Delhi High Court Raps Indian Express For “Deplorable” Reporting On Spurious Cancer Drug Racket Case, Grants Bail To Accused

The Court was hearing a batch of bail applications under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002, arising out of an Enforcement Case Information Report registered in connection with alleged proceeds of crime generated through the sale of spurious cancer drugs.

A Bench of Justice Girish Kathpalia, before deciding the bail applications, took a serious view of a series of articles that were published on the front page of the Indian Express on four consecutive days, and observed: “the implications of such publications are profoundly alarming, … If the said series of articles published for four consecutive days when day to day arguments were being heard, was engineered directly or indirectly at the instance of any arm of the State, with a view to influence, overawe or subtly condition the judicial mind, the same would strike at the very roots of the Rule of Law, … Such conduct would be not just deplorable, but also amount to grave and impermissible assault on the independence of the judiciary and sanctity of the adjudicatory process, … The spectre of proceedings being sought to be influenced through media use of such nature is not just unacceptable but deeply disquieting and must be unequivocally deprecated”.

Further, while granting bail to the accused in the spurious cancer drug racket matter, the Bench remarked that “the gravity of the offence charged against the accused, which is a relevant factor while considering grant of bail, does not mean mere allegations de hors the supportive evidence/material collected by the investigator”.

Madhav Khurana, Senior Advocate, appeared for the applicants; Arkaj Kumar, Standing Counsel, appeared for the Directorate of Enforcement.

Background

The prosecution case arose from information received by the Crime Branch, Delhi Police, regarding a syndicate allegedly engaged in the manufacture and sale of spurious anti-cancer drugs. Raids conducted at premises in Delhi led to the seizure of vials labelled as cancer drugs, allegedly being refilled and relabelled without a licence.

An FIR was registered under the provisions of the Indian Penal Code, following which the Directorate of Enforcement initiated proceedings under the Prevention of Money Laundering Act, alleging the generation of proceeds of crime through the sale of such drugs.

Multiple accused persons were arrested, and prosecution complaints were filed alleging that they were part of a network involved in procuring empty vials, refilling them with other substances, and selling them as genuine anti-cancer medicines.

While some of the accused had already been granted bail in the predicate offence, others were either not charge-sheeted or were in prolonged custody under the PMLA proceedings.

Court’s Observation

At the outset, the Court addressed the issue of media publications during the course of the hearing. It noted that a series of articles published over four consecutive days appeared to go beyond mere reportage and disclosed material, including alleged WhatsApp chats, without redaction.

The Court recorded that “those articles… transgressed all permissible bounds by purporting to anticipate and answer queries which were raised by this court,” and observed that such timing and content raised serious concerns.

While refraining from attributing culpability in the absence of material, the Court cautioned that if such publications were engineered to influence the judicial process, they would strike at the very foundation of the rule of law.

Turning to the merits of the case, the Court analysed the statutory framework governing bail under the PMLA, particularly the twin conditions under Section 45, and the requirement of establishing foundational facts before invoking the presumption under Section 24.

The Court emphasised that “the existence of proceeds of crime is… a foundational fact, to be established by the prosecution,” and that the burden shifts to the accused only after such foundational facts are prima facie demonstrated.

On evaluation of the material, the Court found significant gaps in the investigation. It noted that the Enforcement Directorate had largely relied upon statements recorded under Section 50 PMLA, which were made while the accused were in custody.

Relying on precedents including Prem Prakash v. Union of India (2024), the Court held that such statements, being self-incriminatory and recorded in custody, could not be treated as voluntary and were inadmissible.

The Court observed that “such self-incriminating statements… cannot be considered voluntary statements and must be discarded,” thereby weakening the prosecution's case.

The Court also examined the WhatsApp chats relied upon by the prosecution and held that the same appeared to be ordinary business communications and did not, by themselves, establish involvement in money laundering.

A critical aspect highlighted by the Court was the absence of an investigation into foundational elements of the alleged offence. It noted that no inquiry had been conducted into the source of empty vials, the role of medical professionals, or the end users of the alleged spurious drugs.

The Court further observed that “the genesis of the alleged offence has not seen the light of day till date,” indicating that the investigation had not established the core elements linking the accused to proceeds of crime.

On the allegation of spurious drugs, the Court noted that forensic analysis revealed that several of the seized vials contained genuine drugs, and only a few were found to be spurious.

It held that in such circumstances, “one should delve deeper as to whether there is any credible material to establish such allegation,” cautioning against reliance on broad allegations without supporting evidence.

The Court also took note of the fact that some accused were not even charge-sheeted in the predicate offence, while others had already been granted bail therein.

Further, the Court observed that the individual amounts allegedly involved were relatively small and that prolonged incarceration without completion of the investigation would be unjustified.

It remarked that “merely because a person accused… is unable to establish the source of his money, it cannot be presumed that the money is tainted,” reiterating that presumption cannot substitute proof.

The Court also noted selective arrest by the investigating agency and held that such factors were relevant while considering deprivation of liberty.

Conclusion

The Court held that the prosecution had failed to establish foundational facts necessary to invoke the rigours of the PMLA, and that continued incarceration of the accused was not justified.

Accordingly, the bail applications were allowed, and the accused were directed to be released on bail subject to conditions.

The Court also issued a strong caution against media reporting that may interfere with judicial proceedings, observing that such conduct, if intended to influence the Court, would be impermissible and must be deprecated.

Cause Title: Pravez Khan v. Directorate of Enforcement & Connected Matters (Neutral Citation: 2026:DHC:3773)

Appearances

Petitioners: Madhav Khurana, Senior Advocate; Advocates Rohan Wadhwa, Arun Kanwa, Amit Badsera, Sagar Suri, Vittal B., Varun Rawat, Lakshay Sahrawat, Alok Kumar; Ankit Verma, Arvind Mishra, Ved Prakash Verma, D. Kumar, Sachin Verma; Sanjeevi Seshadri; Nishant Tyagi; Arup Sinha, Saquib Mukhtar, Arham Tanvir, Shivam Srivastva

Respondent: Arkaj Kumar, Standing Counsel; Advocates Aakarsh Mishra, Karsh Sarosh Rebelo, Bhavna Gandhi

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