She cited dropped charges for bail. The Supreme Court fined her ₹1 lakh.

When a Deputy Secretary’s Bail Appeal Backfired: The Cost of Misrepresentation Before the Supreme Court

Saumya Chaurasia was a Deputy Secretary and Officer on Special Duty in the Chhattisgarh Chief Minister’s Office. In December 2022, the Enforcement Directorate arrested her. The allegation: she had used her political access to facilitate an extortion racket involving coal and iron pellet transportation, run by one Suryakant Tiwari. The ED claimed she ensured pliant officers were posted in coal mining districts, and that she acquired properties worth over Rs. 30 crores through proceeds of crime routed via intermediaries. Her bail was rejected by the Special Judge & IVth Additional Sessions Judge, Raipur, and then by the High Court of Chhattisgarh at Bilaspur. When she approached the Supreme Court of India, she didn’t just lose her appeal. She was ordered to pay Rs. 1 lakh in costs for misrepresenting facts. The stakes were her liberty, her career, and the credibility of her legal team.

The Arrest and the Allegations

The story begins with an FIR registered on July 12, 2022, at Kadugodi Police Station, Bengaluru. FIR No. 129/2022 was lodged against Suryakant Tiwari under Sections 186, 204, 120-B, and 353 of the Indian Penal Code. The ED, based on this predicate offence, registered ECIR/RPZo/09/2022 on September 29, 2022, initiating a money laundering investigation under the Prevention of Money Laundering Act, 2002.

On December 2, 2022, Saumya Chaurasia was arrested. She was remanded to ED custody until December 6, 2022, which was later extended to December 10, 2022. The ED’s case was that she was a key facilitator in the extortion racket, using her position in the Chief Minister’s Office to ensure that officers favourable to the racket were posted in coal mining districts. The proceeds of crime, the ED alleged, were used to acquire properties worth over Rs. 30 crores.

The Bail Battles Below

Chaurasia moved a bail application under Section 437 of the CrPC read with Sections 45 and 65 of the PMLA before the Special Judge & IVth Additional Sessions Judge, Raipur. On January 20, 2023, it was rejected. She then approached the High Court of Chhattisgarh at Bilaspur in Miscellaneous Criminal Case No. 1258 of 2023. On June 23, 2023, the High Court dismissed her application. Both courts found that the twin conditions under Section 45(1) of the PMLA — that the court must be satisfied that there are reasonable grounds to believe the accused is not guilty, and that the accused is not likely to commit any offence while on bail — were not met.

The Supreme Court Appeal: A Dangerous Argument

Before the Supreme Court of India, Chaurasia’s legal team tried a new line of attack. They argued that the scheduled offences under the PMLA — the predicate offences in the FIR — had been dropped from the chargesheet filed against Suryakant Tiwari. The logic was simple: if the predicate offence no longer existed, the PMLA proceedings against her must fall. It was a bold argument, and if accepted, it could have fundamentally altered the trajectory of the case.

But there was a problem. The documents showing that the scheduled offences had been dropped were never placed before the High Court during the bail arguments. The Supreme Court noticed this immediately. The Bench, comprising Justice Bela M. Trivedi (author of the judgment) and Justice Aniruddha Bose, examined the record. They found that the appellant’s counsel had relied on documents that were not part of the record before the High Court. This, the Court held, amounted to misrepresentation of material facts.

The Court’s Finding: A Breach of Duty

The Supreme Court did not mince words. It observed that parties approaching the Court under Article 136 of the Constitution must make full and correct disclosure of material facts. The affidavit and the certificate of the Advocate-on-Record at the end of the Special Leave Petition carry legal sanctity. Relying on documents that were never placed before the lower court, the Court said, was a serious breach of this duty.

The Court noted that the appellant’s counsel had argued that the scheduled offences were dropped from the chargesheet, but this fact was never brought to the attention of the High Court. The Bench observed that a very high standard of professionalism and legal acumen is expected from advocates, particularly designated Senior Advocates appearing in the highest court, so that their professionalism may be followed and emulated by advocates in High Courts and District Courts.

The Doctrine That Mattered: Discretionary Bail for Women

Beyond the misrepresentation issue, the Court also addressed the substantive law on bail under the PMLA. The appellant had argued that she was entitled to bail under the first proviso to Section 45(1) of the PMLA, which states that a person who is under the age of sixteen years or is a woman or is sick or infirm may be released on bail, if the special court so directs.

The Court clarified that this proviso is discretionary, not mandatory. It cited its own recent decision in Enforcement Directorate v. Preeti Chandra (SLP (Crl.) No. 7409 of 2023, order dated 04.08.2023), which held that the proviso confers discretion on the Court to grant bail to a woman; it does not mandate release on bail. The Court also referred to Prahlad Singh Bhati v. NCT, Delhi and Another (2001) 4 SCC 280, which held that the first proviso to Section 437 CrPC does not mean persons specified therein should necessarily be released on bail.

The Court observed that while courts need to be more sensitive and sympathetic towards persons of tender age and women who may be more vulnerable and sometimes misused as scapegoats, courts should also not be oblivious to the fact that educated and well-placed women engage in commercial ventures and may advertently or inadvertently engage in illegal activities. In this case, the Court found that there was prima facie evidence of money laundering against Chaurasia, and the twin conditions under Section 45(1) were not satisfied.

The Scheduled Offence Argument: A Dead End

The Court also rejected the argument that the dropping of scheduled offences from the chargesheet vitiated the PMLA proceedings. Following its landmark decision in Vijay Madanlal Choudhary & Ors. v. Union of India & Ors. (2022 SCC Online SC 929), the Court held that the scheduled offences mentioned in the FIR survive for PMLA purposes until the accused is finally absolved by discharge, acquittal, or quashing by a court of competent jurisdiction. The offences mentioned in a chargesheet by the Investigating Officer are not the final conclusion on whether scheduled offences exist.

THE PLAY: If you are arguing bail under the PMLA, do not rely on documents that were never placed before the lower court. The Supreme Court will treat this as misrepresentation and dismiss your appeal with costs. The first proviso to Section 45 is discretionary, not a free pass for women accused of money laundering.

Why This Matters in Practice

For advocates, this judgment is a stark reminder of the duty of candor before the Supreme Court. The Court has made it clear that the affidavit and the certificate of the Advocate-on-Record carry legal sanctity, and any reliance on documents not placed before the lower court will be treated as misrepresentation. The costs of Rs. 1 lakh imposed in this case are a warning that such conduct will not be tolerated.

For CFOs and founders, this case underscores the risks of being associated with individuals or entities under investigation for money laundering. The PMLA has a long reach, and the twin conditions for bail under Section 45 are stringent. Even if you are a woman, the proviso to Section 45 does not guarantee bail. The court will look at the extent of your involvement and the nature of the evidence against you.

For the legal community, the judgment also clarifies that the dropping of scheduled offences from a chargesheet does not automatically kill the PMLA proceedings. The scheduled offence survives until a court of competent jurisdiction finally absolves the accused. This is a critical point for anyone advising clients in PMLA cases.

The Bottom Line

If you are arguing a bail application under the PMLA, ensure every document you rely on is part of the record before the lower court. The first proviso to Section 45 is a shield, not a sword — it gives the court discretion, not a mandate. And if you try to misrepresent facts before the Supreme Court, you will not only lose your appeal but also pay for the privilege.