Isabella Mariam

The High Court of Delhi Single Bench of Justice Girish Kathpalia has dismissed two applications seeking anticipatory bail in a money-laundering case investigated by the Enforcement Directorate, arising from alleged cyber-fraud proceeds routed through multiple mule accounts and then moved via an overseas payment platform for cash withdrawals abroad and cryptocurrency purchases. The Court said that bail adjudication under the PMLA requires a careful balance between the eventual outcome at trial and an interim order on liberty, and that at the bail stage it is sufficient to assess a prima facie case on broad probabilities, not to conduct a granular merits inquiry. Justice Kathpalia added that the Court need not record a positive finding of innocence while applying the statutory threshold.

According to the prosecution complaint, the alleged modus involved duping victims through online platforms, routing funds through multiple mule bank accounts, and then layering the proceeds through overseas withdrawals and an overseas fintech payment platform, including for purchase of cryptocurrency. Searches under the PMLA were conducted at multiple premises; cash recoveries were recorded from certain locations, mobile-phone data was sent for forensic analysis, and statements were recorded under the PMLA.

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The accused/applicants contended that the matter was projected as cryptocurrency dealing, questioned clarity on the source and attribution of funds, asserted a comparatively lesser role, and relied on their joining investigation and on the submission that the twin conditions under the PMLA have been diluted in recent judicial precedents. The Directorate of Enforcement opposed the relief, invoking the twin conditions, seeking custodial interrogation, and referring to alleged destruction of devices, assault on officials, opening of multiple entities, and other material placed on record.

The Court stated: “While considering such applications, the court is not expected to delve deep into merits of the allegation by microscopic analysis of the material collected by the investigator; the court has to satisfy itself only as regards existence of prima facie case, based on broad probabilities discernible from the material collected by the investigator; and the question has to be as to whether on the basis of such material, there are reasonable grounds for believing that the accused is not guilty of the offence alleged.”

The Court added: “The court is also to satisfy itself as regards any likelihood of the accused committing any offence while on bail; and this assessment can be based on the antecedents and propensities of the accused, as well as nature and the manner in which he is alleged to have committed the offence under PMLA.”

The Court recorded: “To add a piece of caution, the court is not required to return a positive finding that the accused did not commit the alleged offence. A delicate balance has to be maintained between the final judgment of acquittal or conviction and an order granting or denying bail.”

On the argument regarding dilution of the twin conditions, the Court recorded: “But this view flowing from the Supreme Court cannot be overstretched in the name of dilution of the twin conditions to the extent of making the twin conditions nugatory.” The Court also stated: “Article 21 of the Constitution of India cannot be read in a manner that completely blocks custodial interrogation.”

Referring to Supreme Court authority, the Court quoted: “Once the prayer for anticipatory bail is made in connection with offence under PMLA, the underlying principles and rigors of Section 45 PMLA must get triggered although the application is under Section 438 of the Code of Criminal Procedure.”

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On the factual matrix, the Court stated: “It is not a case of mere dealing in cryptocurrency, which per se is not a crime in this country and liability of the accused persons is confined to paying tax on the crypto transactions. Fresh complaints of cheating acts connected with the syndicate, of which the accused/applicants are significant part, continue to pour in.”

The Court directed: “Therefore, both these anticipatory bail applications are dismissed.”

Advocates Representing the Parties

For the Petitioners: Mr. Manu Sharma, Senior Advocate with Mr. Samarth Krishan Luthra, Mr. Arjun Kakkar and Mr. Manoviraj Singh, Advocates; Mr. Manu Sharma, Senior Advocate with Mr. Abhir Datt, Mr. Debayan Gangopadhyay, Mr. Arjun Kakkar and Ms. Varnika Singh, Advocates.

For the Respondents: Mr. Anurag Jain, Advocate for ED; Mr. Vivek Gurnani, Panel Counsel with Mr. Kanishk Maurya and Mr. Satyam Prakash, Advocates.

Case Title: Bhaskar Yadav versus Directorate of Enforcement; Ashok Kumar Sharma versus Directorate of Enforcement

Case Number: BAIL APPLN. 281/2025; BAIL APPLN. 330/2025

Neutral Citation:2026:DHC:813

Bench: Justice Girish Kathpalia