning him was complete. The case rested on extensive documentary material in the agency’s custody, making further custodial interrogation unnecessary.
The Court also examined the progress of both proceedings. The scheduled offence case remained at the document-supply stage, while proceedings on the ED’s prosecution complaint were subject to an interim stay granted in a separate challenge. With a large volume of documents to be considered, the Court found that the trial was unlikely to begin soon or conclude quickly.
The judgment acknowledged the seriousness of economic offences and the mandatory bail conditions under Section 45 of the PMLA. It held, however, that prolonged custody before a finding of guilt could not become punitive detention. Where the right to a speedy trial and personal liberty under Article 21 is infringed, the Court said, restrictive bail provisions do not prevent a constitutional court from granting relief.
The Court also observed that statements recorded from Bagla under Section 50 of the PMLA while he was in custody could not be treated as substantive evidence against him, though they could corroborate other investigative material.
Along with the ₹10 lakh bond and sureties, Bagla must surrender his passport, remain within the territorial jurisdiction of the trial court unless permitted to leave, provide his residential address and mobile number, and attend every hearing. He must not tamper with evidence, intimidate or contact witnesses, or engage in criminal activity. The trial court may cancel bail if he breaches the conditions.
The High Court expressly limited its observations to the bail application. The allegations of loan diversion and money laundering remain to be decided by the trial court independently.
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