TaxTMI 
TaxTMI 
2026 (8) TMI 799
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....ed by the PS Cyber Crime, Hyderabad under Section 419 and 420 of the Indian Penal Code, 1860 ('IPC') based on a written complaint filed by one Mohd. Ghouse Pasha for the alleged fraud of Rs. 1.16 lakhs by unknown persons running an investment app named 'LOXAM', promising high returns on investment. A chargesheet came to be filed against 15 persons, however, the present applicant was treated as an absconder. Sections 419 and 420 of the IPC, being scheduled offences, an ECIR bearing No. ECIR/HYZO/46/2022 dated 14.10.2022 was recorded and investigation under the provisions of the PMLA began. 3. The prosecution story paints a picture of a huge network of individuals and entities that play a coordinated role to defraud innocent individuals of their hard-earned money, and subsequently launder them to evade the clutches of law. The initial investigation into the affairs of LOXAM revealed that the cheated money was deposited into the account of one M/s Xindai Technologies Pvt. Ltd. ("Xindai"). The said company was revealed to have 29 Virtual Accounts with MyEpocket and 1 physical account with Indus Ind Bank. 4. Xindai is stated to have been started by Mr. Virender Singh on the direct....
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.... applicant. The bank accounts of KDS were opened by the applicant and one Mr. Navneet Kaushik. The applicant is claimed to be the beneficial owner of KDS as well. (B) The Role of the Applicant 9. One Mr. Anurag Aggarwal disclosed that he was approached by Mr. Pankaj Wadhwa to arrange current accounts of money changers who can give the cash in liquid on commission basis for his clients Mr. Varun Arora and Mr. Bhupesh Arora. Mr. Aggarwal approached one Mr. Sahil Bajaj who gave the contact details of two money changer entities i.e., Ranjan Moneycorp and KDS, and introduced him them to the applicant herein and Navneet Kaushik. Since then, Mr. Wadhwa would share the transaction details with Mr. Aggarwal, who in turn would share the same with Mr. Sahil Bajaj, and he sent it to the applicant and Mr. Navneet Kaushik. 10. The applicant and Mr. Kaushik would confirm the transactions via WhatsApp to Mr. Sahil Bajaj, who in turn sent the confirmation to Mr. Aggarwal, through whom, the intimation would reach Mr. Wadhwa. A token number comprising of serial numbers on currency notes would be sent by Mr. Pankaj Wadhwa to Mr. Anurag Aggarwal to deliver the money in cash to them. 11. The....
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....cution survives despite FIR No. 1352/2022 dated 26.07.2022 being quashed/compromised. The principle of the PMLA offence dying with the predicate offence has been captured in Vijay Madanlal Choudhar and Ors. v. Union of India and Ors. (2023) 12 SCC 1., in the following words: "109. Tersely put, it is only such property which is derived or obtained, 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. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of ....
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....icable link between proceeds of crime, predicate/schedule offence and the offence of money-laundering. The rationale underlying the erasing of the PMLA prosecution owing to the predicate offence getting quashed is the effect that such a quashing has on the existence of proceeds of crime. The offence of money-laundering, broadly, entails activity undertaken qua proceeds of crime. Where quashing of a predicate offence, or acquittal of an accused, takes place on merits, and there is a judicial finding of the predicate/scheduled offence having never occurred, a natural consequence of this conclusion is that proceeds of crime could never have been generated. Resultantly, the ED proceedings deserve to get halted. 18. However, where the predicate offence gets quashed on the basis of a compromise/agreement there is no finding rendered on the existence of the proceeds of crime. The proceedings get scuttled before a judicial mind could get applied on the existence of the predicate offence. In such a case, a conclusion, simpliciter, cannot be reached that no proceeds of crime were ever generated. But for this, all PMLA proceedings could get frustrated by clever money launderers settling th....
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....gly, the PMLA proceedings, without any doubt, survive. 22. Even otherwise, a conclusive finding on the tenability of the FIR inclusions undertaken by the ED, at the present stage of bail is not warranted, prima facie, the inclusion seems to be appropriate and bearing a relevant nexus with the larger conspiracy involving the applicant. An objection qua this aspect, however, could be taken by the applicant, at a later stage, during the course of trial. 23. A brief reference may also be made to the Statement of Objects and Reasons for the introduction of the PMLA may be taken note of: "INTRODUCTION Money-laundering poses a serious threat not only to the financial systems of countries, but also to their integrity and sovereignty. To obviate such threats international community has taken some initiatives. It has been felt that to prevent money-laundering and connected activities a comprehensive legislation is urgently needed. To achieve this objective the Prevention of Money-laundering Bill, 1998 was introduced in the Parliament. The Bill was referred to the Standing Committee on Finance, which presented its report on 4th March, 1999 to the Lok Sabha. The Central....
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....nything contained in the Code of Criminal Procedure, 1973 (2 of 1974), no person accused of an offence under this Act shall be released on bail or on his own bond unless" (i) the Public Prosecutor has been given an opportunity to oppose the application for such release; and (ii) where the Public Prosecutor opposes the application, the court is satisfied that there are reasonable grounds for believing that he is not guilty of such offence and that he is not likely to commit any offence while on bail" Provided that a person, who, is under the age of sixteen years, or is a woman or is sick or infirm, or is accused either on his own or along with other co-accused of money-laundering a sum of less than one crore rupees may be released on bail, if the Special Court so directs" 26. Before analysing the contention of the applicant, a brief reference may be made to the rationale underlying the introduction of the twin condition of bail under Section 45 of the PMLA. In this connection, para. 126 of Vijay Madanlal (supra) may be taken note of which reads as under: "126. ...The twin conditions are that there are reasonable grounds for believing that the a....
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....SCC 715., the material portion of which reads as under: "18. It was vehemently argued by the learned Senior Advocate Mr Singhvi, for the appellant Satyendar Jain that there was gross discrepancy in the amount of proceeds of crime calculated by the ED in the prosecution complaint and in the amount with regard to disproportionate assets mentioned by CBI in the charge-sheet filed in the predicate offence. According to him, the amount with regard to disproportionate assets mentioned by CBI is Rs. 1,47,60,497 whereas as per the ED the proceeds of crime is Rs. 4,81,16,435. Even if the accommodation entries amounting to about Rs 4.6 crores are attributed to the appellant Satyendar Kumar Jain through his wife's shareholdings, it would come to only Rs. 59,32,122 which is less than one crore... **** 20. The offence of money-laundering as contemplated in Section 3 PMLA has been elaborately dealt with by the three-Judge Bench in Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 : (2023) 21 ITR-OL 1 : 2022 SCC OnLine SC 929], in which it has been observed that Section 3 has a wider reach. The offence as defined captures every pr....
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....how that they are prima facie guilty of the alleged offences." (Emphasis supplied) Further, reliance may also be placed on the decision of the Division Bench of this Court in Directorate of Enforcement v. M/s. Hi-Tech Mercantile India Pvt. Ltd. and Ors. 2025:DHC:9229-DB., para. 60 and 62 of which reads as under: "60. The finding of the LSJ limiting the jurisdiction of the Directorate strictly to pre-allocation events, i.e. 04.09.2003, falls short of the intention of the PMLA and overlooks the continuing nature of the offence of money laundering recognised under explanation (ii) to Section 3 of the PMLA, which highlights that the said offence persists as long as the proceeds of crime are possessed, used, concealed, or projected as untainted. It is to note that, while the second chargesheet filed by the CBI may have confined itself to events leading upto the allocation, the PMLA is a standalone statute empowering the Directorate to investigate and act upon ancillary events as long as they are connected to the proceeds of crime. The Directorate is not confined to the timeframe or scope set out by the predicate agency. **** 62. The aforesaid view taken ....
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....issued to the applicant under Section 50 of PMLA on 28.02.2025 and 02.04.2025 to appear on 17.03.2025 and 09.04.2025 respectively but he did not comply on the alleged ground of his parent's illness as conveyed over mail. Despite knowing that investigation against him is in progress and summons were being issued under PMLA, the applicant attempted to leave the country with his family on 29.06.2025. It is only owing to a Look Out Circular ("LoC") issued against him by the Hyderabad Zonal office, that he was apprehended at the International Airport Delhi while going to Paris via Dubai. 32. The applicant has attempted to justify the aforesaid conduct by contending that for travelling to Paris, the applicant took permission from the XII ACJM, Hyderabad, which, vide order dated 24.03.2025, allowed the applicant to travel abroad from 26.03.2025 to 30.09.2025 upon executing a Personal Bond of Rs. 2,00,000/- with one surety for the like sum and to file the travel schedule before the Court prior to leaving country. Upon being queried by the Court, Mr. Pahwa, learned senior counsel has also admitted that the applicant did not inform the Hyderabad Court that it had received summons from the....
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....Complaint, that pictorially captures the allegation and role of the applicant, may be taken note of. Flow Of Funds Of POC From Xindai, Skhalita, to KDS Forex & Ranjan Money Corp 39. At the stage of grant of bail a mini-trial is not to be conducted, the material which has come up against a given applicant is to be broadly considered and a probabilistic view is to taken. In this connection, in Vijay Madanlal (supra), the following has been observed: "303. We are in agreement with the observation made by the Court in Ranjitsing Brahmajeetsing Sharma [Ranjitsing Brahmajeetsing Sharma v. State of Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057]. The Court while dealing with the application for grant of bail need not delve deep into the merits of the case and only a view of the court based on available material on record is required. The court will not weigh the evidence to find the guilt of the accused which is, of course, the work of the trial court. The court is only required to place its view based on probability on the basis of reasonable material collected during investigation and the said view will not be taken into consideration by the trial court in recording ....
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....cation made by the learned Assistant Public Prosecutor is therefore granted. The High Court will issue appropriate directions for the recording of the evidence to prove the report of the Mint Master under Section 391 CrPC when the matter goes back to the High Court and is listed for directions. The appeal is therefore allowed. The order of acquittal is set aside. The matter is remitted to the High Court for proceeding further in accordance with law in the light of the above said directions." 42. In YS Jagan Mohan Reddy v. CBI (2013) 7 SCC 439., the Supreme Court noted that economic offences constitute a separate class and a different approach needs to be adopted while considering the issue of grant of bail. The rationale being that such offences, inter alia, involve a huge loss of public funds: "34. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offences having deep-rooted conspiracies and involving huge loss of public funds need to be viewed seriously and considered as grave offences affecting the economy of the country as a whole and thereby posing serious threat to the financial health o....
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....ther there is a genuine case against the accused and that the prosecution will be able to produce prima facie evidence in support of the charge. It is not expected, at this stage, to have the evidence establishing the guilt of the accused beyond reasonable doubt. 25. Economic offences constitute a class apart and need to be visited with a different approach in the matter of bail. The economic offence having deep-rooted conspiracies and involving huge loss of public funds needs to be viewed seriously and considered as a grave offence affecting the economy of the country as a whole and thereby posing serious threat to the financial health of the country." (Emphasis supplied) 45. Further, reliance may also be placed on Satyender Kumar Jain v. ED 2023:DHC:2380., wherein this Court held that where the offence of money-laundering took place through means involving cash, it is nearly impossible to get direct evidence. The material portion of para. 70 of the said decision reads as under: "70. ...Generally in cases of criminal conspiracy, which are hatched in secrecy and executed in dark, it is herculean task to find the direct evidence of such offence. In part....
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....ity, country of origin, or person and the money remittances received; * Periodic transfers made by several people to the same beneficiary or related persons; * Transfers over a short period of time of low amounts that together represent a large sum of money; * Transfers from one or more senders in different countries to a local beneficiary. * Sudden inflow of funds in cash followed by sudden outflow through financial instruments such as drafts and cheques; * Structuring of transactions and/or changing of MR/CE provider for subsequent orders to keep a low profile; and * False information during the identification procedure/lack of co-operation). 63. Many cases involve small value wire transfers, however, given that the total value of funds involved in these cases is quite significant, this could imply the involvement of highly organised criminal groups. However, it is also interesting to note that a number of cases deal with high-value wire transfers. The information gathered highlights the links between money laundering in the money remittance sector and other criminal activities (e.g., fraud, trafficking/smuggling in h....
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....s documents, and even opened an account. We have no connection with this company. It was operated by Mr. Navneet Kaushik, Mr. Rohit Vij, and their associates. Only they can explain the details of this company. We did not receive any benefits from this company. We only learned today that Mr. Navneet Kaushik, Mr. Rohit Vij, and their associates deceitfully made us directors of the company. Question 01: Please tell us about yourself in detail. Answer 01: I, Lakhami Chand, am a resident of Mohalla, Damadpura, New Colony, Sikandra Rao Hathras, Uttar Pradesh. I was born in 1970 in Hathras, Uttar Pradesh. I have never gone to school. I am a daily wage labourer by profession. I have been doing labour work for the last 35 years. I do labour work (lifting bricks, making spices etc.) at my place of residence but whenever there is shortage of work at my place, I come to Delhi in search of work and even after coming here I do labour work (lifting bricks, making spices etc.). My phone number is 9953814436. Question 03: You and Lakhmichand were directors in M/s Ranjan Money Corp Pvt. Ltd. When and how did you form this company, what was your contribution in the running ....
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....onverted through the applicant. He detailed the modus operandi where he forwarded UTR details to the applicant, who confirmed the receipt, after which a token (currency note serial number) was used for the collection of cash at the applicant's office; d. Statement of Mr. Neeraj Kumar dated 04.07.2025 recorded u/s 50 of the PMLA wherein he stated that the applicant was the sole person finalising the rate, quantum, denomination and commission for foreign currency transactions from Ranjan Moneycorp. e. Further ED relied on bank statements showing that funds received in Ranjan Moneycorp and KDS from shell entities were utilised for the purchase of foreign exchange. Further, cash of approximately Rs. 53 crores was withdrawn from Ranjan Moneycorp and Rs. 22.03 crores from KDS. 51. Insofar as the question of actual knowledge of the applicant while operating the scheme is concerned, the dictum of Anoop Bartaria and etc. v. Dy Directorate of Enforcement and and Anr. 2023 SCC OnLine SC 477., may be considered, wherein the Supreme Court held that where the allegation against a person is of actual involvement in activities concerned with proceeds of crime, the question of ....
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....neficially owned and controlled by RohitVij, Mr. Girdhari Lal, the applicant's mamaji was the erstwhile director who was replaced with one employee of Mr Vijay Vij namely Jaswinder and later replaced with one Mr. Mehtab Alam who was not available at his last known address when personal summons were issued to him on 04.08.2025 and 18.08.2025 and inquiries revealed that he was a migrant labourer who has returned to Bihar. (v) Multiple accounts were frozen over a period from February/March2022 due to fraudulent and suspicious transactions received in the account of Ranjan Moneycorp. (vi) In this regard the statement dated 04.07.2025 recorded under section 50 of PMLA of Neeraj Kumar, Director Saphire Forex Pvt Ltd is relevant as this company has undertaken Rs 600 crores worth of transactions of sale of foreign currency to KDS Forex Pvt Ltd and Ranjan Moneycorp Pvt Ltd from 2021 wherein at question no. 11 at RUD-A-27, it was stated that M/s Saphire Forex Pvt Ltd's current bank accounts were frozen/withheld by the Cyber Crime authorities account of the amounts transferred from M/s KDS Forex Pvt Ltd and d M/s Ranjan Moneycorp Pvt Ltd to be fraud amounts. **** ....
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....ell: 7291079088 / 9899430574 / 234809802999) was apprehended on 30.9.2022 and interrogated thoroughly, wherein he confessed that he along with his associate Anurag Agarwal 8802982636, Rohit 8862652067 and Devendra Bajaj, Ph: 9211401530 are used to help the A2: Lec for money exchange and shared the commission among themselves, as such the LW3 arrested the accused A5: Sahil Bajaj on 1.10.2022 at 1330 hours and seized one Samsung Galaxy S22 with SIM number 9994190574, IMEI No. 359819250925220, 351116290522206, white colour from his possession and handed over to the lower court along with articles seized vide Pt. No. 420/2022. xv) Navneet Kaushik Advised Sahil to Hide Rohit's Name: When Sahil Bajaj was arrested by Hyderabad Cyber Crime authorities in September 2022, he discovered that Navneet Kaushik too had been arrested. While in custody, Kaushik advised him not to mention Rohit Vij's name and instead shift responsibility. However, during interrogation, Sahil chose to reveal the truth and named Rohit Vij as the main operator." 53. In Rohit Tandon v. Directorate of Enforcement (2018) 11 SCC 46., a three Judge Bench of the Supreme Court noted that testimonies given ....