Justice Purushaindra Kumar Kaurav, Delhi High Court
Quashing Of Predicate Offence On Basis Of Compromise Does Not Extinguish PMLA Proceedings: Delhi High Court Denies Bail To Accused In ₹766 Crore Money Laundering Case
|The Bench held that compromises cannot shield "clever money launderers", and highlighted coerced withdrawal of complaint in ₹766 Cr scam.
The Delhi High Court has held that the quashing or compromising of a predicate offence based on a settlement does not automatically wipe out proceedings under the Prevention of Money Laundering Act (PMLA), 2002, particularly where the settlement lacks bona fides or involves coercion.
Dismissing the bail application of Rohit Vij in connection with a multi-crore investment app scam involving foreign nationals, the Bench said that the money laundering investigations operate on a broader plane than individual complainant grievances and cannot be scuttled by engineered compromises.
A Single Judge Bench of Justice Purushaindra Kumar Kaurav observed, “…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 their cases with the complainants in the original predicate offence. An instance of such notoriety, prima facie, seems to have emerged in the instant case as well”.
Senior Advocate Vikas Pahwa appeared for the petitioner and Senior Advocate Zoheb Hossain appeared for the respondent.
The case stems from a complaint filed by Mohd. Ghouse Pasha regarding a ₹1.16 lakh fraud perpetrated through an investment app named 'LOXAM'. Investigation by the Enforcement Directorate (ED) uncovered a multi-crore international money-laundering network operating in tandem with Chinese and Taiwanese nationals.
The crime proceeds were routed through various shell entities into two forex firms, M/s Ranjan Moneycorp Pvt. Ltd. and KDS Forex Pvt. Ltd., which were beneficially owned and controlled by the applicant, Rohit Vij, using daily wage labourers as dummy directors.
Over ₹766 crore was routed through these accounts, where funds were converted into foreign currency and cash, and subsequently transferred out of India via hawala channels and cryptocurrency. Vij was later apprehended at the Delhi International Airport attempting to flee to Paris while suppressing ED summons from the court.
Now, considering the facts and circumstances, the Court clarified that while a merit-based acquittal/quashing establishes that no crime occurred (and thus no proceeds of crime were generated), a compromise-based quashing scuttles proceedings before a judicial finding on the crime can be made. Allowing PMLA cases to die upon settlement would permit "clever money launderers" to frustrate the law by settling with individual victims.
-Coerced Withdrawal of Predicate FIR: The Enforcement Directorate (ED) placed on record evidence showing that the original complainant (Mohd. Ghouse Pasha, who lost ₹1.16 lakh in the 'LOXAM' app fraud) was coerced and threatened into withdrawing his FIR in Telangana.
-Scope Beyond Predicate Offence: The Court noted that ED had added 24 additional FIRs to the subject ECIR via an addendum. It held that ED’s plane of investigation is not restricted to the initial victim's loss but extends to the entire network of proceeds generated directly or indirectly.
-Denial of Parity: Vij claimed parity with co-accused Bhupesh Arora, who was granted bail. Rejecting this, the Court noted that Vij was the "principal mastermind" operating the cash and forex conversion machinery through shell firms (M/s Ranjan Moneycorp Pvt. Ltd. and KDS Forex Pvt. Ltd.) using dummy directors who were daily wage earners.
-Flight Risk & Suppression: Vij was apprehended by ED at Delhi Airport while attempting to flee to Paris via Dubai. The Court noted he had suppressed the receipt of ED summons from the Hyderabad trial court while obtaining travel permission.
“Thus, considering the entirety of facts and circumstances of the case, a formidable case has been made out against the applicant herein. This Court on considering the conspectus of material brought against the applicant, its own conduct of non-disclosure before the Hyderabad Court, as also the cloud regarding its attempt to leave the country, is not satisfied that there are reasonable grounds for believing that the applicant is not guilty of the offence of money-laundering and that he is not likely to commit any offence while on bail. The requirements of Section 45 of the PMLA for the grant of bail, thus, have not been satisfied. Resultantly, the present application deserves to be rejected”, the Bench said.
Cause Title: Rohit Vij v. Directorate Of Enforcement (Neutral Citation: 2026:DHC:6498)
Appearances:
Petitioner: Vikas Pahwa, Sr. Adv., Shadman Ahmed Siddiqui, Ankit Batra, Kunal Sheoran, Anushka Srivastava, Akshara Pareek, Anuradha, Muhammed Razik, Aamani Golay, Shreya Chauhan and Vaibhav Prasad Singh, Advocates.
Respondent: Zoheb Hossain, Sr. Adv., Vivek Gurnani, Panel Counsel, Pranjal Tripathi, Kanishk Maurya, Advocates.