Rs 3269 crore fraud: VP denied bail, Supreme Court says no 'parity' in crime

He was the VP who bought supplies. The bank lost Rs 3269 crore. He said, 'But the other accused got bail.' The Supreme Court replied — no, you don't get to copy a mistake.

Tarun Kumar, Vice President (Purchases) of Shakti Bhog Foods Ltd, sat in a Delhi courtroom in November 2023, arguing that his prolonged incarceration was unfair. His co-accused had walked free on bail. Why was he still behind bars? The Supreme Court had a sharp answer: "Article 14 does not perpetuate illegality" — the right to equality does not give you a licence to demand an illegal order just because someone else got one.

When the VP became Accused No.10

The story begins not with Tarun Kumar, but with a company called Shakti Bhog Foods Ltd (SBFL). SBFL ran a food business. It also, according to a forensic audit, ran a massive fraud. Through fake invoices, shell companies, stock manipulation, and siphoning of loan funds, the company defrauded a consortium of banks of approximately Rs 3,269 crore. That is not a typo. Three thousand two hundred and sixty-nine crore rupees.

The Central Bureau of Investigation (CBI) registered an FIR (a written complaint that starts a police investigation) on 31 December 2020. The Enforcement Directorate (ED) followed with an ECIR (the ED's equivalent of an FIR) on 31 January 2021, opening a money laundering case. Tarun Kumar was not named in the first three complaints. He was the purchases VP — the man who bought supplies. On 22 June 2022, the ED filed its fourth supplementary complaint and named him as Accused No.10, alleging he had acquired Rs 3.69 crore as proceeds of crime. He was arrested the same day. The courtroom fell silent as the prosecution read out the figure: Rs 3.69 crore, allegedly funneled through the company's supply chain.

December 23: the first rejection

Tarun Kumar applied for bail before the Special Judge at the Rouse Avenue Court Complex in Delhi. The VP's lawyer held a sheaf of papers — each page a failed bail application — as he argued for his client's release. The judge rejected it on 23 December 2022. He then went to the Delhi High Court. The High Court rejected his bail on 18 July 2023. Both courts held that the stringent conditions of Section 45(1) of the Prevention of Money Laundering Act (PMLA) — the twin conditions that must be satisfied before bail can be granted — were not met.

What are these twin conditions? Under Section 45(1) of the PMLA, a court cannot grant bail to an accused unless it is satisfied that there are reasonable grounds for believing that the accused is not guilty of the offence, and that the accused is not likely to commit any offence while on bail. The burden of proving both conditions lies on the accused. This is not the ordinary bail standard under the Code of Criminal Procedure. This is a much higher bar, deliberately set by Parliament for money laundering cases.

The parity argument that failed

Before the Supreme Court, Tarun Kumar's counsel made three main arguments. First, that several co-accused had already been granted bail by various courts, and he deserved the same treatment under Article 14 — the right to equality. Second, that he was not named in the original FIR and had been arrested only after the fourth supplementary complaint. Third, that his prolonged incarceration — over 16 months at the time of the appeal — violated his right to personal liberty under Article 21 of the Constitution.

The Supreme Court bench, comprising Justice Bela M. Trivedi and Justice Aniruddha Bose, was unimpressed. The bench's gaze was fixed on the accused as the twin conditions were recited. The court held that parity cannot be claimed as an absolute right for bail. "Article 14 does not perpetuate illegality" — meaning, if a co-accused was granted bail on grounds that were distinguishable (for example, medical reasons, a different role in the alleged conspiracy, or a different evidentiary position), others cannot claim bail merely because someone else got it. The court must focus on the specific role of the accused under consideration.

What Section 45 actually demands

The court then turned to the core issue: had Tarun Kumar satisfied the twin conditions under Section 45(1)? The answer was no. The statutory presumption under Section 24 of the PMLA (a legal presumption that proceeds of crime are indeed proceeds of crime, unless the accused proves otherwise) applied against him. Statements recorded under Section 50 of the PMLA (statements given to ED officers during investigation) are admissible in evidence, and along with documentary material, they can constitute sufficient basis for the prosecution to oppose bail.

The court noted that Tarun Kumar had failed to discharge the burden of establishing reasonable grounds for believing he was not guilty. The allegations against him were serious: as Vice President (Purchases), he was part of the management team that allegedly orchestrated the fraud. The Rs 3.69 crore attributed to him as proceeds of crime was not a small amount. The court also held that "economic offences constitute a class apart", requiring a stricter approach to bail, given their deep-rooted conspiracies, huge public fund losses, and serious threat to the financial health of the country.

The precedents that sealed the case

The bench relied on a string of Supreme Court judgments. In Vijay Madanlal Choudhary v. Union of India (2022), the court had upheld the constitutional validity of the PMLA's stringent bail provisions. In Gautam Kundu v. Directorate of Enforcement (2015) and Rohit Tandon v. Directorate of Enforcement (2018), the court had held that the twin conditions are mandatory and apply even to bail applications under Section 439 of the CrPC (the High Court's special powers to grant bail) because of the PMLA's overriding effect. In State of Gujarat v. Mohanlal Jitamalji Porwal (1987) and Y.S. Jagan Mohan Reddy v. CBI (2013), the court had emphasised that economic offences must be treated differently from ordinary crimes. Other precedents cited included Nimmagadda Prasad v. CBI (2013), State of Bihar v. Amit Kumar alias Bachcha Rai (2017), and Manish Sisodia v. CBI (2023).

The court also addressed the argument about prolonged incarceration under Section 436A of the CrPC (the provision that sets a maximum period for which an undertrial prisoner can be detained). The court held that this provision applies to PMLA cases, but the relief is discretionary and not mechanical. It must be considered on a case-to-case basis, and the court is empowered to extend detention beyond the statutory limits with recorded reasons. In other words, you cannot automatically demand release just because you have been in jail for a certain period.

What this means for every accused in a PMLA case

For practitioners, this judgment is a clear signal: the parity argument is dead in PMLA bail applications unless the co-accused's case is identical in every material respect. You cannot simply point to another accused who got bail and say, "Me too." You must demonstrate that your role, the evidence against you, and your personal circumstances are indistinguishable from the person who got bail. Even then, the court retains discretion.

More fundamentally, the judgment reaffirms that Section 45(1) is not a mere formality. The accused must actively prove — with evidence — that there are reasonable grounds to believe he is not guilty and that he will not commit any offence while on bail. The presumption under Section 24 works against the accused from the start. This is a heavy burden, and it is not discharged by simply saying, "I was not named in the original complaint."

THE PLAY: In every PMLA bail application, lead evidence — not arguments — to rebut the Section 24 presumption; parity is a secondary argument, never the primary one.

The last word from the bench

The court dismissed the appeal. Tarun Kumar remains in custody. The bench ended its judgment with a quiet but unmistakable message: in economic offences, the scales of justice tilt toward the public purse, not the individual's liberty. The VP who bought supplies will have to wait.