Delhi High Court Dismisses Petitions Challenging ED’s Provisional Attachment in Rs. 6,000-Crore Forex Laundering Case

The Delhi High Court has dismissed a batch of petitions filed by several accused individuals, including Sanjay Aggarwal, Chandan Bhatia, and Kamal Kalra, who had challenged the Enforcement Directorate’s (ED) provisional attachment orders issued under the Prevention of Money Laundering Act (PMLA) in connection with the alleged ₹6,000-crore foreign exchange remittance scam unearthed at Bank of Baroda in 2015. The Bench of Justice Anil Kshetrapal and Justice Harish Vaidyanathan Shankar upheld the validity of ED’s action, observing that the petitioners had failed to establish any legal bar against parallel investigations by ED, CBI, and other agencies. The petitions also challenged the show-cause notice, the original complaint filed before the Adjudicating Authority, and the attachment order issued in February 2015. According to case records, the matter began when a Deputy General Manager of Bank of Baroda filed a complaint in 2015 alleging serious fraud in foreign exchange remittances, involving multiple shell companies. The transactions—spread across 59 firms and unknown individuals—were estimated at approximately ₹6,000 crore. The CBI registered an FIR for cheating, conspiracy (Sections 420, 120B IPC), and offences under the Prevention of Corruption Act. ED simultaneously registered an ECIR (Enforcement Case Information Report) to investigate money-laundering aspects under PMLA. ED alleged that the accused, in collusion with importers and exporters, created fake shell companies, acquired Import Export Codes (IECs) through minimal documentation, opened bank accounts, and used them to send large advance remittances abroad on the basis of fraudulent pro forma invoices. Investigators claimed that the funds were then diverted to companies controlled by facilitators in Dubai and Hong Kong, and later routed back to India through over-invoicing and under-invoicing schemes—thus creating a façade of legitimate trade to launder illicit cash. The accused argued that once the Central Government handed over the investigation of the corporate entities to the Serious Fraud Investigation Office (SFIO) under Section 212 of the Companies Act, the CBI and ED had no authority to continue parallel investigations. Section 212(2) of the Companies Act bars other agencies from continuing investigations once SFIO takes over. No chargesheet (Section 173 CrPC) had been filed against them, thus ED could not issue a provisional attachment order. The attachment order lacked a “reason to believe” as required under Section 5(1) of PMLA. They relied on a Delhi HC precedent (Ashish Bhalla v. State) and argued that corporate offences under Section 447 were added to PMLA only in 2018—three years after the FIR. ED countered that PMLA is an independent statute; SFIO’s role under the Companies Act does not bar ED from probing offences under PMLA. Section 212 prohibits other agencies only from probing offences under the Companies Act, not IPC, PCA, or PMLA offences. Parallel investigations by multiple agencies are legally permissible and even contemplated. The attachment was later confirmed by the Adjudicating Authority, and the petitioners already appealed before the PMLA Appellate Tribunal; hence, the writ petitions were infructuous. The “reason to believe” was fully recorded and backed by seized records, statements under Section 50 PMLA, digital evidence, and remittance trails. The Court found that Section 212(2) of the Companies Act bars parallel probes only for Companies Act offences, not for PMLA, IPC, or PCA offences. The Bench emphasized PMLA is a standalone code, with its own authorities and mechanisms. Financial and criminal violations can be probed by multiple agencies if offences fall under different statutes. Relying on recent precedents—including its own judgment in Hi-Tech Merchantile (2025) and the Supreme Court’s ruling in Vijay Madanlal Choudhary—the Court held that PAO can be issued even before a chargesheet is filed, provided there are adequate reasons to believe proceeds of crime exist. The Court noted that ED relied on CBI’s FIR, ECIR, seized documents and digital evidence, statements of witnesses and suspects, and remittance details showing the petitioner made advance remittances of up to ₹450 crore between January and July 2015. The Bench said the materials provided a rational nexus to justify the attachment and showed it was not based on “mere suspicion.” Another key factor was that the petitioners had already appealed the confirmation order under Section 26 PMLA, making High Court intervention premature. The High Court dismissed all petitions, holding that the ED’s provisional attachment was valid. The petitioners should pursue their remedy before the PMLA Appellate Tribunal. The Court clarified that its observations were confined to the writ proceedings and would not affect decisions in other forums. Case Details Case Title: Sanjay Aggarwal Versus Union Of India & Ors Case No.: W.P.(C) 2819/2016 & CM APPL. 11885/2016 Date: 27.11.2025 Counsel For Petitioner: Naveen Malhotra Counsel For Respondent: Anupam S. Sharma, Special Counsel Click Here To Read Order Read More: PMLA | Accused Appearing on Summons Can’t Be Sent to Custody: Tripura High Court

Delhi High Court Dismisses Petitions Challenging ED’s Provisional Attachment in Rs. 6,000-Crore Forex Laundering Case

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