The Delhi High Court dismissed a regular bail application filed by the former Chief Financial Officer of Reliance Power Limited in connection with a money laundering case arising from a forged bank guarantee scam in a Solar Energy Corporation of India Limited (SECI) tender.

It was observed that given the gravity of the allegations and the extensive material collected by the Enforcement Directorate—including Section 50 PMLA statements, incriminating WhatsApp logs, and forged State Bank of India endorsements—there were no reasonable grounds to believe the applicant was innocent.

The vacation bench of Justice Madhu Jain observed, "Having regard to the nature of the allegations and the material relied upon by the Directorate of Enforcement, including statements recorded under Section 50 of the PMLA, documentary material and electronic communications collected during investigation, this Court is unable to record satisfaction that there are reasonable grounds for believing that the Applicant is not guilty of the offence alleged. The twin conditions prescribed under Section 45 of the PMLA are, therefore, not satisfied at this stage."


Senior Advocate N Hariharan appeared for the Applicant, while Advocate Zoheb Hossain appeared for the Enforcement Directorate.

Brief Facts of the Case

The Applicant, functioning as the Chief Financial Officer (CFO) of Reliance Power Limited (RPL) and an authorised signatory of its subsidiary, Reliance NU BESS Limited (formerly Maharashtra Energy Generation Limited), was arrayed as an accused in a supplementary prosecution complaint under the Prevention of Money Laundering Act (PMLA).

The Solar Energy Corporation of India Limited (SECI) floated a mega-tender for setting up a Battery Energy Storage System project, which mandated the submission of a substantial Bank Guarantee (BG). To secure this arrangement, RPL entered into a Cooperation Agreement and a Supplementary Agreement with a private entity, M/s Biswal Tradelink Private Limited (BTPL), for facilitating the necessary bank guarantees against an agreed commission.

Subsequently, a bank guarantee purportedly issued by a foreign investment bank in Malaysia was submitted to SECI. However, SECI rejected it on the ground that the issuing entity was not an RBI-recognised Scheduled Commercial Bank and directed the furnishing of a valid replacement. Following this, the co-accused persons allegedly arranged a forged endorsement on the letterhead of the State Bank of India (SBI) in connection with another bank guarantee purportedly issued by a foreign bank based in the Philippines. SECI served a Show Cause Notice indicating that the SBI endorsement was fake.

Though the Applicant subsequently lodged an initial complaint against BTPL which culminated in a predicate First Information Report (FIR) under the Bharatiya Nyaya Sanhita (BNS), the Directorate of Enforcement (ED) registered an Enforcement Case Information Report (ECIR) on the basis of the scheduled offences. The prosecution alleged that the funds routed to BTPL constituted the "proceeds of crime" and that the Applicant was actively involved in the conspiracy. The Applicant was subsequently arrested by the central agency.

Contentions of the Parties

The Applicant submitted that he suffered prolonged incarceration, the trial was at a pre-cognizance stage with numerous witnesses and co-accused, and its conclusion was nowhere in sight. It was contended that the Applicant himself initiated the criminal law machinery by lodging the initial police complaint against the main fraudsters, making him a victim of the fraud rather than a beneficiary. It was submitted that no proceeds of crime accrued to the Applicant or his company, the tender was eventually cancelled without any financial gain, and the company immediately replaced the disputed guarantees with a valid one from a scheduled commercial bank upon discovering the forgery.

The Respondent (ED) countered that the Applicant was not a mere passive corporate officer but was actively involved in executing the agreements, modifying commission rates, and executing correspondence with the tainted agency. The agency relied upon statements recorded under Section 50 of the PMLA alongside incriminating WhatsApp communications, which allegedly showed the Applicant suggesting modifications to the foreign bank's particulars and instructing the creation of the documents. It was argued that the economic offence involved massive public tender fraud monitored under the directions of the Supreme Court, and the Applicant failed to satisfy the stringent twin conditions for bail prescribed under Section 45 of the PMLA.

Observations of the Court

The High Court observed that at the stage of considering a regular bail application under the special statute, it was not expected to conduct a mini-trial, record conclusive findings on disputed facts, or exhaustively appreciate the evidence.

The Court noted that the critical defences raised by the Applicant—including his lack of knowledge regarding the forgery, his role as the informant, and the non-accrual of criminal proceeds—were matter-of-fact issues that required absolute validation through a formal trial.

The Court observed that the statutory material brought on record by the investigating agency, particularly the Section 50 statements and the recovered electronic data trail, could not be brushed aside summarily as they disclosed a prima facie case.

"The record further indicates that after SECI raised objections regarding the endorsements and confirmations furnished in support of the Bank Guarantees, additional steps were allegedly taken to obtain fresh endorsements and confirmations. The Directorate of Enforcement relies upon this circumstance to contend that the efforts did not cease with the submission of the Bank Guarantee, and that further steps were taken even after objections had been raised regarding the genuineness of the supporting documents. The relevance and evidentiary weight of such material will have to be examined during trial, however, it cannot be entirely disregarded at the stage of considering bail", the Court said.

The Court concluded that it was unable to form a judicial satisfaction that there were reasonable grounds to believe the Applicant was not guilty of the alleged money laundering offences. Consequently, the Court held that the mandatory twin conditions for the grant of bail stood unsatisfied and dismissed the application.

Cause Title: Ashok Kumar Pal v. Directorate of Enforcement [Neutral Citation: 2026:DHC:5099]

Appearances:

Applicant: Senior Advocate N Hariharan, Advocates Varun Chandiok, Alok Kumar, Sidharth Yadav and Arpit Mahendru

Respondent: Advocates Zoheb Hossain, Vivek Gurnani, Pranjal Tripathi, Kanishk Maurya and Tanvi Jain

Click here to read/download the Order

Tags: