Gurugram: The Punjab and Haryana High Court has refused to grant bail to former managing director of Richa Industries Sandeep Gupta in a Rs 236-crore bank fraud-linked money-laundering case, drawing a sharp legal distinction between economic offences and ordinary crime.
Justice Sumeet Goel drew the distinction in his judgment of August 27, holding that fabricated accounts, shell companies and layered transactions reflect “calculated design, deliberation, sophistication”, and that the absence of physical violence cannot be taken as an excuse.
More striking is how the order treats two staple defence arguments in Prevention of Money-Laundering Act (PMLA) bail pleas—seven months already spent in custody, and evidence being purely documentary and already seized—as insufficient by themselves once material “prima facie attributes a definite and active role” to the accused, obliging courts to approach such pleas “with greater circumspection” rather than default leniency.
Justice Goel dismissed the regular bail plea of Sandeep Gupta, ruling that the material collected by the Enforcement Directorate showed his “direct and active role”, and not merely that of a company director caught up in his firm’s troubles.
Gupta is the former managing director of M/s Richa Industries Limited, a Haryana-based company that made textiles and pre-engineered buildings. The company’s bank accounts were declared fraudulent, and the Central Bureau of Investigation (CBI) registered a case against it. That case became the trigger for the Enforcement Directorate’s money-laundering probe, opened in March 2021.
The agency’s story, as recorded in the order, says funds of Richa Industries and business opportunities were allegedly siphoned off through a web of shell companies — Saariga Constructions, Subhash Gupta & Sons, Riyana Infratech and Richa Krishna Constructions. Fabricated accounts, accommodation entries, it said, were routed through Non-Banking Financial Companies, and unaccounted cash dressed up as share capital or loans to allegedly give the diverted money a clean face.
Gupta, the ED argued, was not just a name on paper. Investigators said he ran Saariga Constructions from behind the scenes without ever being listed as its director, and that the deal between Richa Industries Limited and Saariga was struck even before its formal director, Neha Singh, took charge.
It was a proof, the agency claimed, that the arrangement was scripted in advance. The ED also pointed to a period when Gupta helped oversee projects during the Richa Industries insolvency resolution process, and allegedly kept steering payments to Saariga even then.
Gupta’s lawyers, led by senior advocate P.S. Ahluwalia, pushed back hard. He has been in jail since 20 January this year, they told the court, and the evidence against him, forensic audit reports, bank records, statements, digital material, is already in the ED’s hands, so there is no risk of tampering.
The trial itself, they argued, is nowhere close to starting: the predicate CBI case alone runs into 1,245 documents across 28,000 pages and lists 187 witnesses, with notices yet to be issued to the accused. A trial that far from beginning, they said, turns continued custody into a violation of the right to a speedy trial.
The ED, represented by senior advocate Zoheb Hossain, called this an oversimplification. Money-laundering, the agency argued, is a continuing offence, and the money trail here, spanning fabricated accounts, shell firms and layered transactions timed around the insolvency of Richa Industries Limited, deserved to be taken seriously regardless of the absence of violence.
The court agreed with the ED’s framing, but went further to explain why. Justice Goel held that economic offences occupy a different footing from ordinary crime. An offence committed “in a moment of passion, impulse or sudden provocation” is not the same as one built on calculation, he observed.
The judge said economic crimes can involve a preconceived course of conduct, from manipulation of records and layering of funds to fictitious documentation and misuse of corporate structures, often executed through the “coordinated participation of several persons”.
The absence of physical violence, he made clear, “cannot by itself dilute the seriousness” of such crimes or the consequences that follow.
This distinction, the judge said, carries particular weight when the case against an accused does not rest on a “general or omnibus allegation” but on specific material—bank trails, corporate records, statements, digital evidence—that prima facie points to a definite role. In such cases, courts must approach a bail plea “with greater circumspection”.
On the seven months already spent in custody, the judge was equally clear: that alone is not enough to justify bail, given the nature of the allegations and the fact that the case has not yet progressed to trial. Key witnesses are still to be examined, the court noted, and it would be wrong to prejudge their evidence at this stage.
At the same time, Justice Goel was careful to draw a line: a court hearing a bail application is not expected to conduct the kind of “meticulous appreciation of evidence” a trial would involve. But it is, he said, “equally impermissible” to ignore material of real evidentiary weight that shows a direct link between the accused and the alleged crime.
The petition was dismissed “for the nonce”, legal shorthand meaning “for now”, and Gupta could still return to court once the case moves further along. The judge clarified that nothing in the order should influence the trial court’s own assessment of the case.
(Edited by Nardeep Singh Dahiya)
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