Varun Puri v. Directorate of Enforcement, 2026

The Enforcement Directorate initiated an investigation pursuant to an ECIR registered in 2021 concerning Universal Buildwell Private Limited and its promoters.

The ED alleged that substantial amounts were collected from homebuyers and financial institutions for residential and commercial projects.

According to the prosecution, funds collected for these projects were diverted to intermediary entities and used for purposes including unrelated land acquisitions and repayment of loans.

The ED alleged that funds were routed through a network of companies controlled by the petitioner, his father and his brother.

It was further alleged that assets were transferred to conceal their ownership and origin.

The prosecution alleged that certain units were oversold and that mortgaged units were sold without the lender's approval.

The ED relied upon statements recorded under Section 50 PMLA, alleging that the petitioner admitted signing cheques and executing Builder-Buyer Agreements.

The petitioner was arrested on 22 July 2025 and remained in judicial custody for approximately one year and twenty-two days when his bail application was considered.

The investigation had been completed and the prosecution complaint was filed on 19 September 2025.

There was no indication that further custodial interrogation of the petitioner was required.

The prosecution proposed to examine 49 witnesses and relied upon approximately 90 documents running into more than 10,000 pages.

Despite the ECIR having originated in 2021, the proceedings remained at the stage of cognizance, raising serious concerns regarding the prospect of an early trial.

The petitioner argued that liability was being attributed to him principally because of his position as a director.

He submitted that he held only a minuscule shareholding, that no specific personal benefit had been identified, and that none of his personal properties or bank accounts had been attached.

The petitioner further submitted that approximately ₹59.64 lakh, described as dues to the director, represented a legitimate entitlement rather than proceeds of crime.

It was also submitted that the company's affairs were being dealt with under an approved NCLT resolution plan and that the petitioner had already obtained bail in the predicate offences.

The ED opposed bail, contending that the petitioner was a promoter-director and authorised signatory, rather than an inactive or sleeping director.

The ED alleged that approximately ₹46 crore had been diverted through one intermediary entity alone.

The ED also relied upon allegations concerning the petitioner and his family in the predicate offences.

The High Court found no tangible material establishing a current flight risk or a concrete likelihood of interference with witnesses or evidence.

The evidence was predominantly documentary and was already in the possession of the investigating agency.

The High Court granted regular bail to the petitioner.

Justice Sumeet Goel held that the stringent requirements of Section 45 PMLA cannot operate as an absolute barrier to constitutional protection of personal liberty where prolonged incarceration becomes disproportionate and there is no realistic prospect of an early trial.

The Court clarified that this conclusion did not amount to giving Section 45 a relaxed interpretation.

Instead, the relief flowed from the independent constitutional protection under Article 21.

The Court described the Constitution as the “Grundnorm”, observing that statutory restrictions cannot completely exclude constitutional remedies.

The Court identified a “grave constitutional asymmetry” where the State invokes stringent restrictions upon liberty but does not ensure a corresponding reasonably expeditious trial.

The Court held that stringent bail restrictions carry a corresponding obligation upon the prosecution and State to proceed with the trial fairly and expeditiously.

Where the prosecution fails to discharge that obligation and detention continues indefinitely, continued incarceration may cease to derive sufficient legitimacy from the statute.

The Court rejected a purely mathematical approach to determining when incarceration becomes constitutionally excessive.

The one-half and one-third thresholds under Section 436-A CrPC and Section 479 BNSS were treated as statutory benchmarks rather than exhaustive limits on constitutional jurisdiction.

The Court held that prolonged incarceration must be assessed through a holistic and multi-factorial approach, considering the prescribed punishment, the accused's prima facie role, statutory time limits, the stage of proceedings and, most importantly, the realistic prospects of the trial concluding.

The Court held that the seriousness of an economic offence cannot ipso facto justify indefinite incarceration.

The right to speedy trial applies even where the alleged offence is serious or economically significant.

In the present case, investigation had concluded, the prosecution complaint had been filed, the evidence was predominantly documentary, and the proceedings remained at the stage of cognizance.

The Court found insufficient material demonstrating that release would create a substantial risk of absconding or interference with prosecution evidence.

Bail was granted subject to conditions including surrender/deposit of the passport, furnishing financial security of ₹20 lakh through a demand draft, FDR or bank guarantee, filing a monthly affidavit concerning non-involvement in any offence, and providing the petitioner's cellphone number to the Investigating Officer.

The ED was given liberty to seek cancellation of bail in the event of breach of the conditions.

Constitutional supremacy over statutory restrictions: The judgment's central contribution is its treatment of Article 21 as an independent constitutional source of protection rather than merely an interpretive tool for Section 45 PMLA.

Speedy trial as the counterweight to stringent bail laws: If the State seeks to keep an accused behind bars under a stringent bail regime, it must also act with corresponding urgency to bring the accused to trial.

Rejection of mechanical custody calculations: The judgment refuses to reduce Article 21 to a mathematical formula. Statutory thresholds and constitutional protection operate in different spheres.

Importance of the actual stage of trial: The Court placed particular emphasis on the difference between a theoretical possibility of trial and a realistic prospect of trial conclusion.

Gravity versus proportionality: Serious allegations involving homebuyers remain relevant, but seriousness alone cannot defeat the right to liberty when the accused has not been convicted and the trial is unlikely to conclude within a reasonable period.

Economic offences are not automatically excluded from bail: The judgment rejects a blanket approach under which every economic offence is treated as inherently deserving of prolonged incarceration.

Role-specific assessment: The petitioner's limited shareholding, alleged absence of personal benefit and the nature of his alleged involvement were relevant considerations in assessing the justification for continued detention.

Broader impact on PMLA bail jurisprudence: The ruling potentially strengthens the use of Article 21 as an independent basis for bail in long-running PMLA prosecutions, particularly where investigation is complete and the trial is moving slowly.

No automatic long-custody rule: The judgment does not establish that an accused automatically becomes entitled to bail after a fixed number of months. The Court favoured a fact-sensitive, multi-factorial assessment.

Historical foundation: Justice Goel supported the constitutional reasoning through references to Ulpian's principle concerning imprisonment, Clause 40 of the Magna Carta and Blackstone's warning against confinement without a swift trial.