Supreme Court Grants Bail To Prayag Group Promoters In ₹2,862 Crore Money Laundering Case

The Supreme Court on Friday granted bail to Basudeb Bagchi and Avik Bagchi, promoters of the Prayag Group in a money laundering case involving alleged proceeds of crime of around ₹2,862 crore.

The promoters have been accused of defrauding thousands of investors through time-share, real estate, and gold-based investment schemes and siphoning proceeds of crime through shell entities.

A bench of Justices Vikram Nath and Sandeep Mehta directed

"The petitioners shall be released on bail, subject to the satisfaction of the trial court."

The court further directed the petitioners to deposit their passports, refrain from travelling abroad without the permission of the trial court and cooperate with the trial, while clarifying that the ED would be at liberty to seek cancellation of bail in case of non-cooperation.

Appearing for the petitioners, counsel submitted that the present prosecution substantially overlapped with an earlier money laundering case in which the petitioners had already remained in custody for about 20 months.

"It is really a second prosecution, as far as I'm concerned.", counsel submitted.

He argued that the only distinction sought to be drawn by the ED was that, after the Calcutta High Court appointed a one-man committee headed by a retired judge to take over the assets and functioning of the companies for distribution to depositors, the agency alleged that hotel staff functioning under the committee remained answerable to the petitioners and diverted cash.

Calling the allegations speculative, counsel said:

"All of this is presumptive. There is not a single money trail, there is not a single amount."

He further contended that the present 2024 ECIR relied upon the very same facts that formed part of the earlier prosecution complaint and argued that there was no new incident or distinct proceeds of crime.

Opposing the plea, Additional Solicitor General S.V. Raju, appearing for the ED, submitted that the alleged fraud affected 38.7 lakh investors, involving their hard-earned lifetime savings. He argued that many investors had still not received refunds and further contended that the delay in the trial was attributable to the accused.

During the hearing, the bench repeatedly questioned the ED over the delay in registering the fresh ECIR despite an earlier investigation. Justice Nath observed:

"Allegations are broadly overlapping, no dispute. So when he was in your custody... why didn't you take him in custody in this case?"

The Court further remarked, "The incidents or the allegations of cheating or money laundering, they are all of 2013-14, or even before that.". When the ED submitted that the ECIR had been registered only in 2024, the Bench responded:

"That is your problem. Why didn't you register it for 10 good years?". Referring to the ED's allegation that money laundering continued even after the earlier investigation, the Court asked:

"Then you say that there has been continuous money laundering. What are you doing? What are you sleeping?".

Despite the ED's opposition, the court ultimately granted bail to the petitioners

Background

The Calcutta High Court had initially denied them bail on January 15, 2026.

While refusing the bail, it had observed, “The liberty of an individual cannot be viewed in isolation from the collective interests of thousands of defrauded investors.” The challenge arises from an ECIR registered by the ED in 2024. According to the prosecution, the promoters allegedly defrauded thousands of investors through time-share, real estate, and gold-based investment schemes over several years, involving around Rs. 2,862 crores.

While the promoters claimed to have facilitated refunds of approximately Rs. 1,140 crores, the agency alleged that nearly Rs. 1,906 crores remained untraced and represented proceeds of crime layered through shell entities.

The ED also alleged that fresh proceeds of crime were generated even after the commencement of an earlier investigation in 2016. Before the High Court, the petitioners argued that the present ECIR was a mirror copy of the earlier 2016 investigation and that their continued incarceration amounted to pre-trial punishment.

Rejecting the plea, the High Court held that the petitioners failed to satisfy the twin conditions under Section 45 of the PMLA. It also observed that economic offences involving public money constituted a “class apart.” The High Court directed the trial court to expedite proceedings on a day to-day basis.

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