TaxTMI 
TaxTMI 
2026 (2) TMI 1213
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...."), registered in Hyderabad Zonal Office under Sections 3/4 of Prevention of Money Laundering Act, 2002 (hereinafter referred to as "PMLA"). 2. A Complaint was filed against the Applicant on 27.08.2025 in Delhi and the investigations are complete. The Applicant states that he was arrested on 11.07.2025, in terms of Section 19 of PMLA and since then, he is in Judicial Custody. 3. The Applicant explains that he was in the business of providing gift cards to various Organizations and individual clients, through his Company in the name and style of Freebie Solution Pvt. Ltd. In the year 2022, he along with his family, shifted to Dubai and started Hospitality business therein. 4. On 26.02.2024, FIR No.24/2024 under Section 420 and 120B of the Indian Penal Code, 1860 (hereinafter referred to as "IPC") was registered against unknown persons at P.S. Cyber Crime Central, Faridabad. Since the Applicant was living in Dubai, the Prosecution Agency issued a LOC in order to secure the presence of the Applicant. The High Court of Punjab and Haryana kept the LOC in abeyance from 23.05.2025 to 25.07.2025. The Applicant was arrested in said FIR and was granted Bail vide Order dated 09.07.20....
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....t belonged to 'Xindai Technologies Private Limited'. 11. The Xindai had enlisted 29 bank virtual bank Accounts and one physical Account. On the analysis of these Accounts, it was stated that an amount of Rs.152.62 Crores payin took place in all the virtual Accounts and Rs. 18.85 Crores payout took place, in the physical Account. 12. It was further alleged that money from 29 virtual Account were transferred to 38 physical Accounts, with the major portion of money being transferred to M/s Ranjan Moneycorp. One Anurag Aggarwal during his interrogation, disclosed that Pankaj Wadhwa had approached him to arrange Current Accounts of money changers who can give the cash in liquid on commission basis, for his clients Varun Arora and Bhupesh Arora, the Applicant. 13. The specific role of the Applicant in the Chargesheet of Hyderabad Police was that he was named as a client of Pankaj Wadhwa (A-20), in his conversation with Anurag Aggarwal (LW-2). The Applicant asserted that the Statement of LW2 merely suggested that A-20 was seeking Current Accounts of money changers, for converting money into cash/forex for the Applicant and another person, Varun Arora. There is no allegation that ....
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....s filed before the Ld. Trial Court. The Applicant moved Bail Application No.236/2025 for Regular Bail, but his Application was dismissed on 20.09.2025 by the Ld. Special Judge. 22. The Applicant has sought Bail on the grounds that his arrest and detention was illegal. While he was arrested, none of the safeguards provided under Section 19 of PMLA were followed. Reliance is placed on V. Senthil Balaji vs. State represented by Deputy Director and Ors., (2024) 3 SCC 51, wherein it was observed that it is the bounden duty of the Magistrate at the time of remand, to see that the compliance of Section 19 of PMLA is made and the failure would entitle the accused to get released. 23. Furthermore, the entire case of ED is based on assumptions and no material whatsoever, is available with the ED to demonstrate that the Petitioner is guilty of the offence of Money Laundering. The requirement and safeguards of Section 19 of PMLA are at a much higher pedestal in as much as there has to be a finding recorded by the Arresting Officer that he is 'guilty of money laundering' on the basis of 'reasons and materials'. 24. Reliance is placed on Arvind Kejriwal vs. Directorate of Enforcement (2....
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....ment of Pankaj Wadhwa regarding his relationship with the Applicant, he stated that he knew the Applicant through Pankaj Wadhwa and had met him in the office of Pankaj Wadhwa, in Rohini. He had noticed that the Applicant used to give directions to Pankaj Wadhwa, though he never had any professional involvement with the Applicant. Suddenly, in his Statement dated 07.07.2025, his version changed completely when he stated that Pankaj Wadhwa had introduced the Applicant as his employer in August, 2021. 30. He further stated that the Applicant was the person who was transferring the RTGS through Pankaj Wadhwa. When one of the Bank accounts of Rohit Vij was freezed and payment got halted, the Applicant called him and started enquiring about the payments. In 3-4 instances, where token for payment was not processed by Rohit Vij in time, then Bhupesh Arora directly called him and started enquiring why the payment got delayed. When Pankaj Wadhwa was not available for 7-10 days, the Applicant sent him the tokens and to arrange the persons for foreign currency pickups, from the locations provided by Rohit Vij. He regularly had meetings with the Applicant from July 2021 to January 2022; some....
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....y be judicial proceedings for the limited person mentioned therein, but a confession made by an Accused is a statement under Section 50 PMLA, is not a judicial confession nor is there any provision in the PMLA like Section 15 TADA or Section 18 MACOCA which specifically makes the confession of a co-accused admissible against the other accused under certain eventualities. 37. In Surinder Kumar Khanna vs. DRI, (2018) 8 SCC 271 the Supreme Court held that the quality and effect of the confession of a co-accused, needs to be considered in order to receive assurance to the conclusion of guilt which the judicial mind is about to reach, on said other evidence. Reliance is also placed on Deepak Bhai Patel vs. State, (2019) 16 SCC 547. 38. It is further contended that the main person in conversion of Forex is Sahil Bajaj, who does not named the Applicant at all. Similarly, Vikas Kumar, Chartered Accountant of the Applicant was examined by ED as a witness, but he also does not state that the Applicant is in any way connected with the entities namely Truvinta, Melanic, Sark Enroll. 39. Thakur Dayapal Singh (A-19) Director of Sark Enrol in his Statement, also nowhere stated that the A....
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....Vivek, is unreliable. In fact, he also said that he has no connection with M/s Freebies Solutions, except for purchasing of Gift Cards. 44. Likewise, statement of Shailesh Poddar (A-32) who had stated that there were screenshots of the chats available in his pen drive, which he would try to locate, but there is no explanation as to why these chats stored in the pen drive, were given to Pankaj Wadhwa. The IP address is the weakest piece of evidence to connect the Petitioner with the entities, particularly because there is no authenticity of such IP addresses and it is not known as to where such IP addresses were obtained from and who had provided them and when. The Certificate under Section 65B of Evidence Act (now under Section 63 BSA), is not there, making them inadmissible. Only 14 out of 181 IP Addresses are common, which are also of different period and time. There is no prima facie case to establish whether the said IP Addresses pertain to Delhi or any other place. Hence, the place of origin being common, has to be rejected. 45. Moreover, all these Statements were based on leading questions and the extracts are common as if they were cut, copy, paste Statements, which ar....
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....e stage of consideration of Bail even under PMLA, the Court has only to see preponderance of probability. Generally speaking, the professional would act on the instructions of his client. However, whether he has gone beyond his professional duty, is something which is required to be seen and examined during the trial. 51. Reliance is also placed on Preeti Chandra vs. ED, (2023) 3 HCC (Del) 1, where this Court observed that mere association with the person or establishment allegedly involved in money laundering, does not lead to an inference of mens rea. 52. It is contended that the Applicant was not an accused in the scheduled offence, which is the very basis for proceeding against a person under PMLA. In the absence of any scheduled offence, the question of generation of proceeds of crime does not arise and, therefore, subsequent laundering thereof cannot even be alleged. The ED has failed to trace any alleged proceeds of crime. Even comprehensive investigations of ED, could not establish any connection between the Applicant and the proceeds of crime. 53. The Applicant has referred to Arnesh Kumar vs. State of Bihar, (2014) 8 SCC 273, wherein it has been observed that whe....
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....bservations made in Anil Babulal Chokhara vs. Enforcement Directorate, Bail Application No. 1581 of 2017. 61. In the end, it is contended that indefinite pre-trial incarceration is disfavoured and it impacts on the defence of the Petitioner. 62. Reliance is placed on Manish Sisodia vs. CBI, 2023 SCC OnLine SC 1393; Prem Prakash vs. Enforcement Directorate, (2024) 9 SCC 787; Sanjay Chandra vs. CBI (2012) 1 SCC 40; Gurbaksh Singh Sibbia, (supra); and Satender Kumar Antil vs. CBI, 2022 SCC OnLine 825. 63. It is further contended that investigation is complete and the Prosecution Complaint has already been filed against the Applicant. Therefore, he cannot be made to languish in custody indefinitely without a trial, as such unwarranted pre-trial custody would outrightly infringe his fundamental right to a speedy trial, as contemplated under Article 21 of the Constitution of India. Reliance is placed on Javed Gulam Nabi Shaikh vs. State of Maharashtra and Another, Criminal Appeal No. 2787/2024 decided on 03.07.2024. 64. It is contended that the entire set of evidence/material is documentary in nature and is already before the Court. There is no likelihood of it being tampered....
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....0.2022 was recorded and the investigations were initiated. During the investigation, statements of various individuals were recorded under Section 50 PMLA; searches were conducted; and bank Statements of various individuals and entities, were scrutinized. The investigation conducted thus far, revealed that there was a huge network of individuals and entities, which were defrauding the gullible individuals of their money and creating shell Companies, by using credentials of innocent and ignorant young individuals. Such Companies had been used to launder the defrauded amounts (Proceeds of Crime), thereby jeopardizing their lives. 71. On the basis of the information and test Statements recorded, it was revealed that the proceeds of crime were generated in the guise of online investment, where the money was transferred from the virtual Accounts of M/s Xindai Technologies Pvt. Ltd. through My ePocket payment gateway, to around 38 Mule Bank Accounts, including those of Ranjan Money Co. Pvt. Ltd. and KDS Forex Private Limited, to get them converted into cash and then sent overseas through hawala. 72. The role of the Petitioner was defined as being the mastermind and ultimate benefic....
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....upesh Arora were also transferring the funds, thus demonstrating the factum of Inter-connected transactions. The accounts in which Xindai were transferring the POC for layering and aggregation of POC, cannot be believed to be genuine and legitimate accounts. For Example, from Xindai the POC were flowing to Account no 980810310000004 and in the same account Analytiq, the entity which is owned and controlled by Bhupesh Arora was also found to be transferring the funds. Similar patterns are adopted by other entities owned and controlled by Bhupesh Arora like Levelnext Ideas Pvt ltd, Faithpay systems Pvt Ltd, URpay Pvt Ltd, in like manner 620 common accounts were found which are placed at Pg. 5-28 of CC. Further beneficial ownership of Bhupesh Arora over entities such as Analytiq, Melanic, Bestpay, Levelnext is also corroborated from the fact that they were operating through same IP address. b. POC travelling from Cashfree to entities owned and controlled by Bhupesh Arora. That POC to tune of Rs 17 crore were flowing from Xindai to Cashfree payment services from where POC to tune of Rs 10 crore was going to Melanic Solution and Rs 12.8 crore were flowing to the Analyt....
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....der Section 70 Cr.P.C. as applicable as per Section 65 of PMLA, were issued on 12.07.2024, after he failed to respond to the summons of the Court. Despite the NBWs, executing the Arrest Warrant proved difficult for many months, because he remained outside India and evaded the arrest. 78. The Applicant filed Crl. Rev. Pet. No. 3/2025 for setting aside of NBWs. He also filed Crl, Appeal No. 1/2025 assailing the order declaring him an FEO by the Court. The High Court of Guwahati allowed the Revision Petitions thereby setting aside NBWs and FEO Orders vide its judgment dated 29.01.2026. 79. Moreover, the Applicant entered India through an informal/non-regulated immigration channel, i.e., the Nepal Route. He had been absconding and was residing in Dubai, where he has a well-off lifestyle and has purchased multiple assets, for which he has failed to provide any explanation. 80. The evidence shows that he, in order to escape the law enforcement agencies, fled to Dubai along with Family and ABVPL Directors. This is corroborated by the statement of Mr. Pankaj Wadhwa. There were multiple non-compliances with summons issued to him under Section 50(2) PMLA. He had failed to appear bef....
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....was stated that Accused had collected personal information of the victim and had used them to convince them to invest into their Projects and had promised that they would invest in various Companies and would pay handsome amount in return. They assured the investors that they would refund the profit amount including principal amount and compelled them to invest. Believing the same, victims/investors transferred the amounts through links. 87. It is submitted that the learned Prosecutor in the predicate case had opposed the Compromise Petition, which was duly recorded in the Order. Furthermore, bare reading of Section 320 Cr.P.C. makes it clear that offence of cheating under Section 420 IPC can only be compounded at the instance of victims who have been cheated. In the present case, merely one person could not have compounded the case on behalf of rest of the victims, who had been cheated. 88. Reliance is placed on B.S. Joshi vs. State of Haryana, (2003) 4 SCC 67, Suraj Singh Gurjar and Anr. vs. State of MP, @ Special Leave Petition (Cr.) No. 2520/2024. It is well settled that FIR can be partially quashed against certain individuals and the same would not amount to the entire c....
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....irectorate of Enforcement, SLP (Crl.) No. 9431 of 2023 (Para 15), Rohit Tandon vs. Directorate of Enforcement, (2018) 11 SCC 46 (Para 31), Satyendar Kumar Jain vs. Directorate of Enforcement, 2024 INSC 217, Amanatullah Khan vs. Directorate of Enforcement, (Para 30-32) Bail Appl. 795/2024. 94. The Applicant was arrested in this case on 11.07.2025 and is in judicial custody for about 06 months. The Supreme Court in the case of Union of India vs. Kanhaiya Prasad, 2025 SCC OnLine SC 306 had held that Section 45 PMLA starting with the non-obstante clause has an overriding effect on the general provisions of the Code of Criminal Procedure in case of conflict between them. Merely because the Prosecution Complaint had been filed and the cognizance was taken by the Court that itself would not be the ground or consideration to release the Respondent on Bail, when the mandatory requirements as contemplated in Section 45 have not been complied with. 95. In the case of Udhav Singh vs. Directorate of Enforcement, 2025 SCC OnLine SC 357, it was held that a short duration of 07 months does not amount to long incarceration so as to justify the grant of Bail de hors satisfaction of Section 45 ....
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.... discrepancy in the amount of proceeds of crime calculated by the ED and the amount mentioned in the Chargesheet. The alleged disproportionate amount is Rs. 1,62,50,294/- as per the FIR, while the ED amount is Rs. 4,81,16,435/-. 102. The Apex Court after making a reference to Section 21(1)(u) and Section 3 of PMLA ultimately rejected the Bail by holding Rs. 4,81,16,435/- as the total POC, as determined by the ED to be valid. It was observed that Section 3 has a wider reach. The offences as defined, captures every process and activity dealing with the proceeds of crime, directly or indirectly and is not limited to the happening of the final act of integration of tainted property in the formal economy to constitute an act of money laundering. 103. Therefore, the argument that the ED is confined to the facts and figures determined by the predicate Agency, is not binding in the light of formidable evidence including material gathered under Section 50 of PMLA to establish that there are larger sums of money involved and the PMLA Complaint should proceed irrespective of the figures mentioned in the predicate agencies' case. 104. Ld. Counsel for the Applicant, Bhupesh Arora, Seni....
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....), Mr. Zoheb Hossain along with Mr. Vivek Gurnani have vehemently opposed the Bail Application. Written Submissions and Compilation of Judgments have also been filed in support of the same. 112. It is submitted that the foundational facts necessary to invoke the statutory presumption under Section 24(b) of PMLA stand duly established in the present case. The three essential ingredients are satisfied: a. Existence of a Scheduled Offence: The scheduled offence arising out of the LOXAM App fraud, is undisputed. b. Existence of POC: The POC has been generated from the scheduled offence involving cheating of investors through the LOXAM App. c. Receipt/Handling of POC by the Applicant: The POC travelled to KDS Forex Pvt. Ltd. and Ranjan Moneycorp Pvt. Ltd. in the form of RTGS transactions, which were subsequently converted into forex and withdrawn in cash. Such cash/forex was allegedly handed over to the Applicant, Bhupesh Arora and his associates. 113. It is submitted that these facts are supported by cogent material including Bank Statements, Payment Gateway Records, Statements of Chartered Accountants and other intermediary persons, as well as Statemen....
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..... Counsel, by way of an Application, has placed on record the subsequent developments arising from Order dated 16.02.2026 o the Ld. Special Judge (PC Act) (CBI) taking on record the Application for brining additional facts related to 24 new FIRs and the addendum incorporating the said FIRs into ECIR/HYZO/46/2022. It is submitted that it is no longer res integral that multiple FIRs can form part of a single PMLA investigation. An ECIR is merely an internal document of ED as held in Vijay Madanlal Choudhary, (supra). 117. Reliance is also placed on Rajinder Singh Chadha vs. Union of India, W.P. (Crl.) 562/2023, wherein this Court upheld the EDs power to incorporate subsequent FIRs into its investigation without the need to register a fresh ECIR. 118. It is also submitted that the Allahabad High Court in the case of Satinder Singh Bhasin vs. State of U.P. and Anr., CRM W.P. 9232/2025 held that ED is entitled to issue addendums to the ECIR, particularly because the investigation is ongoing and proceeds of crime may emerge from multiple transactions. 119. Thus, the present Bail Application is liable to be dismissed. Submissions heard and record perused. 120. The Applicant....
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....he laundering operation. He orchestrated a network of shell entities and proxy directors for placement, layering and integration of illicit funds generated from cyber frauds, betting and gaming applications. Several companies, including M/s Freebie Solutions Pvt. Ltd., M/s Levelnext Ideas Pvt. Ltd., M/s Analytiq Business Ventures Pvt. Ltd., M/s Bestpay Solutions Pvt. Ltd., M/s URPay Solutions Pvt. Ltd., M/s Faithpay Systems Pvt. Ltd., M/s Rewards Mania Pvt. Ltd., M/s Truvinta Solutions Pvt. Ltd., M/s Melanie Solutions Pvt. Ltd., and others, alleged to have been incorporated and operated under his control, albeit in the names of employees, relatives and acquaintances. The Applicant knowingly indulged in activities connected with the POC. 125. It is in the backdrop of these allegations, as set out in the Prosecution Complaint, that the question of the Applicant's entitlement to Bail under Section 45 of PMLA, need to be considered. Parameters for grant of Bail: 126. The grant of Bail in offences under the Prevention of Money Laundering Act, 2002 is governed by the stringent twin conditions prescribed under Section 45 of PMLA, which are: (i) reasonable grounds to beli....
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....Moreover, the said FIR has also been quashed. 136. Secondly, the primary witnesses whose Statements form the edifice of the ED's case, namely, Rohit Vij and Anurag Aggarwal, did not name the Applicant in their initial statements recorded over a period of nearly three years. Anurag Aggarwal attributed a specific role to the Applicant only in his Statement dated 11.03.2025, followed by a materially enhanced version on 07.07.2025, i.e., just prior to the arrest of the Applicant. 137. Rohit Vij, was identified by the ED as the principal operator of the cash/forex conversion mechanism through Ranjan Moneycorp and KDS Forex, but he also does not name the Applicant in any of his Statements recorded under Section 50 of PMLA. Further, the statement of Pankaj Wadhwa, also contains contradictions and inconsistencies. Thus, prima facie there is a material gap in the chain of evidence sought to be attributed to the Applicant. 138. Thirdly, though 90% shareholding of M/s Analytiq Business Ventures Pvt. Ltd. stood in the name of the Applicant, the other two Directors are Vivek Kumar Jha and Akshay Dhawan. However, these two Directors have admittedly not been examined by the ED. The MCA r....
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....btained, directly or indirectly, as a result of criminal activity relating to a scheduled offence that can be regarded as proceeds of crime. The authorities under the 2002 Act cannot resort to action against any person for money laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of criminal activity relating to a scheduled offence already accomplished." 142. From the aforesaid paragraphs, it is evident that any property being derived or obtained directly or indirectly as a result of criminal activity which is a scheduled offence, would be termed as proceeds of crime, under PMLA. In other words, for any property to be termed as proceeds of crime, it must be obtained from the commission of a scheduled offence. 143. In Pavana Dibbur vs. Enforcement Directorate, 2023 SCC OnLine SC 1586, it was explained that on plain reading of Section 3, an offence under this Section can be committed after a scheduled offence is....
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..... Section 66 of PMLA provides for disclosure of information. Section 66 is reproduced as under: "(1) The Director or any other authority specified by him by a general or special order in this behalf may furnish or cause to be furnished to- (i) any officer, authority or body performing any functions under any law relating to imposition of any tax, duty or cess or to dealings in foreign exchange, or prevention of illicit traffic in the narcotic drugs and psychotropic substances under the Narcotic Drugs and Psychotropic Substances Act, 1985 (61 of 1985); or (ii) such other officer, authority or body performing functions under any other law as the Central Government may, if in its opinion it is necessary so to do in the public interest, specify, by notification in the Official Gazette, in this behalf, any information received or obtained by such Director or any other authority, specified by him in the performance of their functions under this Act, as may, in the opinion of the Director or the other authority, so specified by him, be necessary for the purpose of the officer, authority or body specified in clause (i) or clause (ii) to perform his or its functio....
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....of law, then it cannot assume the role of investigating those offences also. It is to inform the appropriate agency, which is empowered by law to investigate into that offence. If that Agency, on the intimation from the ED, commences investigation and registers a complaint, then certainly the ED can investigate into those aspects also, provided there are "proceeds of crime". In case, the investigating agency does not find any case with respect to the aspects pointed out by the ED, then the ED cannot suo motu proceed with the investigation and assume powers. The essential ingredient for the ED to seize jurisdiction is the presence of a predicate offence. It is like a limpet mine attached to a ship. If there is no ship, the limpet cannot work. The ship is the predicate offence and "proceeds of crime". The ED is not a loitering munition or drone to attack at will on any criminal activity." 152. Applying the ratio of the above judgments to the facts of the present case, it is significant to note that ED has already supplied all the relevant material to the predicate Agency, in compliance with Section 66(2) of PMLA. However, despite sharing and communicating all the information with ....