No Automatic Anticipatory Bail Merely Because Accused Not Earlier Arrested: Delhi HC On Custodial Interrogation in Crypto Laundering Case Under PMLA
Says twin conditions under Section 45 PMLA not met; custodial interrogation crucial in ₹100+ crore cyber fraud, money laundering web
Justice Girish Kathpalia, Delhi High Court
The Delhi High Court has refused anticipatory bail to two Chartered Accountants, accused in a money-laundering operation of over 100 crore allegedly linked to large-scale cyber frauds. The Court held that the Enforcement Directorate’s (ED) earlier decision to not arrest the accused does not bar custodial interrogation now, especially in view of changed circumstances such as fresh complaints, alleged destruction of evidence, assault on investigators, bribery allegations, and the need to probe the role of bank officials.
The bench further held that anticipatory bail under PMLA is not governed by ordinary bail standards alone, the statutory twin conditions under Section 45 of the Prevention of Money Laundering Act, 2002 (PMLA) act as a higher legal barrier.
Justice Girish Kathpalia thus observed, “Merely because at initial stages when the accused/applicants were not under any judicial protection against arrest the DoE opted not to arrest them, does not mean that the need now expressed by DoE to conduct custodial interrogation is unjustified. As described above, now circumstances have changed, in the sense that fresh complaints have been pouring in; that the accused/applicants allegedly assaulted the investigating officers; that the accused/applicants have been allegedly found bribing the local police to settle cyber fraud complaints; that the accused/applicants have allegedly destroyed the electronic evidence; and that role of the bank officials also has to be unearthed. In the backdrop of these changed circumstances, the DoE cannot be deprived of an opportunity to conduct custodial interrogation”.
The bench further opined, “Going a step deeper, merely because the investigator does not want to arrest the accused, it cannot be said that the accused is entitled to anticipatory bail. Whether or not to arrest, is in the exclusive domain of the investigator. When it comes to deciding the grant or denial of anticipatory bail, the settled parameters have to operate, which in cases under PMLA would include the twin conditions”.
Senior Advocate Manu Sharma appeared for the petitioner and, Advocate Anurag Jain appeared for the respondent.
In the present matter, CBI registered predicate offences involving cheating and cyber frauds, where innocent individuals were lured through fake investment and part-time job schemes. According to the ED, the proceeds of crime were routed through thousands of Indian bank accounts and layered using mule accounts before being transferred to the UAE-based PYYPL payment platform and converted into cryptocurrency or withdrawn overseas, mainly in Dubai.
The prosecution complaint described an organised syndicate with foreign links, operating through Telegram and other online channels, with Indian operatives arranging bank accounts, SIM cards, debit cards and digital credentials to facilitate the flow of funds.
The ED alleged that the applicants were part of the so-called “Bijwasan Group”, controlling numerous entities and bank accounts used to upload crores of rupees to PYYPL wallets. Analysis of hundreds of accounts allegedly revealed common mobile numbers and email IDs, with tens of crores transacted through accounts linked to the applicants.
It was further claimed that electronic evidence had been wiped, investigating officers were assaulted, and attempts were made to influence local police in connected cheating complaints. Investigation was stated to be ongoing, with fresh cyber fraud complaints continuing to surface.
Rejecting the defence argument that the case merely involved cryptocurrency dealings, the Court said the matter reflected a “vast intricate mesh” of fraudulent extraction and cross-border laundering of victims’ hard-earned money.
The bench further emphasised that PMLA offences form a distinct class of serious economic crimes with transnational impact, requiring a different approach to bail.
Finding no reasonable grounds at this stage to believe that the accused were not guilty, and noting the ED’s need for custodial interrogation to unravel further layers of the laundering network, the High Court dismissed both anticipatory bail applications.
Cause Title: Bhaskar Yadav v. Directorate Of Enforcement [Neutral Citation: 2026:DHC:813]
Appearances:
Petitioner: Manu Sharma, Senior Advocate, Samarth Krishan Luthra, Arjun Kakkar and Manoviraj Singh, Advocates.
Respondent: Anurag Jain, Advocate.