Delhi HC Grants Bail to Four Accused in Rs. 217 Crore Sukesh Chandrashekar Extortion Case After Nearly Five Years in Custody
Justice Prateek Jalan granted bail to Arun Muthu, Kamlesh Kothari, B. Mohanraj, and Sudheer, holding that their peripheral roles and near-certain trial delay outweigh MCOCA's stringent bail embargo.
On 7 July 2026, Justice Prateek Jalan, sitting singly at the High Court of Delhi, granted regular bail to four accused persons—Arun Muthu, Kamlesh Kothari, B. Mohanraj, and Sudheer—in connection with FIR No. 208/2021 registered at Police Station Special Cell, Delhi. The case arises from an alleged Rs. 217 crore extortion scheme orchestrated by Sukesh Chandra Shekhar from inside Tihar Jail. All four petitioners faced charges under the Maharashtra Control of Organised Crime Act, 1999 (MCOCA), among other statutes. The central question in each application was whether Article 21 of the Constitution can override Section 21(4) of MCOCA's strict conditions for bail when an undertrial has spent years in custody with no realistic prospect of an early trial.
The Scheme Behind FIR No. 208/2021
The FIR was lodged on 7 August 2021 at the instance of complainant Ms. Aditi Singh. On 15 June 2020, she received a call from a landline number. The caller introduced himself as a senior officer in the Ministry of Law and offered to help secure bail for her husband, who was in judicial custody in cases related to M/s Religare Enterprises Limited. The caller demanded Rs. 50 crores for facilitating that bail.
Over the following months, the caller and his associates allegedly extorted money from the complainant on multiple occasions between June 2020 and August 2021, amounting in total to Rs. 217 crores. The fraud involved impersonation of senior government officials, including the Home Secretary of India, and misrepresentations about the involvement of the Home Minister.
On 7 August 2021, the Special Cell laid a trap and arrested Pradeep Ramdanee while he was receiving an extorted payment. Interrogation of Pradeep led to the arrest of his brother Deepak Ramnani on 8 August 2021. Through technical surveillance and co-accused statements, the principal caller was identified as Sukesh Chandra Shekhar, already lodged in Tihar Jail as an undertrial in a separate matter. A raid on the intervening night of 7 and 8 August 2021 recovered two mobile phones from Sukesh inside his cell, and he was formally arrested in the FIR. The four petitioners were each arrested subsequently, with Arun Muthu, Kamlesh Kothari, and B. Mohanraj all arrested on 5 September 2021, and Sudheer arrested significantly later on 20 July 2024.
At the chargesheet stage, Sections 3 and 4 of MCOCA were invoked in addition to Sections 170, 384, 385, 388, 419, 420, 506, and 120B of the IPC and Section 66D of the Information Technology Act, 2000. The prosecution alleged that extorted funds were channelled through hawala networks from Sukesh in prison to his wife Leena Paulose in Chennai, and that the four petitioners assisted in managing, parking, and laundering those proceeds.
Roles Attributed by the Prosecution
Arun Muthu was a director of M/s Stash Wear Pvt. Ltd. According to the chargesheet, he assisted Leena and Sukesh in buying properties and cars from September 2018 to August 2021, helped open a proprietorship firm called LS Film Corp, facilitated bank entries of approximately Rs. 3 crores through his associates between July 2020 and August 2021, co-produced a web series allegedly sold for Rs. 3 crores, and parked seven to eight luxury cars belonging to Leena at different locations on 11 August 2021. He is said to have received a 2.5% commission on transactions. Confessional statements of co-accused Sukesh and B. Mohanraj under Section 18 of MCOCA stated that cash received through hawala was delivered to Mohanraj, who passed it to Kamlesh Kothari and Arun Muthu, with Arun dealing in bank entries.
Kamlesh Kothari was a car dealer in Chennai who met Leena through Mohanraj. The chargesheet alleged he assisted in purchasing two luxury cars in July 2020 by introducing a financial broker and transferring Rs. 5 crores, receiving Rs. 10 lakhs as commission. He also facilitated, with Mohanraj, the purchase of a property at ECR Road, Chennai for approximately Rs. 7 crores, registered in the name of his relative Jitender Kothari, with Rs. 5 crores routed through sham bank transactions and Rs. 2 crores paid in cash. He received Rs. 13.5 lakhs as commission on that transaction. An earlier bail application by Kothari had been dismissed by this Court on 11 July 2023, and a Special Leave Petition against that dismissal was itself dismissed by the Supreme Court on 9 July 2024 as a defective matter not refiled within 90 days.
B. Mohanraj was an advocate who, according to the chargesheet, was a close associate of Sukesh and Leena. He was described as managing their legal affairs overtly while covertly managing their funds and becoming an integral part of the syndicate. He facilitated the purchase of property at ECR Road, Chennai for Rs. 7.75 crores and two luxury cars—a Lamborghini Urus for Rs. 3 crores and a Bentley Bentayga for Rs. 2 crores—all in the names of third parties. He introduced Kamlesh Kothari to Leena and coordinated cash deliveries through Sudheer and Joel Daniel. In his own confessional statement under Section 18 of MCOCA, he admitted joining the syndicate while handling its legal matters, receiving commissions, and eventually becoming one of its most integral members. His earlier bail application was also dismissed by this Court on 11 July 2023.
Sudheer was described in the chargesheet as a trusted associate of Sukesh and Leena who, along with co-accused Joel Daniel, collected cash from hawala operators at locations including Sow Carpet, Chennai, and delivered it to Mohanraj and others. His own confessional statement detailed how Leena employed him as a driver, gradually drew him into the syndicate's financial operations, and tasked him with collecting and delivering hawala cash. He visited Sukesh in Tihar Jail on five occasions and allegedly travelled with him on fourteen chartered flights. Sudheer had absconded for nearly three years and was declared a proclaimed offender by the Special Court on 10 April 2023. He was apprehended near the Indo-Nepal border on a Look Out Circular and arrested on 20 July 2024.
The Legal Tension: MCOCA Section 21(4) Against Article 21
Section 21(4) of MCOCA imposes a higher threshold for bail than ordinary offences. The court must be satisfied that there are “reasonable grounds for believing that the accused is not guilty of such offence”—described in the 2023 judgment as something more than prima facie grounds—and that the accused is not likely to commit any offence while on bail. This condition places MCOCA on what the bench described, drawing from its earlier judgment in Leena Paulose, as a “higher pedestal” than even Section 43D(5) of the Unlawful Activities (Prevention) Act, 1967.
The legal landscape on how to reconcile this embargo with an undertrial's Article 21 rights had shifted markedly in the months before these applications were heard. In Leena Paulose (BAIL APPLN. 1802/2024, decided 5 May 2026), Justice Jalan had relied on the Supreme Court's three-judge bench decision in Gulfisha Fatima v. State (Govt. of NCT of Delhi) (2026 SCC OnLine SC 10), which itself interpreted the earlier three-judge bench judgment in Union of India v. K.A. Najeeb ((2021) 3 SCC 713). That framework held that statutory restrictions on bail cannot preclude constitutionally protected claims and that prolonged pre-trial incarceration without prospect of trial culmination must be considered even in special statute cases—alongside the nature of the offence and prima facie material.
Shortly after Leena Paulose was decided, the Supreme Court's decision in Syed Iftikhar Andrabi v. National Investigation Agency (2026 SCC OnLine SC 881) expressed reservations about the correctness of Gulfisha Fatima, prompting a reference to a larger bench in Tasleem Ahmad v. State Govt. of NCT of Delhi (SLP (Crl.) No. 3867/2026, dated 22 May 2026). Both Gulfisha Fatima and Syed Iftikhar Andrabi remained binding, even after the reference, as a referral does not strip a Supreme Court decision of its authority.
Justice Jalan, in the bail applications decided on 7 July 2026, adopted the same practical approach taken in Deepak Ramnani (BAIL APPLN. 4286/2024, decided 5 June 2026): rather than waiting for the larger bench or attempting to reconcile conflicting precedents, the court first asked whether the petitioners were entitled to bail even on the Gulfisha Fatima framework as understood in Leena Paulose. If yes, no further reconciliation exercise was necessary. A Division Bench of this Court in Khuram Parvez v. National Investigation Agency (CRL.A. 1234/2024, decided 10 June 2026) had adopted a similar approach in a UAPA matter, conducting a surface evaluation of the prosecution case against the backdrop of prolonged incarceration and the remote prospect of trial concluding.
The court also noted, in the context of the Ranjitsingh Brahmajeetsing Sharma v. State of Maharashtra ((2005) 5 SCC 294) precedent relied upon by petitioners' counsel, that statutory restrictions under MCOCA should not be pushed too far where constitutional rights are engaged.
How the Bench Reasoned Across the Four Applications
For Arun Muthu, Kamlesh Kothari, and B. Mohanraj, each of whom had been in custody since 5 September 2021, the court noted that they had spent approximately 4 years and 10 months as undertrials by the date of decision. Charges were framed only on 3 June 2026 by the Special Court. The prosecution had cited 403 witnesses, and the chargesheets collectively exceeded 10,000 pages. A supplementary chargesheet was further anticipated in respect of recently arrested co-accused Navas KI. The case involved 24 accused persons. With these facts, an expeditious conclusion of trial was, in the court's assessment, unlikely.
On the roles of these three petitioners, Justice Jalan was consistent: none of the three was accused of any participation in the foundational offence of extortion against the complainant. Their roles, as per the prosecution itself, were confined to planning and management of funds transmitted by Sukesh to Leena, including facilitating bank entries, purchasing properties and luxury cars in third-party names, and handling those assets. The co-accused statements under Section 18 of MCOCA did not attribute any higher role to any of them. The court held that, taking the prosecution case at its highest, continued incarceration of these three was inappropriate.
For Kamlesh Kothari and B. Mohanraj, both of whom were on their second bail applications before this Court, the bench declined to re-examine the prima facie merits already analysed in the 2023 judgment. The changed circumstance was the passage of three additional years in custody, which brought the constitutional dimension squarely into play.
The court acknowledged, in all three cases, that the delay in the trial could not be attributed to prosecutorial lapses or court inaction alone—a conclusion previously recorded in Leena Paulose. That finding, however, did not foreclose bail. Each accused's case had to be assessed on its own facts, with specific attention to the individual's attributed role.
In Arun Muthu's application, counsel argued without prejudice that even on the merits, the offences were not made out because the petitioner had no knowledge that his activities were connected to a criminal enterprise, citing Madras High Court judgments on the mens rea requirement for MCOCA abetment offences. The court found it unnecessary to address this argument, having concluded that bail was warranted on prolonged incarceration grounds alone. Arun Muthu had also been granted bail in connected PMLA proceedings (BAIL APPLN. 1821/2024) by this Court on 20 February 2025.
For Sudheer, the analysis differed on one material point. He had been arrested only on 20 July 2024—nearly three years after the others—and had been in custody for close to two years by the date of decision. The State argued he could not claim the benefit of prolonged incarceration. Justice Jalan rejected a rigid formula: whether continued incarceration has become excessive must be assessed on the facts of each case. The court compared Sudheer's role to that of co-accused Joel Daniel, who had been granted bail by the Special Court on 21 November 2022 after approximately 14 months in custody, and whose bail had not been challenged by the prosecution. Sudheer's custody of nearly two years already exceeded Joel's period at the time of Joel's release. Their roles were prima facie substantially similar—both salaried employees of Leena, acting as conduits for collecting and delivering hawala cash on Sukesh and Leena's instructions, without any decision-making authority.
On the question of Sudheer's absconding and declaration as a proclaimed offender, the court held that such conduct, while to be deprecated, could not by itself justify indefinite pre-trial custody. The apprehension that he might evade the process of law could instead be addressed through stringent bail conditions, including periodic reporting requirements.
Conditions Imposed
For Arun Muthu, Kamlesh Kothari, and B. Mohanraj, the bail was made subject to a personal bond of Rs. 2,50,000 each, with two sureties in the like amount, to the satisfaction of the Special Court or Duty Magistrate. Common conditions required each petitioner to appear before the Special Court on every date of hearing, surrender their passport, provide a permanent address and notify the Investigating Officer of any change, keep a mobile number in working condition and not change or switch it off without prior intimation to the IO, and refrain from tampering with evidence or influencing witnesses.
For Sudheer, the personal bond was set at Rs. 2,00,000 with two sureties, and all the standard conditions applied. Given his history of absconding, an additional condition was imposed: he must report to the jurisdictional police station near his place of residence every Monday and Thursday at 4:00 PM, with release within two hours of completing formalities. The court made clear that any violation of conditions could result in cancellation of bail.
In each judgment, the court clarified that observations made for the purpose of the bail application would neither influence trial proceedings nor be construed as an expression of opinion on the merits of the case.
Outcome
All four bail applications—BAIL APPLN. 1855/2024 (Arun Muthu), BAIL APPLN. 1881/2025 (Kamlesh Kothari), BAIL APPLN. 881/2025 (B. Mohanraj), and BAIL APPLN. 3916/2025 (Sudheer)—were allowed by Justice Prateek Jalan on 7 July 2026. Each petitioner was directed to be released on bail in connection with FIR No. 208/2021 subject to the conditions set out above. The bail application filed by co-accused Leena Paulose (BAIL APPLN. 1802/2024) had been dismissed on 5 May 2026 and that dismissal was not revisited in these proceedings. Copies of all four judgments were directed to be communicated to the concerned Jail Superintendents electronically for compliance.