Calcutta High Court denies bail to Sujit Bose in ED municipal recruitment case

The Enforcement Action

The Calcutta High Court has rejected the bail application of former West Bengal minister Sujit Bose, who was arrested by the Directorate of Enforcement (ED) in a money-laundering case linked to alleged irregularities in municipal recruitment. In a judgment dated 13 October 2026 in C.R.M. (R) 58 of 2026, Justice Tirthankar Ghosh held that the petitioner "has failed to overcome the rigors of Section 45 PMLA Act" and dismissed the application.

The bail plea was filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, read with Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA), in connection with ECIR/KLZO-II/15/2023 dated 11 May 2023. It followed an earlier rejection of bail by the Chief Judge, City Sessions Court, Calcutta, through Order No. 22 dated 21 May 2026. The High Court reserved its judgment on 25 September 2026.

According to the judgment, the ED's case is that proceeds of crime of about Rs 20.40 crore were generated and laundered through personal accounts and controlled entities, with further investigation continuing. The petitioner, who the order records as a former Vice-Chairman of South Dum Dum Municipality, disputed this in court. His counsel argued that he was never named by the CBI in the predicate case and that "not a single rupee has been traced" from any candidate to him.

The ruling is a bail decision, not a verdict. No court has found the petitioner guilty, and the allegations remain to be tested at trial.

How the Scheme Worked

The case traces back to an order dated 21 April 2023 passed by the Calcutta High Court in WPA 9979 of 2022, which directed the CBI to register a predicate FIR into alleged irregularities in municipal recruitment. The CBI registered RC 0102023A0005 on 22 April 2023, and the ED recorded its ECIR on 11 May 2023, according to the judgment.

The ED's case, as summarised in the order, relies on documents and digital devices seized in searches on 19 March 2023, which allegedly contained details of 412 candidates considered for municipal recruitment along with coded references to politically exposed persons. The ED claims that on comparing this data with municipal records, a substantial number of candidates it attributes to the petitioner's recommendation were appointed in South Dum Dum Municipality. Its first supplementary prosecution complaint puts that figure at as many as 340, the order records. The agency also relies on an Excel file seized in an October 2023 search and on statements recorded under Section 50 of the PMLA.

On the money trail, the ED alleges, per the judgment, that cash deposits aggregating Rs 8,09,59,210 between 2015 and 2023 in linked accounts were projected as legitimate receipts of hospitality businesses. It further alleges shareholding transfers followed by interest-free unsecured loans from entities that, according to a search on 28 November 2025, did not exist at their registered addresses, as well as remuneration and consultancy payments that it says lacked corresponding services. The ED also relies on a flat transaction in which, it says, Rs 1,11,99,182 of the consideration remained unpaid.

The petitioner contested each strand. His counsel told the court that the CBI's chargesheet dated 30 June 2024 confined the alleged conspiracy to 29 illegal appointments and did not name him, that the cash deposits reflect business turnover, and that he cooperated with summons in May 2026 before his arrest on 11 May 2026. He also argued that much of the amount the ED cites comprises attached or frozen assets not recovered from him personally.

The court noted the ED's submission that, during August and September 2026, about 45 immovable properties were traced, valuations were pending, and information had been shared with the CBI, which has begun further investigation. The court described this as "a vital stage of the investigation".

The Law Invoked

The central provision is Section 45 of the PMLA, which sets the so-called twin conditions for bail in money-laundering cases. Before releasing an accused, a court must record satisfaction that there are reasonable grounds for believing the accused is not guilty and is not likely to commit an offence while on bail. The judgment relied on the Supreme Court's ruling in Union of India v. Kanhaiya Prasad, 2025 SCC OnLine SC 306, which cautions courts against a "casual or cursory approach" to these conditions.

The order also discusses Section 19(1) of the PMLA, which governs the ED's power to arrest and requires the officer to record "reasons to believe". The petitioner argued that his grounds of arrest and reasons to believe were verbatim identical. Section 50 governs statements recorded by the ED, Section 2(1)(u) defines proceeds of crime and Section 3 defines the offence of money laundering. Section 24 creates a presumption about proceeds of crime, which the petitioner said cannot arise until foundational facts are established, and Section 66(2) allows the ED to share information with other agencies.

The procedural vehicle was Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023, the provision under which High Courts and Sessions Courts consider bail.

What Happens Next

The judgment notes that a separate writ petition, WPA 120109 of 2026, challenging the legality of the petitioner's arrest under Section 19 of the PMLA and the consequent remand orders, is pending. That challenge proceeds independently of the bail application.

As a matter of standard procedure, a High Court order refusing bail can be challenged before the Supreme Court by way of a special leave petition, and a fresh bail application can be made if circumstances change, for example after investigation concludes. The prosecution complaint and supplementary complaint are before the jurisdictional Special Court, where the case would proceed to cognizance, framing of charges and trial.

Separately, attachments made under the PMLA must be confirmed by the Adjudicating Authority, and those decisions can be appealed to the Appellate Tribunal. The ED has told the court that its investigation into other persons and further proceeds continues. Throughout, the allegations in the ECIR and prosecution complaints remain allegations subject to due process, and the denial of bail is not a finding of guilt.

What It Means

For ordinary readers, the ruling is mainly a reminder of how high the bail threshold under Section 45 of the PMLA is. Once the ED files a prosecution complaint, an accused must persuade the court of reasonable grounds to believe they are not guilty, which is a significantly stricter test than in most criminal cases. The judgment shows the court weighing the stage of the investigation, including newly traced assets, when applying that test.

The patterns the ED alleges in this case are ones that also appear in other money-laundering matters: cash-heavy businesses used to explain deposits, unsecured loans from companies that cannot be found at their registered addresses, and payments for services that may not have been rendered. Investors and lenders can protect themselves against similar structures by checking a company's details on the Ministry of Corporate Affairs master-data portal, confirming that its registered office is genuine, and being cautious about entities with unexplained related-party loans.

The case also concerns alleged payments for public jobs. Genuine government and municipal recruitment is conducted through published notifications and does not require informal payments. Anyone asked for money in exchange for a job should treat that as a warning sign and report it to the police or the relevant vigilance authority.

FAQ

Did the court find the people named guilty, per the order?

No. A chargesheet (or FIR / provisional attachment) contains allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. The High Court only decided that bail could not be granted at this stage under Section 45 of the PMLA. The petitioner has denied the allegations in court, and the merits will be decided at trial.

What exactly did the Calcutta High Court order?

In its judgment dated 13 October 2026, the court dismissed C.R.M. (R) 58 of 2026, the bail application filed by Sujit Bose in connection with ECIR/KLZO-II/15/2023. It held that he had not overcome the rigours of Section 45 of the PMLA "at this stage", citing the ongoing investigation.

What are the twin conditions under Section 45 of the PMLA?

Before granting bail in a money-laundering case, the court must be satisfied that there are reasonable grounds for believing the accused is not guilty of the offence and is not likely to commit any offence while on bail.

Can the order be challenged?

Yes. As standard procedure, a High Court order refusing bail can be challenged before the Supreme Court through a special leave petition. A separate writ petition challenging the arrest itself, WPA 120109 of 2026, is pending before the High Court, according to the judgment.

How can I check whether a company I deal with is genuine?

Use the Ministry of Corporate Affairs company master-data search to confirm a company's registration, status, directors and registered address. For investment intermediaries, check the SEBI registered-intermediaries list, and for lenders, the RBI's list of regulated entities.

Where can I read the official judgment?

The full judgment, Sujit Bose vs Directorate of Enforcement dated 13 October 2026, is available on Indian Kanoon at the link below.

This report is based on the official Calcutta High Court judgment in Sujit Bose vs Directorate of Enforcement dated 13 October 2026. It was surfaced via coverage in SCC Online.