Lovee Narula vs Directorate Of Enforcement on 28 January, 2025

January 30, 2025

Delhi High Court

Lovee Narula vs Directorate Of Enforcement on 28 January, 2025

1. The instant bail application has been filed on behalf of the applicant
under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023
(hereinafter “BNSS”) and/or Section 439 of the Code of Criminal Procedure,
1973 (hereinafter “CrPC“) read with Section 45 of the Prevention of Money
Laundering Act, 2002 (hereinafter “PMLA”) seeking grant of regular bail in
ECIR/DLZO-II/03/2024 dated 22nd April, 2024 registered under Sections 3
and 4 of the PMLA, arising out of FIR No. 59/2024 dated 12 th March, 2024,

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registered at Police Station – Crime Branch, Delhi for offences punishable
under Sections 274, 275, 276, 420, 468, 471 read with 120B and 34 of the
Indian Penal Code, 1860 (hereinafter “IPC“).

2. The brief facts that led to the filing of the instant application are that
on 12th March, 2024, FIR No. 59/2024 was registered at Police Station –
Crime Branch, Delhi under Sections 274, 275, 276, 420, 468, 471 read with
120B of the IPC, based on a complaint by SI Gulab Singh. The complaint
alleged the involvement of several accused persons in the procurement,
manufacturing and sale of spurious anti-cancer medicines.

3. In the said FIR, it has been alleged that the primary accused, namely
Viphil Jain and Suraj Shat, in collusion with their several associates, were
engaged in the illegal procurement of empty vials and raw materials of anti-
cancer drugs such as Keytruda and Opdyta. These counterfeit drugs were
allegedly manufactured and distributed in the market to unsuspecting cancer
patients.

4. Pursuant to the information received, the police formed six teams to
conduct simultaneous raids across Delhi-NCR on 11th March, 2024. During
the raid at Flat No. 1101, Block-2, Eleventh Floor, CSP Units, DLF Capital
Greens, Moti Nagar, New Delhi, the accused persons were allegedly caught
in the act of filling empty vials with unauthorized substances and packaging
them using specialized machinery. The police seized a substantial quantity
of raw materials, counterfeit vials, packaging equipment etc.

5. It is stated that the applicant herein was allegedly in contact with the
primary accused since the year 2020 and is accused of purchasing spurious

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anti-cancer injections from the co-accused Neeraj Chauhan without proper
billing and documentation. It is further alleged that the applicant knowingly
facilitated the sale of these counterfeit drugs, generating proceeds of crime
amounting to Rs. 7,45,000/- which were allegedly deposited in various bank
accounts.

6. Based on the FIR, the Directorate of Enforcement (hereinafter “ED”)
initiated ECIR/DLZO-II/03/2024 dated 16th March, 2024 under Sections 3
and 4 of the PMLA. The applicant was initially included as a witness in the
investigation, however, following further investigation, he was named as
accused No. 9 in the first supplementary prosecution complaint dated 20th
July, 2024 filed before the learned Special Judge under the allegations of
money laundering.

7. Thereafter, the applicant was arrested by the ED on 22nd May, 2024
and remanded to custody. In the meanwhile, the applicant applied for interim
bail before the learned Special Judge citing the ailing health of his father,
however, the said interim bail application was rejected. Subsequently, the
applicant applied for interim bail before this Court which was granted on
12th September, 2024. Following the same, the learned Special Judge took
cognizance of the aforementioned ECIR vide order dated 21 st September,
2024.

8. Pursuant to the above, the applicant filed a regular bail application
before the learned Special Judge which was dismissed vide order dated 15th
October, 2024. Hence, the present bail application.

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9. Mr. Siddharth Aggarwal, learned senior counsel appearing on behalf
of the applicant submitted that the applicant herein is entitled to be released
on regular bail as the quantum of proceeds of crime attributed to him is Rs.
7,45,000/- which is significantly below the threshold limit of Rs. 1 Crore as
prescribed under the proviso to Section 45 of the PMLA. Consequently, the
rigors of the twin conditions under the main provision of Section 45 of the
PMLA are not applicable and the applicant is entitled to bail under the
relaxed conditions laid down in the proviso. He has placed his reliance on
judgements titled Amit Katyal v. Union of India, 2024 SCC OnLine Del
1909, Rajeev Sharma v. Enforcement Directorate, (2022) 1 HCC (Del) 66
and Sidhique Kappan v. Directorate of Enforcement, 2022 SCC OnLine
All 898.

10. It is submitted that the applicant had no knowledge or intent to
commit the alleged offence and is nowhere implicated in the commission of
the scheduled offence under FIR No. 59/2024. The applicant was initially
named as a prosecution witness, and his name appears at Serial No. 4 in the
list of witnesses in the charge sheet. This clearly indicates that he was not
considered an accused in the scheduled offence and had no direct role in its
commission. It is further submitted that the Hon‟ble Supreme Court in Vijay
Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 has held that at
the stage of bail under PMLA, the primary consideration is whether the
accused possessed the requisite mens rea, and the Court is not required to
record a positive finding of guilt.

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11. It is submitted that the prosecution‟s case against the applicant is
entirely based on the statements of the co-accused persons recorded under
Section 50 of the PMLA post their arrest. These statements are inadmissible
in evidence, being obtained under coercive custody and hit by Article 20(2)
of the Constitution of India, as affirmed by the Hon‟ble Supreme Court in
Pavana Dibbur v. Directorate of Enforcement, 2023 SCC OnLine SC
1586. Further, there exists no independent evidence to corroborate these
statements, and as such, the prosecution cannot rely solely on these
statements to indicate the applicant‟s alleged role in the offence.

12. It is submitted that any purchase of anti-cancer drugs, if made, was
under a bonafide belief that they were genuine and procured through
legitimate banking channels. The applicant paid Rs. 1.20 Lakhs per vial,
which is indicative of a legitimate business transaction. The prosecution has
failed to establish that the applicant knowingly purchased spurious drugs or
intended to benefit from illegal transactions. The Karnataka High Court in
Razorpay Software Pvt. Ltd. v. Union of India, 2024 SCC OnLine Kar 23
has held that negligence without knowledge of the predicate offence does
not constitute an offence under Section 3 of the PMLA.

13. It is submitted that the applicant‟s arrest was made in gross violation
of Section 19 of the PMLA, which mandates that the arresting officer must
have “reason to believe” that the person is guilty based on the material in his
possession. In the present case, the applicant was arrested solely for his
alleged failure to produce certain documents, which is not a ground for arrest
under the PMLA. It is pertinent to mention that the applicant fully

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cooperated with the investigation and his statement under Section 50 of the
PMLA was recorded before his arrest on 5th April, 2024, and later during
custody on multiple occasions. The Hon‟ble Supreme Court in Pankaj
Bansal v. Union of India, 2023 SCC OnLine SC 1244, held that arrest in
the absence of substantive evidence to support guilt under PMLA vitiates the
proceedings.

14. It is submitted that the prosecution complaint was filed on 6th June,
2024, and subsequent proceedings have been delayed, with the matter
currently at the stage of compliance under Section 207 of the Cr.P.C. There
is no likelihood of an early conclusion of the trial and therefore, the
applicant is entitled for bail. The Hon‟ble Supreme Court in Javed Gulam
Nabi Shaikh v. State of Maharashtra and Another, 2024 SCC OnLine SC
1693, has reiterated that prolonged incarceration during pending trials
violates the fundamental right to a speedy trial under Article 21 of the
Constitution.

15. It is submitted that the applicant satisfies the triple test for bail as he
has roots in society and is not a flight risk, has no propensity to tamper with
evidence considering that the entire evidence is documentary and in the
custody of the investigating agency and the applicant is willing to abide by
any conditions imposed by this Court.

16. It is submitted that the alleged violations/offence primarily fall under
the Drugs and Cosmetics Act, 1940, which does not fall under the scheduled
offences of the PMLA. The alleged sale of medicines without invoices is
governed by Section 27 of the Drugs and Cosmetics Act, 1940 which

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prescribes specific penalties for such violations. Reliance in this regard has
been placed on the judgment of the Hon‟ble Supreme Court in Union of
India v. Ashok Kumar Sharma, (2021) 12 SCC 674, wherein, it was held
that regulatory infractions should be dealt with under specialized statutes
only, rather than general penal provisions.

17. It is submitted that the applicant‟s father is suffering from Grade IV
carcinogenic brain tumor, and the applicant has been previously granted
interim bail to attend to his ailing father. His grandfather, aged 94, is also
suffering from severe medical conditions. The Hon‟ble Supreme Court has
consistently held that humanitarian considerations should be taken into
account while considering bail, as reiterated in Manish Sisodia v.
Enforcement Directorate, 2024 SCC OnLine SC 2274.

18. In light of the above submissions, it is prayed that the instant
application may be allowed and the reliefs be granted as prayed for.

19. Per Contra, learned counsel appearing on behalf of respondent-ED
vehemently opposed the instant application submitting to the effect that the
same is liable to be dismissed being devoid of any merit.

20. It is submitted that the applicant is a close associate of the principal
accused namely Viphil Jain and was actively engaged in the distribution and
sale of spurious anti-cancer drugs through his family-owned businesses, M/s
Narula Associates and M/s Imperial Healthcare Pvt. Ltd.

21. It is submitted that the investigation has revealed financial
transactions amounting to Rs. 42 Lakhs between the applicant and co-
accused Viphil Jain which establishes the applicant’s role in facilitating the

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supply of counterfeit medicines to unsuspecting cancer patients. The
respondent contends that the applicant misused his position and reputation in
the medical business to act as a conduit for the proceeds of crime generated
from the illicit sale of counterfeit drugs.

22. It is emphasized that under Section 45 of the PMLA, the accused must
satisfy the mandatory twin conditions to be eligible for bail, which are, that
the prosecution must be given proper opportunity to oppose the bail
application and when opposed, the Court has to be satisfied that there are
reasonable grounds to believe that the accused is not guilty of the offence,
and that the accused is not likely to commit any offence while on bail.

23. It is submitted that given the gravity of the allegations and the
applicant‟s involvement in the systematic collaboration with the co-accused,
the applicant fails to satisfy these conditions and is not entitled to the
discretionary relief of bail.

24. It is submitted that the applicant had full knowledge of the illicit
nature of the transactions and was actively involved in the purchase and sale
of spurious drugs without proper authorization or invoices. The applicant
collaborated with co-accused Viphil Jain, Neeraj Chauhan, and Tushar
Chauhan in the organized network of counterfeit drug distribution, as
evidenced by bank transactions, statements, and seized records. The
applicant’s transactions were deliberately structured to conceal the source of
illicit funds, making him complicit in the offence of money laundering.

25. It is submitted that the applicant has a history of criminal
involvement, having been previously arrested in FIR No. 394/2021,

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registered at PS Punjabi Bagh under Sections 420, 384, 188, 240, 269 and
270 of the IPC read with Section 3 of the Epidemic Diseases Act, 1897 for
hoarding controlled medication during the COVID-19 pandemic. Despite
being on bail in that case, the applicant engaged in the present offence,
demonstrating a continued propensity to commit economic crimes, thus
making him ineligible for bail.

26. It is submitted that under the provisions of the PMLA, the
investigation into the offence of money laundering is distinct and
independent from the investigation of the predicate offence. It is not
necessary for an individual to be named as an accused in the predicate
offence to be prosecuted under the PMLA. The applicant’s involvement in
handling, concealing, and using the proceeds of crime makes him liable
under the PMLA, regardless of his role in the scheduled offence.

27. It is submitted that the applicant‟s arrest was carried out in
compliance with Section 19 of the PMLA, which mandates that “reasons to
believe” for the arrest must be recorded in writing and communicated to the
adjudicating authority. In the present case, the arrest was based on concrete
material, and the applicant was duly informed with the grounds of arrest on
22nd May, 2024. Furthermore, the learned Special Court, after being fully
satisfied with the material on record, remanded the applicant to ED custody,
thereby, establishing the legality of the arrest.

28. It is submitted that the applicant being an influential individual with
substantial financial resources, poses a serious risk of tampering with
evidence and influencing key witnesses. Out of the 35 identified witnesses, a

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majority of them are public witnesses/private individuals, and their
testimonies are critical to the prosecution‟s case. It is contended that
granting bail to the applicant at this stage would compromise the integrity of
the ongoing investigation.

29. It is submitted that the investigation and prosecution have been
conducted in a timely manner. It is submitted that the learned trial court has
already taken cognizance of the prosecution complaint vide order dated 21 st
September, 2024, and the matter is currently at the stage of compliance
under Section 207 of the CrPC. It is also submitted that the procedural
timeline of judicial processes cannot be a ground for bail in serious offences
such as money laundering.

30. It is further submitted that the statements recorded under Section 50 of
the PMLA are admissible in evidence, and the constitutional protections
applicable to statements recorded by police officers under the Indian
Evidence Act, 1872 do not extend to proceedings under the PMLA. ED
officials conducting inquiries are not classified as police officers, therefore,
statements recorded during the investigation are valid and enforceable.

31. It is submitted that the PMLA attributes liability not just to the
individual but also to all the conspirators involved in the offence. Since the
proceeds of crime generated from the scam benefit all the accused persons
directly or indirectly, the applicant herein cannot claim immunity based on
the quantum of money involved in his specific transactions as the offence in
the present ECIR has been committed by a group of individuals, thereby,
forming a syndicate ultimately generating proceeds of crime more than the

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prescribed threshold. The applicant, by his active participation, is liable for
the entire proceeds of crime, and thus, the instant bail application may be
rejected.

32. It is also submitted that the applicant herein cannot seek exemption
from the rigors of Section 45 of the PMLA by stating that the proceeds of
crime attributed to him is less than Rs. 1 Crore. It is further submitted that
the totality of the crime and entire transactions which have been funneled
among all the accused persons, have to be taken into consideration for the
constitution of offence under Section 45 of the PMLA.

33. Therefore, in view of the foregoing submissions, it is prayed that the
instant application may be dismissed.

34. Heard learned counsel for the parties and perused the material
available on record including the compilation of judgments, written
submissions and reply to the same.

35. In light of the submissions made before this Court, it is made out that
the grounds contended by the applicant for grant of bail are multifold.
Firstly, it has been contended that the applicant‟s arrest was not conducted in
compliance with the provisions of Section 19 of the PMLA which requires
„reasons to believe‟ before making an arrest. Secondly, the statements made
by co-accused Viphil Jain, Neeraj Chauhan and Tushar Chauhan under
Section 50 of the PMLA form the sole basis for the applicant‟s arrest which
is not sufficient to justify the applicant‟s arrest. Lastly, the applicant is
exempted from the twin conditions of bail under Section 45 of the PMLA.
However, even if it is assumed for the sake of arguments that he is not

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exempted under the proviso, the applicant satisfies the twin conditions
prescribed under the aforesaid provision.

36. This Court shall now proceed to examine the present matter.

37. Learned senior counsel for the applicant has contended that the
applicant‟s arrest was not conducted in compliance with the provisions of
Section 19 of the PMLA which requires „reasons to believe‟ before making
an arrest. It has been further argued that the statements made by co-accused
Viphil Jain, Neeraj Chauhan and Tushar Chauhan under Section 50 of the
PMLA form the sole basis for the applicant‟s arrest which are not sufficient
to justify the applicant‟s arrest.

38. The question before this court is whether the applicant‟s arrest was
carried out in adherence to the statutory requirements under Section 19 of
the PMLA which mandates that the authorized officer must have „reason to
believe‟ based on material evidence before arresting an individual accused
of money laundering. The said provision reads as under:

“Section 19. Power to arrest
(1) If the Director, Deputy Director, Assistant Director or any
other officer authorised in this behalf by the Central
Government by general or special order, has on the basis of
material in his possession, reason to believe (the reason for
such belief to be recorded in writing) that any person has been
guilty of an offence punishable under this Act, he may arrest
such person and shall, as soon as may be, inform him of the
grounds for such arrest.

(2) The Director, Deputy Director, Assistant Director or any
other officer shall, immediately after arrest of such person
under sub-section (1), forward a copy of the order along with
the material in his possession, referred to in that sub-section, to

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the Adjudicating Authority in a sealed envelope, in the manner,
as may be prescribed and such Adjudicating Authority shall
keep such order and material for such period, as may be
prescribed.

(3) Every person arrested under sub-section (1) shall, within
twenty-four hours, be taken to a [Special Court or] Judicial
Magistrate or a Metropolitan Magistrate, as the case may be,
having jurisdiction:

Provided that the period of twenty-four hours shall exclude the
time necessary for the journey from the place of arrest to the
[Special Court or] Magistrate’s Court.”

39. The following ingredients can be culled out from the reading of
Section 19(1) of the PMLA: firstly, the officer concerned must have some
“material in his possession”. Secondly, on the basis of such material, the
officer should have a „reason to believe‟ that any person has been „guilty‟ of
an offence punishable under the PMLA. Thirdly, such reasons should be
recorded in „writing‟ by the officer concerned and lastly, the person so
arrested should be „informed of the grounds of arrest‟.

40. The compliance of these conditions is undoubtedly mandatory, which
is also fortified by the explanation added to Section 45 of the PMLA, which
provides as under:

“Section 45. Offences to be cognizable and non-bailable.

***
Explanation. For the removal of doubts, it is clarified that the
expression “Offences to be cognizable and non-bailable” shall
mean and shall be deemed to have always meant that all
offences under this Act shall be cognizable offences and non-
bailable offences notwithstanding anything to the contrary
contained in the Code of Criminal Procedure, 1973 (2 of 1974),
and accordingly the officers authorised under this Act are

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empowered to arrest an accused without warrant, subject to the
fulfillment of conditions under section 19 and subject to the
conditions enshrined under this section.”

41. Having examined the statutory framework governing the power of
arrest under Section 19 of the PMLA, this Court shall now proceed to
consider the judicial precedents that have interpreted and applied these
provisions in various factual contexts.

42. In in Vijay Madanlal Choudhary (Supra), the Hon‟ble Supreme
Court had made the following observations:

“208. Section 19 of the 2002 Act postulates the manner in
which arrest of person involved in money laundering can be
effected. Sub-section (1) of Section 19 envisages that the
Director, Deputy Director, Assistant Director, or any other
officer authorised in this behalf by the Central Government, if
has material in his possession giving rise to reason to believe
that any person has been guilty of an offence punishable under
the 2002 Act, he may arrest such person. Besides the power
being invested in high-ranking officials, Section 19 provides for
inbuilt safeguards to be adhered to by the authorised officers,
such as of recording reasons for the belief regarding the
involvement of person in the offence of money laundering. That
has to be recorded in writing and while effecting arrest of the
person, the grounds for such arrest are informed to that person.
Further, the authorised officer has to forward a copy of the
order, along with the material in his possession, in a sealed
cover to the adjudicating authority, who in turn is obliged to
preserve the same for the prescribed period as per the Rules.”

43. Further in the case of V. Senthil Balaji v. State, (2024) 3 SCC 51, the
Hon‟ble Supreme Court has explained the mandate of Section 19 of PMLA
by observing the following:

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“40. To effect an arrest, an officer authorised has to assess and
evaluate the materials in his possession. Through such
materials, he is expected to form a reason to believe that a
person has been guilty of an offence punishable under the
PMLA, 2002. Thereafter, he is at liberty to arrest, while
performing his mandatory duty of recording the reasons. The
said exercise has to be followed by way of an information being
served on the arrestee of the grounds of arrest. Any non-
compliance of the mandate of Section 19(1) of the PMLA, 2002
would vitiate the very arrest itself. Under sub-section (2), the
authorised officer shall immediately, after the arrest, forward a
copy of the order as mandated under sub-section (1) together
with the materials in his custody, forming the basis of his belief,
to the adjudicating authority, in a sealed envelope. Needless to
state, compliance of sub-section (2) is also a solemn function of
the arresting authority which brooks no exception.”

44. In case of Pankaj Bansal (Supra), the Hon‟ble Supreme Court while
reiterating the principles laid down in case of Vijay Madanlal Choudhary
(Supra) has made the following observations on the scope of Section 19 of
PMLA:

“17. At this stage, it would be apposite to consider the case law
that does have relevance to these appeals and the issues under
consideration. In Vijay Madanlal Choudhary [Vijay Madanlal
Choudhary v. Union of India, (2023) 12 SCC 1 : 2022 SCC
OnLine SC 929 : (2022) 10 Scale 577] , a three-Judge Bench of
this Court observed that Section 65 PMLA predicates that the
provisions of the Code of Criminal Procedure, 1973, shall
apply insofar as they are not inconsistent with the provisions of
PMLA in respect of arrest, search and seizure, attachment,
confiscation, investigation, prosecution and all other
proceedings thereunder. It was noted that Section 19 PMLA
prescribes the manner in which the arrest of a person involved

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in money laundering can be effected. It was observed that such
power was vested in high-ranking officials and that apart,
Section 19 PMLA provided inbuilt safeguards to be adhered to
by the authorised officers, such as, of recording reasons for the
belief regarding involvement of the person in the offence of
money laundering and, further, such reasons have to be
recorded in writing and while effecting arrest, the grounds of
arrest are to be informed to that person.”

45. The inference drawn from the above judicial pronouncements is that
Section 19 of the PMLA imposes procedural safeguards on the arresting
authority, thereby, ensuring that arrests are not made arbitrarily but are based
on well-founded reasons which are also recorded in writing. The decisions
quoted in the foregoing paragraphs reaffirm that compliance with these
procedural requirements is mandatory, and any deviation from the
prescribed framework could vitiate the arrest. The courts have consistently
emphasized that the power to arrest under the PMLA is vested in high-
ranking officials and must be exercised with due diligence, ensuring that the
accused is informed of the grounds of arrest and that the requisite material is
submitted to the adjudicating authority in a sealed manner.

46. In the present case, it has been argued on behalf of the applicant that
his arrest was conducted in a mechanical manner without recording specific
reasons for belief of guilt. The grounds of arrest, as communicated, were
allegedly a verbatim reproduction of statutory language without reference to
specific material evidence.

47. Conversely, the respondent argues that the arrest was made after due
consideration of financial records and electronic evidence establishing the

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applicant‟s role in laundering proceeds of crime. It has been submitted that
all statutory requirements were met and that the arrest was necessary to
prevent the tampering and destruction of evidence and influence over
witnesses.

48. In assessing the legality of the applicant‟s arrest, this Court must
carefully examine the role assigned to the accused applicant herein which
led to his arrest and ultimately to the present bail application.
The relevant extract of the first supplementary prosecution complaint is as
under:

“…6.5 Lovee Narula (Retailer of medicine business)
On scrutiny of the bank account statement of Lavee Narula
bearing account no. 194401500829 (RUD-60) maintained with
ICICI Bank, it is noticed that an amount of Rs. 12,97,500/- was
transferred to the bank account of Neeraj Chauhan as
mentioned below:

Further, it is also noticed that an amount of Rs. 42,98,000/- was
transferred to the bank account of Tushar Chauhan as
mentioned below:

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Further, it is also evident that an amount of Rs. 30,03,500/- was
transferred to the bank account of Viphil Jain as mentioned
below:

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Further, Lovee Narula in his statement recorded during the
custodial interrogation stated that he purchased spurious
anticancer medicine i.e Keytruda Injection from Neeraj
Chauhan at an average price of Rs. 1,20,000/- per vial and
payment for the same was made in the bank accounts of
Neeraj Chauhan and Tushar Chauhan. Therefore, total amount
of Rs. 55,95,500/was transferred as sale proceeds of spurious
anti-cancer medicine i.e Keytruda Injection. Therefore, in total,
46 vials of spurious Keytruda Injection were purchased by
Lovee Narula during the relevant period. Further Lovee Narula
in his statement stated that he earned profit of Rs. 10,000/- per
vial of Keytruda Injection which were purchased from Neeraj
Chauhan. Therefore, in total Lovee Narula earned a profit of
Rs 4,60,000/- from selling of spurious anti-cancer medicine i.e
Keytruda Injection.

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made in the bank account of Viphil Jain. Further an amount of
Rs. 30,03,500/- were transferred to the bank account of Viphil
jain during 2022 and 2023. Therefore in total 57 vials of
Opdyta Injection were purchased from Viphil Jain by
Lovee Nanlla and the same were sold in open market thereby
earning a profit of Rs. 2,85,000/-.

Therefore, in total, Lovee Narula earned profit to the tune of
Rs. 7,45,000/- from the sale of spurious anti-cancer medicines
and is thereby is in possession of proceeds of crime to the tune
of Rs. 7,45,000/-. Further, Lovee Narula in his statement
recorded during the custodial interrogation stated that he
purchased spurious anticancer medicine i.e Keytruda Injection
from Neeraj Chauhan at an average price of Rs. 1,20,000/- per
vial and payment for the same was made in the bank accounts
of Neeraj Chauhan and Tushar Chauhan. Therefore, total
amount of Rs. 55,95,500/was transferred as sale proceeds of
spurious anti-cancer medicine i.e Keytruda Injection.
Therefore, in total, 46 vials of spurious Keytruda Injection were
purchased by Lovee Narula during the relevant period. Further
Lovee Narula in his statement stated that he earned profit of Rs.
10,000/- per vial of Keytruda Injection which were purchased
from Neeraj Chauhan. Therefore, in total Lovee Narula earned
a profit of Rs. 4,60,000/- from selling of spurious anti-cancer
medicine i.e Keytruda Injection.

Further, Lovee Narula in his statement recorded during
custodial interrogation stated that he purchased the spurious
anti-cancer medicine i.e Opdyta Injection from Viphil Jain at
an average price of Rs. 52,500/- per vial and further sold the
same in open market with an average profit of Rs. 5,000/- per
vial. He further stated that payments for purchase of spurious
anti-cancer medicine i.e Opdyta Injection from Viphil Jain
were made in the bank account of Viphil Jain. Further an
amount of Rs.30,03,500/- were transferred to the bank account
of Viphil jain during 2022 and 2023. Therefore in total 57
vials of Opdyta Injection were purchased from Viphil Jain by

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Lovee Narula and the same were sold in open market thereby
earning a profit of Rs. 2,85,000/-.

49. After thorough examination of the aforesaid extracts, it becomes
evident that the investigating agency has outlined specific details
highlighting the applicant‟s involvement in the alleged offence. It is
observed that upon investigation it was found by the respondent ED that the
applicant herein is a close associate of Viphil Jain, who is the prime accused
and that the applicant is actively involved in his family medical business,
i.e., M/s Narula Associates and M/s Imperial Healthcare Pvt. Ltd. which
specializes in distributing anti-cancer drugs across India.

50. The investigation further revealed various financial transactions
between the applicant herein and Viphil Jain since the year 2020, including
credits of approximately Rs. 42 Lakhs to Viphil Jain‟s account from Lovee
Narula, i.e., the applicant herein. Additionally, the applicant allegedly used
his industry presence and reputation to act as a conduit facilitating the
supply of counterfeit anti-cancer drugs produced by Viphil Jain to
unsuspecting cancer patients through indirect delivery by Neeraj Chauhan.
Moreover, the arrest order dated 22nd May, 2024 was duly issued to the
applicant herein.

51. It is evident from the bare reading of the role assigned to the applicant
herein, that the generated proceeds of crime were allegedly transferred to the

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accounts of the associates and their family members and the applicant played
a significant role. This shows the role of the applicant in money laundering
and distribution of the illicit gains, and thus, the offence under the PMLA is
prima facie committed.

52. The investigating authority has also relied on statements of Viphil
Jain, Tushar Chauhan and Neeraj Chauhan recorded under the Section 50 of
the PMLA. As per the material available on record, on 5th April, 2024, the
applicant, in his statement, admitted to paying Viphil Jain from his ICICI
Bank account for spurious injections without invoices which were delivered
to his shop and then sold to patients. He also admitted to purchasing
spurious Keytruda injections from Neeraj Chauhan without invoices, making
payments to Neeraj Chuahan‟s accounts with Axis Bank and HDFC Bank.

53. Furthermore, on 17th April, 2024, co-accused Viphil Jain, in his
statement under Section 50 of the PMLA, claimed that the applicant herein
bought unsealed vials of anticancer drugs without invoices and payment of
the same was made in cash. He also mentioned about the applicant‟s
extensive network in the medical field, including customers abroad, to
whom he supplied anti-cancer medications. It was further stated by Viphil
Jain that the applicant utilized his professional reputation to assist in
generating and acquiring proceeds from illegal distribution of spurious
drugs, making him culpable under Sections 3 and 4 of the PMLA for money
laundering.

54. As per the record available, including the first supplementary
prosecution complaint dated 20th July, 2024 and the ECIR, it is also

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observed by this Court that during the custodial interrogation, the applicant
admitted to dealing in Keytruda and Opdyta injections without
invoices/bills, sourcing the same from Neeraj Chauhan and Tushar Chauhan
to reduce costs and increase profits, instead of using authorized dealers.

55. The financial records indicate substantial money transfers among the
applicant herein and the co-accused‟s accounts as well as other known
associates involved in the counterfeit medicine syndicate. These
transactions, along with the applicant‟s control over the business operations,
substantiate the claim that he was engaged in money laundering activities.

56. This Court is satisfied that the investigating authority followed due
process and substantiated the ‘reason to believe’ with concrete evidence
rather than mere suspicion. Accordingly, the challenge to the legality of the
arrest is without merit, and no relief is warranted to the applicant on this
ground.

57. Having examined and determined the first issue regarding the legality
of the applicant‟s arrest under Section 19 of the PMLA, this Court shall now
proceed on to the second interconnected ground raised by the applicant, i.e.,
the statements made by co-accused Viphil Jain, Neeraj Chauhan and Tushar
Chauhan under Section 50 of the PMLA form the sole basis for the
applicant‟s arrest which is not sufficient to justify the applicant‟s arrest.

58. In light of the observations made in the preceding paragraphs, it
stands established that the investigating authority did not rely solely on the
statement of any one co-accused, rather it relied upon the statement of the
applicant as well as other co-accused persons namely Neeraj Chauhan,

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Tushar Chauhan and Viphil Jain along with the documentary evidence
including the Whatsapp chats etc. which shows the financial trail of the
proceeds of crime in the instant matter. The same goes to show that the
respondent ED has corroborating evidence on its record to justify the
implication of the applicant herein.

59. This Court is satisfied that the respondent ED has considered
independent material, including financial records, digital evidence, and the
applicant‟s own communications, which substantiate the applicant‟s
involvement in the alleged offence.

60. Having examined the factual matrix and the evidence placed on
record, this Court must now turn its attention to the statutory framework of
Section 50 governing the evidentiary value of statements recorded under the
PMLA. The said provision reads as under:

“Section 50. Powers of authorities regarding summons,
production of documents and to give evidence, etc
(1) The Director shall, for the purposes of section 13, have the
same powers as are vested in a civil court under the Code of
Civil Procedure, 1908 (5 of 1908) while trying a suit in respect
of the following matters, namely: –

(a) discovery and inspection;

(b) enforcing the attendance of any person, including any
officer of a [reporting entity] and examining him on oath;

(c) compelling the production of records;

(d) receiving evidence on affidavits;

(e) issuing commissions for examination of witnesses and
documents; and

(f) any other matter which may be prescribed.
(2) The Director, Additional Director, Joint Director, Deputy
Director or Assistant Director shall have power to summon any

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person whose attendance he considers necessary whether to
give evidence or to produce any records during the course of
any investigation or proceeding under this Act.
(3) All the persons so summoned shall be bound to attend in
person or through authorised agents, as such officer may
direct, and shall be bound to state the truth upon any subject
respecting which they are examined or make statements, and
produce such documents as may be required.
(4) Every proceeding under sub-sections (2) and (3) shall be
deemed to be a judicial proceeding within the meaning of
section 193 and section 228 of the Indian Penal Code (45 of
1860).

(5) Subject to any rules made in this behalf by the Central
Government, any officer referred to in sub-section (2) may
impound and retain in his custody for such period, as he thinks
fit, any records produced before him in any proceedings under
this Act:

Provided that an Assistant Director or a Deputy Director shall
not-

(a) impound any records without recording his reasons for so
doing; or

(b) retain in his custody any such records for a period
exceeding three months, without obtaining the previous
approval of the [Joint Director].”

61. A careful reading of the provision reveals that the authorities
empowered under Section 50 of the PMLA possess the authority to enforce
discovery and inspection, compel the attendance of individuals, examine
them on oath, require the production of records, receive evidence through
affidavits, and issue commissions for the examination of witnesses and
documents.

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62. The provision further clarifies that any person summoned under sub-
section (2) is legally bound to comply, state the truth regarding matters
under inquiry, and produce the requisite documents as directed by the
authorities. It is pertinent to note that such proceedings are deemed to be
judicial proceedings under Sections 193 and 228 of the Indian Penal Code.

63. Having examined the scope and application of Section 50 of the
PMLA, the core question that now arises for consideration is whether the
statements recorded under this provision are admissible as evidence and to
what extent they can be relied upon to justify the applicant‟s arrest and
continued detention.

64. The Hon‟ble Supreme Court in Rohit Tandon v. Directorate of
Enforcement, (2018) 11 SCC 46 made the following observations regarding
the admissibility of statements recorded under Section 50 of the PMLA:

“We have independently examined the materials relied upon by
the prosecution and also noted the inexplicable silence or
reluctance of the appellant in disclosing the source from where
such huge value of demonetised currency and also new
currency has been acquired by him. The prosecution is relying
on statements of 26 witnesses/accused already recorded, out of
which 7 were considered by the Delhi High Court. These
statements are admissible in evidence, in view of Section 50 of
the 2002 Act. The same makes out a formidable case about the
involvement of the appellant in commission of a serious offence
of money laundering. It is, therefore, not possible for us to
record satisfaction that there are reasonable grounds for
believing that the appellant is not guilty of such offence.”

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65. In a recent judgment, the Hon‟ble Supreme Court in Abhishek
Banerjee v. Enforcement Directorate, (2024) 9 SCC 22 has again made
similar observations which are as under:

“21. …Section 160 which falls under Ch. XII empowers the
police officer making an investigation under the said chapter to
require any person to attend within the limits of his own or
adjoining station who, from the information given or otherwise
appears to be acquainted with the facts and circumstances of
the case, whereas, the process envisaged by Section 50 PMLA
is in the nature of an inquiry against the proceeds of crime and
is not ―investigation‖ in strict sense of the term for initiating
prosecution; and the authorities referred to in Section 48
PMLA are not the police officers as held in Vijay Madanlal
[Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC
1] .

22. It has been specifically laid down in the said decision that
the statements recorded by the authorities under Section 50
PMLA are not hit by Article 20(3) or Article 21 of the
Constitution, rather such statements recorded by the authority
in the course of inquiry are deemed to be the judicial
proceedings in terms of Section 50(4), and are admissible in
evidence, whereas the statements made by any person to a
police officer in the course of an investigation under Ch. XII of
the Code could not be used for any purpose, except for the
purpose stated in the proviso to Section 162 of the Code. In
view of such glaring inconsistencies between Section 50 PMLA
and Sections 160/161CrPC, the provisions of Section 50 PMLA
would prevail in terms of Section 71 read with Section 65
thereof.”

66. In light of the foregoing judicial pronouncements, it is evident that
statements recorded under Section 50 of the PMLA hold evidentiary value
and are admissible in legal proceedings. The Hon‟ble Supreme Court, while

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emphasizing the legal sanctity of such statements, observed that they
constitute valid material upon which reliance can be placed to sustain
allegations under the PMLA.

67. In the aforesaid judgment, the Hon‟ble Supreme Court also reaffirmed
the admissibility of statements under Section 50 of the PMLA,
distinguishing them from statements recorded under the CrPC. The Hon‟ble
Court further underscored that such statements, being recorded during an
inquiry rather than an investigation, are not subject to the restrictions under
Article 20(3) and Article 21 of the Constitution. Instead, they are deemed to
be judicial proceedings under Section 50(4) of the PMLA and, therefore,
admissible as evidence in proceedings under the PMLA. The Hon‟ble Court
further clarified that the provisions of Section 50 of the PMLA having an
overriding effect by virtue of Sections 65 and 71 of the PMLA prevail over
the CrPC in case of any contradictions.

68. Accordingly, this Court is of the considered view that statements
recorded under Section 50 of the PMLA are admissible in evidence and can
be relied upon to establish culpability in money laundering cases.

69. Having examined the admissibility of statements recorded under
Section 50 of the PMLA, this Court shall now proceed to analyze the
statutory framework governing the burden of proof in proceedings related to
proceeds of crime.

“24. Burden of proof. –In any proceeding relating to proceeds
of crime under this Act, — (a) in the case of a person charged
with the offence of money-laundering under section 3, the
Authority or Court shall, unless the contrary is proved, presume

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that such proceeds of crime are involved in money-laundering;
and

(b) in the case of any other person the Authority or Court, may
presume that such proceeds of crime are involved in money-

laundering.”

70. From the bare perusal of Section 24 of the PMLA, it is evident that
once a person is charged with the offence of money laundering under
Section 3, the law presumes that the proceeds of crime are involved in
money laundering unless the contrary is proven by the accused.

71. In the present case, as observed in the preceding paragraphs, the
reliance placed by the investigating agency is not only on the statement of
co-accused recorded under Section 50 of the PMLA but also on the financial
records, WhatsApp chats etc., which indicate the applicant‟s active role in
the alleged money laundering activities along with the other co-accused.

72. By virtue of Section 24 of the PMLA, the respondent is not required
to conclusively establish the applicant’s guilt at the pre-trial stage, rather, the
applicant must demonstrate that the proceeds of crime attributed to him are
not linked to money laundering. In the absence of any rebuttal by the
applicant, the presumption under Section 24 of the PMLA stands in favor of
the respondent, thereby, justifying his continued detention.

73. With regard to the above, this Court has referred to the judgment of
the Hon‟ble Supreme Court in Prem Prakash v. Enforcement Directorate,
(2024) 9 SCC 787, wherein, the following observations were made:

“In Vijay Madanlal Choudhary [Vijay Madanlal Choudhary v.
Union of India, (2023) 12 SCC 1] dealing with Section 24

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PMLA, the three-Judge Bench held as under : (SCC pp. 229-31,
paras 237 & 239-40)
―237. Be that as it may, we may now proceed to decipher the
purport of Section 24 of the 2002 Act. In the first place, it must
be noticed that the legal presumption in either case is about the
involvement of proceeds of crime in money-laundering. This
fact becomes relevant, only if, the prosecution or the authorities
have succeeded in establishing at least three basic or
foundational facts. First, that the criminal activity relating to a
scheduled offence has been committed. Second, that the
property in question has been derived or obtained, directly or
indirectly, by any person as a result of that criminal activity.
Third, the person concerned is, directly or indirectly, involved
in any process or activity connected with the said property
being proceeds of crime. On establishing the fact that there
existed proceeds of crime and the person concerned was
involved in any process or activity connected therewith, itself,
constitutes offence of money-laundering. The nature of
process or activity has now been elaborated in the form of
Explanation inserted vide Finance (No. 2) Act, 2019. On
establishing these foundational facts in terms of Section 24 of
the 2002 Act, a legal presumption would arise that such
proceeds of crime are involved in money-laundering. The fact
that the person concerned had no causal connection with such
proceeds of crime and he is able to disprove the fact about his
involvement in any process or activity connected therewith, by
producing evidence in that regard, the legal presumption would
stand rebutted.

***

239. Be it noted that the legal presumption under Section 24(a)
of the 2002 Act, would apply when the person is charged with
the offence of money-laundering and his direct or indirect
involvement in any process or activity connected with the
proceeds of crime, is established. The existence of proceeds of
crime is, therefore, a foundational fact, to be established by the

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prosecution, including the involvement of the person in any
process or activity connected therewith. Once these
foundational facts are established by the prosecution, the onus
must then shift on the person facing charge of offence of money-
laundering–to rebut the legal presumption that the proceeds of
crime are not involved in money-laundering, by producing
evidence which is within his personal knowledge. In other
words, the expression ―presume‖ is not conclusive. It also does
not follow that the legal presumption that the proceeds of crime
are involved in money-laundering is to be invoked by the
authority or the court, without providing an opportunity to the
person to rebut the same by leading evidence within his
personal knowledge [Sarbananda Sonowal v. Union of India,
(2005) 5 SCC 665] .

240. Such onus also flows from the purport of Section 106 of
the Evidence Act. Whereby, he must rebut the legal presumption
in the manner he chooses to do and as is permissible in law,
including by replying under Section 313 of the 1973 Code or
even by cross-examining prosecution witnesses. The person
would get enough opportunity in the proceeding before the
authority or the court, as the case may be. He may be able to
discharge his burden by showing that he is not involved in any
process or activity connected with the proceeds of crime. In any
case, in terms of Section 114 of the Evidence Act, it is open to
the court to presume the existence of any fact which it thinks
likely to have happened, regard being had to the common
course of natural events, human conduct, and public and
private business, in their relation to the facts of the particular
case. Considering the above, the provision under consideration
[Section 24(a)] by no standards can be said to be unreasonable
much less manifestly arbitrary and unconstitutional.”

74. In light of the principles enunciated by the Hon‟ble Supreme Court in
Vijay Madanlal Choudhary (Supra) and reiterated in Prem Prakash
(Supra), this Court must determine whether the foundational facts necessary

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to invoke the presumption under Section 24 of the PMLA have been
established by the respondent. The Hon‟ble Supreme Court has categorically
held that the prosecution must satisfy three essential ingredients. First, the
commission of a scheduled offence must be established. Second, the
property in question must be shown to have been derived or obtained,
directly or indirectly, as a result of such criminal activity and third, the
accused must be linked, directly or indirectly, to any process or activity
connected with the proceeds of crime.

75. At this stage, this Court deems it imperative to refer to the statements
of Lovee Narula, Neeraj Chauhan, Tushar Chauhan and Viphil Jain. The
relevant extracts are as under:

“..5.2.1 Statements of Viphil Jain were recorded on
08.04.2024, 10.04.2024, 11.04.2024, 12.04.2024, 13.04.2024,
14.04.2024, 16.04.2024, 17.04.2024 and 18.04.2024 under
section 50 of the PMLA, 2002; wherein he stated inter-alia
that (RUD- 8)
Summons dated 08.04.2024 were issued to Viphil Jain and
statement of Shri Viphil Jain was recorded on 08.04.2024in the
Tihar Jail premises. Thereafter, Shri Viphil Jain was arrested
u/s 19 of PMLA, 2002 on 08.04.2024. On 09.04.2024, Viphil
Jain was produced before the Hon’ble Special Judge, PMLA,
2002, the Hon’ble Court allowed ED Custody of Viphil Jain for
14 days till 23.04.2024. During the recording of statements,
Viphil Jain stated inter alia that:

i. He had studied upto 10th Class. Thereafter, he started a
medical business in the name of M/s Angel Pharmaceuticals
with his partner Shri Mahesh Jain. Thereafter, Viphil Jain
started dealing in general medicines as well as anti-cancer
medicines.

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ii. He and Suraj Shat had rented the flat no. 1101 and 1110
and installed the capping and labeling machines for preparing
fake/spurious anti-cancer medicines. They used to fill
Fluconazol (FORCAN IV) in the empty vials of the anti-cancer
medicine viz. Keytruda. Thereafter, they sold the same in open
market through Aditya Krishna, Akshay Kumar, Neeraj
Chauhan, Keshav Anand, Sneha and others.

iii. He procured empty vials of Keytruda from Pravez Khan and
Neeraj Chauhan for making fake/spurious anticancer
medicines and after preparing such spurious anticancer
medicines, he used to sell the same in open market through
Aditya Krishna and some other persons;

iv. Suraj Shat had arranged machines for preparing anticancer
medicines and that he had paid money for the purchase of such
machines to Suraj Shat. Further, he also stated that he had
gone to Mumbai for purchasing caps for capping the spurious
anti-cancer medicines in the month of October, 2023.
v. He used to get original empty vials of anti-cancer medicines
(Keytruda) from Neeraj Chauhan and Pravez Khan. He and
Suraj Shat also used to paste the label of empty vials on the
vials which were either ―not for sale‖ or were ―short expiry
vials‖ of anti-cancer medicines (Keytruda) provided by Neeraj
Chauhan and Aditya Krishna. He also stated that Suraj Shat is
an expert in the work of pasting labels on vials.
vi. He was not authorized by any law, organization to sell,
purchase, re-label any anti-cancer medicines.
vii. He knew Pravez Khan @ Parvez Malik since 2014. Pravez
Khan was a pharmacist in Rajiv Gandhi Cancer Hospital, New
Delhi and Pravez Khan used to provide the empty vials of anti-
cancer medicines viz. Keytruda to him for an amount of Rs.
500/- to Rs. 700/- per vial. Further, Viphil Jain stated that he
procured those empty vials of Keytruda from Pravez Khan for
making fake/spurious anti-cancer medicines
viii. He wanted to purchase 2 flats at DLF Capital Green. For
the same, he required credit entries and balance in his wife’s

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bank account to make payment to the builder company. At that
time, he had cash in hand of Rs. 50,00,000/- approximately.
Therefore, he met Gaurav Garg and requested him to provide
him credit entries in his as well in his wife’s bank account in
lieu of Cash. Gaurav Garg agreed to receive Cash i.e. Rs.
49,00,000/- and also agreed to provide credit entries in the
bank account of his wife’s bank account as well as his bank
account. In lieu of the said Cash amount i.e. Rs. 49,00,000/-,
Gaurav Garg provided credit entries of Rs. 34,00,000/-
(inclusive of TDS) into the bank account of his wife Deepali
Jain and credit entries of Rs. 15,00,000/- (inclusive of TDS)
into the bank account of Viphil Jain;

ix. He had deposited the sale proceeds of spurious anti-cancer
medicines, received in cash, in the bank account of Suraj Shat
and thereafter, as and when required, Suraj Shat used to
transfer funds to the bank accounts provided to him by Viphil
Jain. Further, he disclosed that he had also used sale proceeds
of spurious anti-cancer medicines to purchase a new Car
Toyota Fortuner in the name of his wife Deepali Jain.
x. That, Viphil Jain received funds of Rs. 42,02,100/- from
Lovee Narula, Rs. 19,52,500 from Aditya Krishna and Rs.
5,40,000/- from Sneha Shivaji Kandhare in his bank account
against the sale of unsealed vials of anti-cancer medicines
without any bill and invoice to Lovee Narula. Further, he
disclosed that Lovee Narula used to purchase these unsealed
vials of anti-cancer medicines without any bill and invoice in
cash from Aditya Krishna, Neeraj Chauhan, Gagan Khurana,
Ayonij Jain and himself and used to sell the same to his
customers in India as well as abroad.

xi. That Viphil Jain received funds to the tune of Rs. 23,00,000/-
from M/s Delhi Medicine Hub (Akshay Kumar) in the bank
account of his son Sanyam Jain. He used to sell unsealed vials
of anti-cancer medicines without any bill and invoice to M/s
Delhi Medicine Hub mostly in cash. However, some balance
funds were received in his bank account. As such, M/s Kesha

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Enterprises also paid the balance amount in the bank account
of his son Sanyam Jain.

xii. He had received funds of Rs. 11.40 lacs from M/s Delhi
Medicine Hub (Akshay Kumar), Rs. 95,000/- from M/s Cancer
Medicine (Akshay Kumar) in the bank account number
1338104000051484, Rs. 24.46 lacs from Aditya Krishna, Rs.
7.55 lacs from M/s Popular Medicine Specialties, Rs. 13.00
lacs from Suraj Shat in the bank account of his wife Deepali
Jain, which was nothing but the sale proceeds of spurious/
fake anti-cancer medicines.

xiii. He admitted that cash deposited in the bank account of his
family members and himself are nothing but the sal proceeds of
unsealed / spurious anti-cancer medicines to Aditya Krishna,
Gagan Khurana, Karan, Saurav Garg, Akshay Kumar, Neeraj
Chauhan, etc.
xiv. He stated that he used to operate the bank account of his
wife Deepali Jain and he transferred Rs. 23.00 lacs in the bank
account of Sheetal Pandey from the bank account of his wife
Deepali Jain as a friendly loan. He stated that Sheetal Pandey
is his friend and does ‗Keertan & Bhajan’. He also stated that
he received Rs. 10.00 lacs from Aditya Aggarwal and Rs.
10.00 lacs from Yogendra Kumar Dabas as friendly loan in
bank account of his wife. Further, Viphil Jain stated that he
also used to operate the bank account of his son Sanyam Jain.
xv. He along with his family visited Dubai in December 2023
and spent approx. Rs 6.50 lacs in cash. He also visited Bangkok
in October, 2023. He also organized two ‗Keertan‖ in 2023
and spent approx. Rs 8-9 lacs rupees in cash.

xvi. He stated that he is unable to recall how many numbers of
vials of anti-cancer medicines were purchased and sold by him
so far. He also could not tell how much spurious/ fake anti-
cancer medicines were prepared by him.

***
5.4.1 Statements of Neeraj Chauhan S/o Sh. Gopi Chand were
recorded on 08.04.2024, 10.04.2024, 12.04.2024, 13.04.2024,

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By:GAURAV SHARMA
Signing Date:29.01.2025
16:51:25
14.04.2024, 15.04.2024, 17.04.2024, 20.04.2024 and 21
20.04.2024 under section 50 of the PMLA, 2002, wherein he
stated inter-alia that: (RUD- 17)

Summons dated 08.04.2024 was issued to Sh.Neeraj Chauhan
and statement of Sh. Neeraj Chauhan was recorded on
08.04.2024 in the Tihar Jail premises. Thereafter, Sh. Neeraj
Chauhan was arrested u/s 19 of PMLA, 2002 on 08.04.2024.
On 09.04.2024, Neeraj Chauhan was produced before the
Hon’ble Special Judge, PMLA, 2002, the Hon’ble Court
allowed ED Custody of Neeraj Chauhan for 14 days till
23.04.2024. During the statement of Neeraj Chauhan he inter
alia stated :

i. That he completed his Graduation from Jat College Baraut,
UP in 2001-02. After completion of his Graduation, he joined
Paras Hospital, Sec – 43, Gurugram Sushant Lok, thereafter in
2009 he joined Artemis Hospital, Gurugram as Co-ordinator at
Medical Oncology, thereafter worked in BL Kappor Hospital
Delhi, Max Hospital. From 2019-22, he worked in Paras
Hospital Gurugram as Manager Oncology. After that in 2022,
he incorporated a firm named M/s Futura Global Health for the
purpose of Medical Tourism, wherein his wife Shrishti is
proprietor.

ii. That, he was introduced with Viphil Jain in Jaunary 2023 as
Viphil Jain is also engaged in distribution of oncology
medicines. Suraj Shat is assistant and co-worker of Viphil Jain.
He used to purchase Keytruda (anti-cancer medicine) from
Viphil Jain for Rs. 75,000-80,000/- per vial. On request of
Viphil Jain, he used to arrange empty vials & empty boxes of
various anti-cancer medicines and supply the same to Viphil
Jain. Further, he disclosed that he has financial transactions
with Viphil Jain in respect of dealing of spurious anti-cancer
medicine.

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Signing Date:29.01.2025
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iii. That he knew Akshay Kumar, partner in M/s Delhi
Medicine Hub, Chandigarh. He came in contact with Akshay
Kuma through India Mart online application in respect of
dealing & distribution of anti-cancer medicines. He also stated
that h used to purchase anti-cancer medicines from Viphil Jain,
Rohit Bist, Mazid Khan, Jitendra and sell the same to M/s Delhi
Medicine Hub (through Akshay Kumar & Rajesh Kumar), Mr.
Lovee Narula, Aditya Krishna, Gagan Khurana, Mehtab and
some more persons. He sold spurious anti-cancer medicines to
M/s Delhi medicine Hub, Chandigarh without bills and
received funds in his account and in the bank account of his
wife Smt. Shrishti Chauhan.

iv. He used to receive empty vials / empty boxes of anti-cancer
medicines from Rohit, Majid and Jitender and he supplied the
same to Viphil Jain. He was well aware that Viphil Jain was
engaged in the business of fake/ spurious medicines and for this
purpose Viphil Jain required such empty boxes/ empty vials of
anti-cancer medicines. Viphil Jain was not authorized person
for sale of anti-cancer medicines, however he purchased
spurious anti-cancer medicines for the monetary benefits.
Viphil Jain asked him for empty vials of anti-cancer medicines
like Keytruda and Opdyta etc.
v. That, in May, 2022, when Neeraj Chauhan was working in
Paras Hospital, Gurugram, Mr. Viphil Jain introduced Mr.
Aditya Krishna. Thereafter, Aditya Krishna started to deal with
him. Also, In December, 2023, Aditya Krishna met him in
thehouse of Viphil Jain during a ―Jagran-Keertan‖ and told
that he wanted to purchase fake and spurious anti-cancer
medicines. Neeraj Chauhan used to sell fake and spurious anti-
cancer medicines like Keytruda 100 mg Darzalax 400mg etc to
Mr. Aditya Krishna till end of February, 2023.
vi. That, he also used to purchase these fake and spurious
anticancer medicines and sell the same to Mr Gagan Khurana
through Mr Tushar Chauhan.

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Signing Date:29.01.2025
16:51:25

vii. That, Crime Branch, Delhi Police recovered and seized Rs.
89 lacs and 18000 USD from house of Neeraj Chauhan. Apart
from this, various spurious vails/ empty vials/ empty boxes of
anti-cancer medicines viz. Keytruda, Opdyta etc were
recovered and seized from his house during the search
proceedings of Crime Branch, New Delhi. He also stated that
the said spurious/ fake/ empty vials of anti-cancer medicines
were procured from Sh. Rohit Bisht, Sh. Jitender Dahiya, Sh.

Majid Khan and Sh. Rehan. Neeraj Chauhan could not explain
source of seized forex to the tune of USD 18000/- from his
house.

viii. That, he stated that end use of such recovered empty vials/
boxes was re-labeling and re-capping on anti-cancer filled
medicines.

ix. That, he bifurcated the said recovered and seized 89 lacs
rupees from his house – Rs 9 to 10 lacs appear outstanding
amount from M/s Mamta Enterprises (partnership firm of
Mohak Thadani and Neeraj Chauhan), Rs. 20 to 25 lacs from
his work done by Medical Tourism, Rs. 1.90 lacs by selling of
his old car, Rs. 35 to 40 lacs was pertain to Viphil Jain (cash
received by selling of fake spurious vials as anti-cancer
medicines) and the same were being transferred to Viphil Jain,
Rs. 25 to 30 lacs was of selling unsealed anti-cancer vials of
anti cancer medicines which were purchased by him from
Rohit Bisht, Jitender Dahiya, Majid Khan.

x. That, he did not raise any invoice or any bill in respect of
purchase and sale of vials of anti-cancer medicines .
xi. That, he stocked huge quantity of empty vials and boxes of
anti-cancer medicines in his home, which were recovered
during Crime Branch search operation, when he was asked
reason for the same, he stated that he started collecting empty
vials/ boxes of anti-cancer medicines for supplying them to
Viphil Jain. Neeraj Chauhan was associated with the medical
field from 2009 and he was aware about the proper disposal of
the empty vials/ boxes of life saving drugs, however when he

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16:51:25
was asked to explain the reason for not disposing the same, he
could not answer.

xii. That, whats app chat related to the sale purchase of anti-
cancer medicines between Akshay Chandigarh (Akshay Kumar,
Delhi Medicine Hub) was shown to Neeraj Chauhan, he
confirmed the same. He also stated that he used to sell unsealed
vials of anti-cancer medicines without bill to Akshay Kumar.
As bill was not available, therefore, he demanded payment in
cash only. He also stated that he used to adopt Hawala
Channels for cash transactions in respect of sale and purchase
of vials of anti-cancer medicines without bill.

xiii. That, he was asked about a chat containing cash
transaction details, between him and Aman (employee of his
Sumit Chauhan, CA), he stated that he is unable to explain the
reason or purpose of receipt of cash from his CA Sumit
Chauhan.

xiv. That, he had given USD 12000 to Viphil Jain as Viphil Jain
needed money in USD currency for his Dubai Trip. Neeraj Jain
also stated that his patient used to give him money in USD and
further, Neeraj Jain used to pay their medical bill in INR. He
also stated that later he used to sold such exchanged USD in
the open market at higher rate.

xv. That, he was shown his whatsapp chat with ‗Rohit
Venkateshwara’ and asked to explain chats. He replied that
‗Rohit Venkateshwara’ is Rohit Bisht and the said chat
represents that Rohti Bisht used to supply cap of vials of
Keytruda, Trecentiq, Perjeta, Opdyta @ Rs. 1000/- per vial.
xvi. That, whats app chat between Neeraj Chauhan and Ayansh
Sharma with regards to sale-purchase of anti-cancer medicine
was shown to him, wherein he replied that he sold some
anticancer medicines viz. Opdyta to Ayansh Sharma without
bill.

xvii. That, whats app chat between Neeraj Chauhan and
‗Narula Janakpuri Medicine’, wherein he replied that Narula
Janakpuri Medicine is actually the chat with Lovee Narula.

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By:GAURAV SHARMA
Signing Date:29.01.2025
16:51:25

Lovee Narula is into trading medicines through Imperial Mart.
Lovee Narula is also engaged in Import of medicines from
Turkey, Russia, USA etc. On seeing the chat with ‗Narula
Janakpuri Medicine’, he stated that Lovee Narula requested
vials of Opdyta anticancer medicines without any bill or
invoice. On demand of Lovee Narula, he sold vials of anti-
cancer medicines viz. Keytruda, Opdyta, Perjeta and infinzi etc
without any invoice and bill of Lovee Narula and received sale
proceeds in cash. Further, he stated that sometimes he received
payment in his bank account maintained with HDFC Bank.
xviii. That, he stated that there are 02 firms namely M/s Mamta
Enterprises. One Mamta Enterprises at Kotla Mubarakpur,
Delhi, proprietorship concern of Sh. Mohak Thadani and other
Mamta Enterprises at Sec-51, Gurugram is partnership firm of
his and Mohak Thadani and established in July 2023, having
bank account in Axis Bank. Further, he stated that he met Sh.
Mohak Thadani in 2013-14 while he was working in BL Kapoor
Hospital, thereafter they are in regular touch. In year 2023,
they both decided to open a partnership firm in 2023 in
Gurugram for supply of medicines in Gurugram and therefore
M/s Mamta Enterprises at Gurugram was opened in July 2023.
He also stated that all medicines were sold from M/s Mamta
Enterprises were billed and invoices were generated.
xix. That, he stated that he met Gagan Khurana through Online
Portal India mart. Gagan Khurana is in contact with him
through his cousin brother Tushar Chauhan and on Gagan’s
request, he supplied the filled vials of Keytruda to Gagan
Khurana.

***
5.6 Lovee Narula S/o Shri Vijay Narula-Statements ofLovee
Narula S/o Shri Vijay Narula Rio G-133. 2nd Floor. LIC
Colony. Paschim Vihar. New Delhi- 110063 were recorded on
05.04.2024. 23.05.20241 24.05.2024. 25.05.2024.
26.05.2024 and 27.05.2024 under section 50 of the PMLA.
2002 : (RUD – 49)

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Statement of Lovee Narula was recorded on 05.04.2024,
wherein he undertook that he will provide documents on
22.04.2024 and also requested to continue his further
statement. Thereafter, he appeared in the office on 22.05.2024
to continue his earlier statement and he was arrested under
section 19 of the PMLA on 22.05.2024 and produced before the
Hon’ble Special Court, Tis Hazari, New Delhi seeking
custodial interrogation of Lovee Narula Accordingly, ED
custody was granted till 27.05.2024 by the Hon’ble Special
Court, New Delhi vide its Order dated 22.05.2024. During
course of investigation, he stated inter-alia that:

i. He has passed B.Tech (Mechanical) from Swinbum
University of Technology, Melbourne, Australia in 2012. He
has also done certification Pharmacology and rare medicines
in 2017 from Kings College, London. He has started 01 startup
viz. Your Medikart.

ii. He knew Viphil Jain as Viphil Jain was also working for Mis
Pious tree Pharma and also working as an Operation Theatre
Technician in Rajiv Gandhi Hospital.

iii. He met Neeraj Chauhan in 2016 in Mis Paras Hospital
wherein he was working as an attendant. Thereafter, he and
Neeraj Chauhan used to meet frequently. Neeraj Chauhan
informed him that he used to supply Keytruda Injection for the
cancer patients and asked him to inform him about the need for
any Keytruda Injection. Thereafter, whenever he got the
requirement for Keytruda Injection in his shop i.e. Mis Narula
Associates, he would convey the same to Neeraj Chauhan and
he used to deliver the Keytruda injection to the patient directly.
He further stated that he used to pay the amounts for the said
Keytruda Injection into the accounts of Viphil Jain, Tushar
Chauhan and sometimes in cash.

iv. He also knew Aditya Krishna through his friend named Sh.
Sagar Mehta, Mumbai.

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v. He doesn’t have any bill for the medicines purchased from
Viphil Jain as he never provided him the bills for the medicines.
Also, he doesn’t have any bills for the purchase of Keytruda
Injection from Neeraj Chauhan.

vi. He stated that due to his greed for more and more profit, he
continued his medicine business with Viphil Jain and continued
to purchase Opdyta Injection from him.

vii.On being shown account statement of Account No
194401500829 maintained with ICICI Bank containing
transaction details with Tushar Chauhan, he stated that he
used to purchase Keytruda vials from Neeraj Chauhan for an
amount of Rs. 1,20,000/- per vial and Tushar Chauhan is
cousin of Neeraj Chauhan and as per direction of Neeraj
Chauhan, he transferred the purchase amount to the tune of Rs.
44,26,000/- of the said spurious anti-cancer medicine Keytruda
vials in the account of Tushar Chauhan. The amount
transferred in the account of Tushar Chauhan was against the
purchase of spurious anti-cancer medicines Keytruda without
bills.

viii. He was shown account statement of Account No
194401500829 maintained with ICICI Bank containing
transactions with Viphil Jain, wherein he stated that he used to
purchase spurious Opdyta injection from him without any bill
or tax invoice. Further, he stated that the said anticancer
medicines purchased from Viphil Jain were further sold to the
patients in need.

ix. He was shown account statement of Account No
194401500829 maintained with ICICI Bank containing
transaction details with Neeraj Chauhan, wherein he stated that
he used to purchase Keytruda vials from Neeraj
Chauhan and as per direction of Neeraj Chauhan for an
amount of Rs. 1,20,000/- per vials and had transferred the
purchase amount to the tune of Rs. 12,97,500/- of the said
spurious anti-cancer Keytruda vials in the account of Neeraj
Chauhan. The amount transferred in the bank account of

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Neeraj Chauhan for the purchase of spurious anti-cancer
medicines Keytruda without bill.

x. He stated that since 2019, he was dealing in purchase and
sale of Keytruda and Opdyta injections. He further stated that
complete local purchase of Keytruda Injection and Opdyta
Injection was without bill and the same were further sold to the
patients without bill.

xi. On being asked to explain the procedure for purchasing
anti-cancer medicine Keytruda and Opdyta vials, wherein he
stated that to purchase Keytruda injection in India, patient
should be prescribed this injection by an oncologist who is
specialized in Solid tumors and lymphomas; that this medicine
is approved for 18types of tumors in which MSD gives
schemeof one plus one free injection to the patient falling under
this category; there are only one or two distributors allotted by
MSD in every urban state from where patient can buy these
injection. The official price per 100 mg injection is Rs.
1,63,000/- whose MRP is Rs. 1,97,000/- and on buying this
patient gets another free of cost as Keytruda works only when
200 mg (2 injection) is given to the patient. Once medicine is
prescribed and patient buys 1 injection from authorized
distributor, he/ she gets enrolled in patient assistance program
where patient gets 100 mg free injection from MSD. Also the
patient should be diagnosed with 16 indicated treatments and
lastly he/ she should be Indian
xii. He also imported anti-cancer medicines for patients,
therefore he was asked procedure for importing anti-cancer
medicines, wherein he replied that he imports medicine for
patients which are not available or being marketed in India or
they come under rare drugs category.

xiii. He stated that he used to purchase the Keytruda Injection
vial from Neeraj Chauhan and Tushar Chauhan in the price
range of Rs. 1,15,000/- to Rs. 1,25,000/- per vial and sold the
same for Rs. 1,25,000/- to Rs. 1,35,000/per vial. He further
stated that he had earned the profit of Rs. 10,000/(approx.) per

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vial of Keytruda injection which was purchased from Neeraj
Chauhan and Tushar Chauhan.

xiv. He stated that he had purchased Opdyta injection from
Viphil Jain in the price range of Rs. 50,000/- to 55,000/- per
vial and sold the same for Rs. 55,000/- to Rs. 60,000/- He
further stated that he had earned profit of Rs. 5,000/- (approx.)
per vial ofOpdyta injection which was purchased from Viphil
Jain.

xv. He stated that it is correct to say that despite knowing
Neeraj Chauhan and Tushar Chauhan were not authorized
dealer of Keytruda injection, he purchased the Keytruda
Injection from them.

xvi. He stated that despite knowing Viphil Jain was not
authorized dealer of Opdyta injection, he purchased the Opdyta
injection from him.

xvii. He usually imported Keytruda from abroad for his regular
patients. However in case of any new patient’s case to him, he
purchased Keytruda Injection from Neeraj Chauhan and
Tushar Chauhan because it costed less to him than to purchase
it from the authorized dealer of Keytruda Injection.
xviii. He purchased Opdyta 40 mg injection vials from Viphil
Jain. He further stated that even after knowing the fact that
Viphil Jain was not authorized dealer of Opdyta 40 mg
injection, he purchased the Opdyta 40 mg injection from Viphil
Jain as Opdyta 40 mg injection was not readily available in the
open market at that time.

xix. He purchased anti-cancer medicines from Viphil Jain and
Neeraj Chauhan and sold the same to various entities and
person in open market. He stated that he is unable to recall
quantity of medicines and total amount of purchase of anti-
cancer medicines from Viphil Jain and Neeraj Chauhan.
xx. He purchased all anti-cancer medicines without bill from
Viphil Jain and Neeraj Chauhan and the amounts were
transferred to bank accounts of Viphil Jain and Neeraj

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Chauhan. He further stated that he also paid purchase amounts
to Viphil Jain and Neeraj Chauhan in cash.

***

5. 7 Statement of Shri Tushar Chauhan S/o Shri Raj Kumar
Chauhan was recorded on 25.06.2024 in Judicial Custody in
the Tihar Jail premises and his statements recorded on
25.06.2024. 03.07.2024 and 04.07.2024 in ED Custody u/s 50
of PMLA, 2002. wherein he stated inter-alia that: (RUD-50)
i. he completed DMLT (Diploma in Medical Laboratory
Technician) in 2018. He joined AIIMS hospital, Delhi as Lab
Attendant in 2019 through a firm BECIL as outsourcing staff.
He used to get a salary Rs. 15,000/per month from BECIL.
ii. he left this job on 25.01.2023 because his cousin Neeraj
Chauhan offered him better salary i.e. Rs. 75,000/- per month.
Neeraj Chauhan used to give him salary Rs. 45,000/- from Mis
Futura Global Health and Neeraj Chauhan used to give him Rs.
30,000/- in cash per month.

iii. he used to work on instruction of Neeraj Chauhan. He used
to call buyers as well as sellers for Neeraj Chauhan in respect
of sale and purchase of anti-cancer medicines viz; Keytruda,
Opdyta, Perjeta, Tricentriq, Imfinz etc. He stated that they i.e.
Neeraj Chauhan and Tushar Chauhan came in contact with
various sellers and buyers of anti-cancer medicines through
WhatsApp groups and IndiaMart online application. As
required, he used to contact with buyers of anti-cancer
medicines and finalized the deal. Neeraj Chauhan used to
provide him anti-cancer medicines for supply to buyers of anti-
cancer medicine. Accordingly, he supplied those medicines and
received sale proceeds of anti-cancer medicines in cash. He
stated that Neeraj Chauhan never provided him any bill in
respect of supply of anticancer medicines because Neeraj
Chauhan used to sell anti-cancer medicines without bill and
mostly in cash.

iv. he stated that Neeraj Chauhan used to purchase anti-cancer
medicines viz; Keytruda, Opdyta, Perjeta etc. from Viphil

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16:51:25
Jainwithout bill and in cas and sold the same without bill and
in cash to his buyers. He assisted Neeraj Chauhan in purchase
of anti-cancer medicines from Viphil Jain and sold the same to
various buyers. He also worked for M/s.Futura Global Health
firm of Neeraj Chauhan. He used to accommodate patients,
provide medicines and provide some other facilities as
required by the patients of Futura Global Health.

v. he stated that he met Viphil Jain through Neeraj Chauhan in
January, 2023. Neeraj Chauhan told him that Viphil Jain was
a supplier of anticancer medicines and Neeraj Chauhan also
told that they i.e. Neeraj Chauhan and Tushar Chauhan used to
purchase anti-cancer medicines from Viphil Jain without bill
and in cash. Therefore, as suggested by Neeraj Chauhan he
used to receive anti-cancer medicines from Viphil Jain
and supplied the same to the buyers of Neeraj Chauhan. He
stated that Viphil Jain never gave any bill to Neeraj Chauhan
and Neeraj Chauhan never gave any bill to buyers of anti-
cancer medicines.

vi. Neeraj Chauhan further stated that he used to receive anti-
cancer medicines from Viphil Jain at his rented house at 1412,
Tower-4, DLF Capital Green, Delhi where he used to meet
Viphil Jain and Suraj Shat at the said house. Suraj Shat alias
Golu told him that Viphil Jain had given strict instruction to
Suraj Shat to not allow anyone to enter in the Kitchen.
vii. he stated that he used to receive anti-cancer medicines viz;
Keytruda, Opdyta, Perjeta etc. from Viphil Jain without bill and
handed over the same to Neeraj Chauhan at his house.
Thereafter, on instruction of Neeraj Chauhan he used to supply
above said anti-cancer medicines to Akshay Kumar (Mis
Cancer Medicine Agencies and Mis Delhi Medicine Hub),
Chandigarh without bill and used to receive sale proceeds of
anti-cancer medicines in cash from Akshay Kumar.

viii. On being shown bank account bearing no.

922010022896238 in the name of Tushar Chauhan maintained
with Axis Bank Limited, Tushar Chauhan stated that Neeraj

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Chauhan used to deposit sale proceeds of anti-cancer
medicines without bill and in cash. He stated that Neeraj
Chauhan used to give details of his bank accounts to various
buyers of anti-cancer medicines without bill and the said
buyers used to deposit sale proceeds of anti-cancer medicines
in his bank account and on instruction of Neeraj
Chauhan, he used to transfer the said funds to various
entities/persons.

ix. he further stated that Neeraj Chauhan used to give him Rs.
500/- for every debit transaction amount of Rs 50,000/-.
x. he stated that he received funds in his bank account from
Ankush of M/s 2M Pharma, Aditya Krishna, Delhi Medicine
Hub through Akshay Kumar etc.
xi. he collected more than 200 Keytruda Injections from Viphil
Jain and gave the same to Neeraj Chuhan. Neeraj Chauhan
also used to collectKeytruda injections directly from Viphil
Jain. Viphil Jain never provided any bill for purchase of anti-
cancer medicines.

xii. he stated that on instruction of Neeraj Chauhan he used to
supply anticancer medicines including Keytruda injection to
Lovee Narula, Aditya Krishna, Akshay Kumar without bill and
in cash. Neeraj Chauhan also supplied Keytruda Injection to
Lovee Narula, Aditya Krishna, Akshay Kumar directly without
bill.

xiii. he stated that for supply of each Keytruda Injection to
Aditya Krishna, Neeraj Chauhan used to give him Rs. 1000/-
(in cash) per vial ofKeytruda Injection.

xiv. he used to receive Keytruda Injections seal packed and
Seal opened Keytrudalnjection from Neeraj Chauhan and
supplied the same to various customers ofNeeraj Chauhan
without bill and mostly in cash and details of sale amount, he
used to share with Neeraj Chauhan through WhatsApp Chat.
xv. Further, he stated that by Seal opened Keytruda meant box
of the Keytruda injection werere seal opened. Neeraj Chauhan
used to procure filled vials from Majid, Rohit Singh Bisht,

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Viphil jain and some others whom he did not know. Neeraj
Chauhan also used to procure empty boxes of Keytruda
injection from various persons whose name he did not know.
Neeraj Chauhan used to match batch and expiry of filled vials
of Keytruda procured from Majid, Rohit Singh Bisht, Viphil
Jain with empty boxes and provided the same to him for further
supply to the customer ofNeeraj Chauhan. Tushar Chauhan
saw empty boxes and empty vials of various anti-cancer
medicines at the house ofNeeraj Chauhan.

xvi. he stated that Neeraj Chauhan used to sell anti-cancer
medicines including Keytruda Injection without bill to foreign
based patients in foreign currency also.

xvii. Neeraj Chauhan used to pack filled Keytruda vials
received from Viphil Jain and others, in the empty boxes of
Keytruda injection, after matching their expiry date and batch
number. Thereafter, Neeraj Chauhan used to give the said
Keytruda vials to him for further supply of the same.
xviii. he stated that quality of medicines were compromised
because Neeraj Chauhan used to manually match the batch
number of filled vials and empty boxes of the anti-cancer
medicines including Keytruda Injection. He knew that there was
no requirement of such matching of vials and boxes in any
medicine but Neeraj Chauhan used to do such matching.
xix. he further stated that on instruction of Neeraj Chauhan he
transferred the fund infused by various buyers of Neeraj
Chauhan to the bank accounts provided by Neeraj Chauhan.
He admitted that ‘to allow Neeraj Chauhan to use his bank
accounts’; he used to receive 1 % of debit transaction value
from N eeraj Chauhan. He used that 1 % amount in his day to
day expenses. Except Lovee Narula, Akshay Kumar (Delhi
Medicine Hub); he did not know persons I entities who
provided credit entries in his bank accounts. As directed by
Neeraj Chauhan, he also used to withdraw funds in cash from
his bank accounts and handed over the same to Neeraj
Chauhan.

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xx. he stated that after November, 2021 transactions done in his
bank accounts pertain to Neeraj Chauhan; he had done those
transaction on instruction of Neeraj Chauhan and in lieu of
those transaction he received rupee 1 % of debit transactions
from Neeraj Chauhan. He stated that he received Rs. 45,000/-
as commission from Neeraj Chauhan.

xxi. Neeraj Chauhan started to pay Rs. 30,000/- per month in
cash for the work of supply of spurious anti-cancer medicine
since January, 2023 and paid the same till March, 2024 to
Tushar Chauhan…

”

76. Upon perusal of the aforesaid extracts of statements, it is observed
that all the accused persons have given their testimonies under Section 50 of
the PMLA and analysis of the same reveals that the accused persons, to
some extent, corroborate each other‟s testimonies.

77. It is observed by this Court that the present applicant had strong
network in the medical field, and he runs his family medial business in the
name of M/s Narula Associates and M/s Imperial Healthcare Pvt. Ltd.,
which are one of the few authorized dealers of life saving medicines in
NCR. Further, the long standing business relationship of the applicant with
the prime accused Viphil Jain is revealed as it has been stated by the
applicant that he knows Viphil Jain since the year 2021. The applicant has
also admitted to purchasing unsealed anti-cancer medication from Viphil
Jain and Neeraj Chauhan and has been selling the same to terminally ill
cancer patients.

78. Further, the statement recorded on 23rd May, 2024 shows that the
applicant accused has admitted to have transferred an amount of Rs.

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42,26,000/- for the purchase of spurious anti-cancer medicines in the
account of Tushar Chauhan without any invoice. Additionally, the applicant
has also admitted to transferring of Rs. 40,00,000/- (approx.) to the account
of Viphil Jain for the purchase of spurious anti-cancer medicines. Other than
the above transactions, the applicant further admitted to having transferred
Rs. 1,20,000/- to the account of Neeraj Chauhan and Rs. 12,97,500/- to the
account of Tushar Chauhan.

79. The aforesaid observation reveals that the applicant had knowledge
that Viphil Jain, Tushar Chauhan and Neeraj Chauhan are not the authorized
dealers.

80. Furthermore, the gist of statements given by Viphil Jian, Neeraj
Chauhan and Tushar Chauhan affirm to the facts and circumstances admitted
by the applicant with regard to several financial transactions, sale and
purchase of spurious anti-cancer medicines and laundering of money
through hawala channels.

81. The aforesaid basis of arrest specifically highlight the flow of funds
from the applicant’s firm to accounts linked with known associates involved
in the counterfeit medicine syndicate, thereby, indicating the existence of
proceeds of crime and the applicant‟s involvement in the process of money
laundering.

82. Applying the legal presumption under Section 24(a) of the PMLA,
once the respondent has demonstrated these foundational facts, the onus
shifts to the applicant to rebut the presumption that the proceeds of crime
were not involved in money laundering. The applicant, however, has failed

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to provide any credible evidence to rebut this presumption. Moreover, mere
denial of involvement or assertion of being an investor in the firm without
day-to-day operational control is insufficient to discharge the burden
imposed by the Statute.

83. Furthermore, as clarified by the Hon‟ble Supreme Court, the
presumption under Section 24(a) of the PMLA does not operate conclusively
but allows the accused an opportunity to rebut through cross-examination,
production of evidence, or explanations under Section 313 of the CrPC. In
the absence of any such rebuttal, the presumption stands in favor of the
respondent, and the applicant’s continued detention is justified under the
PMLA.

84. Therefore, it is observed by this Court that the respondent had
sufficient material in its possession, including financial records, digital
evidence, and the applicant‟s communications, to establish a valid ‘reason to
believe’ that the applicant was guilty of the offence of money laundering.
The procedural safeguards under the Act were duly followed, and the
challenge to the legality of the arrest is without any merit.

85. Furthermore, the contention that the applicant‟s arrest was solely
based on the statement of co-accused persons under Section 50 of the PMLA
is unfounded.

86. It is observed by this Court that the respondent has presented
corroborative material, including financial transactions and records such as
Whatsapp chats which form the part of the chargesheet in the predicate
offence and the supplementary prosecution complaint, linking the applicant

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to the proceeds of crime. Considering the presumption under Section 24 of
the PMLA, the burden shifted to the applicant to disprove his involvement in
the alleged offence. However, the applicant has failed to provide any
credible evidence to rebut the statutory presumption.

87. Additionally, the learned senior counsel has also prayed that the
respondent ED has arrested the applicant in a pick and choose manner as the
individuals namely Gagan Khurana, Sneha Shivani, Ayonji Jain who had
graver role than the applicant were neither made accused by the ED, nor
were arrested. Regarding the same, this Court is of the considered view that
in terms of the settled position of law, an accused cannot seek parity with
respect to other persons while seeking bail and thus, this Court does not find
any merit in the said submission which stands rejected.

88. In view of the foregoing analysis, this Court finds that the applicant‟s
arrest was conducted in compliance with the statutory mandate of Section 19
of the PMLA.

89. Moving further, it has been argued on behalf of the applicant that the
applicant is exempted from the twin conditions of bail under Section 45 of
the PMLA. However, even if it is assumed for the sake of arguments that he
is not exempted under the proviso, the applicant satisfies the twin conditions
prescribed under the aforesaid provision.

90. In order to adjudicate the instant issue, this Court shall first peruse the
text of Section 45 of the PMLA, which lays down the statutory mandate
regarding the grant of bail in such cases and establishes the twin conditions
that the applicant must fulfill to secure release on bail.

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“Section 45. Offences to be cognizable and non-bailable.

(1) [Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), no person accused of an
offence 2[under this Act] shall be released on bail or on his
own bond unless–]

(i) the Public Prosecutor has been given a opportunity to
oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the
court is satisfied that there are reasonable grounds for
believing that he is not guilty of such offence and that he is not
likely to commit any offence while on bail:

Provided that a person, who, is under the age of sixteen years,
or is a woman or is sick or infirm, 3[or is accused either on his
own or along with other co-accused of money-laundering a sum
of less than one crore rupees] may be released on bail, if the
Special Court so directs:

Provided further that the Special Court shall not take
cognizance of any offence punishable under section 4 except
upon a complaint in writing made by–

(i) the Director; or

(ii) any officer of the Central Government or a State
Government authorised in writing in this behalf by the Central
Government by a general or special order made in this behalf
by that Government.

[(1A) Notwithstanding anything contained in the Code of
Criminal Procedure, 1973 (2 of 1974), or any other provision
of this Act, no police officer shall investigate into an offence
under this Act unless specifically authorised, by the Central
Government by a general or special order, and, subject to such
conditions as may be prescribed.]
(2) The limitation on granting of bail specified in sub-section
(1) is in addition to the limitations under the Code of Criminal
Procedure, 1973 (2 of 1974) or any other law for the time being
in force on granting of bail.

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[Explanation.–For the removal of doubts, it is clarified that the
expression “Offences to be cognizable and non-bailable” shall
mean and shall be deemed to have always meant that all
offences under this Act shall be cognizable offences and non-
bailable offences notwithstanding anything to the contrary
contained in the Code of Criminal Procedure, 1973 (2 of 1974),
and accordingly the officers authorised under this Act are
empowered to arrest an accused without warrant, subject to the
fulfillment of conditions under section 19 and subject to the
conditions enshrined under this section.]”

91. This Court shall now proceed to analyze the statutory framework
under Section 45 of the PMLA which governs the grant of bail in cases of
money laundering. Section 45 imposes stringent conditions on the grant of
bail. A careful reading of the provision reveals the following essential
ingredients that must be satisfied before bail is granted.

92. Firstly, Section 45(1) of the PMLA mandates that no person accused
of an offence under the PMLA shall be released on bail or on his own bond
unless two cumulative conditions are satisfied:(i) the Public Prosecutor must
be given an opportunity to oppose the bail application; and (ii) if the Public
Prosecutor opposes the application, the Court must be satisfied that there are
reasonable grounds for believing that the accused is not guilty of the offence
and is not likely to commit any offence while on bail.

93. Secondly, Section 45(2) of the PMLA provides that the limitations on
the grant of bail under sub-section (1) are in addition to the limitations
imposed under the CrPC, or any other law applicable at the time. This makes
it clear that the provisions of the PMLA are to be applied over and above the
general principles of bail applicable to criminal offences under the CrPC,

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thereby reinforcing the stringent approach adopted by the legislature in
dealing with money laundering offences.

94. Thirdly, the proviso to Section 45(1) of the PMLA carves out an
exception to the rigorous twin conditions by allowing bail to be granted, at
the discretion of the Special Court, to specific categories of persons, namely:

(i) individuals below the age of sixteen years, (ii) women, (iii) persons who
are sick or infirm, and (iv) those accused, either alone or with others, of
money laundering involving a sum of less than rupees one Crore.

95. Following a perusal of the statutory provision, it becomes imperative
to examine the judicial pronouncements that have interpreted and applied
Section 45 of the PMLA in various factual contexts.

96. The Hon‟ble Supreme Court in Nikesh Tarachand Shah v. Union of
India, (2018) 11 SCC 1 struck down the twin conditions as unconstitutional.
However, the legislature subsequently amended the provision to cure the
defects, and it has since been upheld in Vijay Madanlal Choudhary
(Supra), reaffirming the strict nature of bail conditions under the PMLA. In
Prem Prakash (Supra), the Hon‟ble Supreme Court has also delved into the
principles pertaining to bail in PMAL matters. The relevant paragraphs are
as under:

“Section 45 PMLA — Contours

10. Considering that the present is a bail application for the
offence under Section 45 PMLA, the twin conditions mentioned
thereof become relevant. Section 45(1) PMLA reads as under:

―45. Offences to be cognizable and non-bailable. — (1)
Notwithstanding anything contained in the Code of Criminal
Procedure, 1973 (2 of 1974), no person accused of an offence

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[under this Act] shall be released on bail or on his own bond
unless–

(i) the Public Prosecutor has been given an opportunity to
oppose the application for such release; and

(ii) where the Public Prosecutor opposes the application, the
court is satisfied that there are reasonable grounds for
believing that he is not guilty of such offence and that he is not
likely to commit any offence while on bail:

Provided that a person, who, is under the age of sixteen years,
or is a woman or is sick or infirm or is accused either on his
own or along with other co-accused of money-laundering a sum
of less than one crore rupees, may be released on bail, if the
Special Court so directs:

Provided further that the Special Court shall not take
cognizance of any offence punishable under Section 4 except
upon a complaint in writing made by–

(i) the Director; or

(ii) any officer of the Central Government or a State
Government authorised in writing in this behalf by the Central
Government by a general or special order made in this behalf
by that Government.‖

11. In Vijay Madanlal Choudhary v. Union of India [Vijay
Madanlal Choudhary v. Union of India, (2023) 12 SCC 1] , this
Court categorically held that while Section 45 PMLA restricts
the right of the accused to grant of bail, it could not be said that
the conditions provided under Section 45 impose absolute
restraint on the grant of bail. Para 302 is extracted
hereinbelow : (SCC p. 259)
―302. It is important to note that the twin conditions provided
under Section 45 of the 2002 Act, though restrict the right of the
accused to grant of bail, but it cannot be said that the
conditions provided under Section 45 impose absolute restraint
on the grant of bail. The discretion vests in the court, which is
not arbitrary or irrational but judicial, guided by the principles
of law as provided under Section 45 of the 2002 Act.‖

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These observations are significant and if read in the context of
the recent pronouncement of this Court dated 9-8-2024 in
Manish Sisodia v. Enforcement Directorate [Manish Sisodia v.

Enforcement Directorate, (2024) 12 SCC 660 : 2024 SCC
OnLine SC 1920] , it will be amply clear that even under PMLA
the governing principle is that ―Bail is the Rule and Jail is the
Exception‖. In para 52 of Manish Sisodia [Manish Sisodia v.
Enforcement Directorate, (2024) 12 SCC 660 : 2024 SCC
OnLine SC 1920] , this Court observed as under:

―52. … From our experience, we can say that it appears that
the trial courts and the High Courts attempt to play safe in
matters of grant of bail. The principle that bail is a rule and
refusal is an exception is, at times, followed in breach. On
account of non-grant of bail even in straightforward open-and-
shut cases, this Court is flooded with huge number of bail
petitions thereby adding to the huge pendency. It is high time
that the trial courts and the High Courts should recognise the
principle that ―bail is rule and jail is exception.‖

12. All that Section 45 PMLA mentions is that certain
conditions are to be satisfied. The principle that, ―bail is the
rule and jail is the exception‖ is only a paraphrasing of Article
21 of the Constitution of India, which states that no person
shall be deprived of his life or personal liberty except
according to the procedure established by law. Liberty of the
individual is always a Rule and deprivation is the exception.

Deprivation can only be by the procedure established by law,
which has to be a valid and reasonable procedure. Section 45
PMLA by imposing twin conditions does not re-write this
principle to mean that deprivation is the norm and liberty is the
exception. As set out earlier, all that is required is that in cases
where bail is subject to the satisfaction of twin conditions, those
conditions must be satisfied.

***
Scope of inquiry under Section 45 PMLA

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16. Coming back to the scope of inquiry under Section 45, Vijay
Madanlal Choudhary [Vijay Madanlal Choudhary v. Union of
India, (2023) 12 SCC 1] , while reiterating and agreeing with
the holding in Ranjitsing Brahmajeetsing Sharma v. State of
Maharashtra [Ranjitsing Brahmajeetsing Sharma v. State of
Maharashtra, (2005) 5 SCC 294 : 2005 SCC (Cri) 1057] , held
that the court while dealing with the application for grant of
bail in PMLA need not delve deep into the merits of the case
and only a view of the court based on the available material
available on record is required. It held that the court is only
required to place its view based on probability on the basis of
reasonable material collected during investigation. The words
used in Section 45 are ―reasonable grounds for believing‖
which means that the court has to see only if there is a genuine
case against the accused and the prosecution is not required to
prove the charge beyond reasonable doubt.”

97. Having considered the legislative intent behind Section 45 of the
PMLA and the judicial precedents interpreting its application, this Court
shall now proceed to apply the established principles to the facts of the
present case to assess whether the applicant has successfully satisfied this
Court that he falls under the proviso to Section 45 of the PMLA and if not,
whether he has discharged the burden of proving that he is not guilty of the
alleged offence and is unlikely to commit any offence while on bail.

98. The applicant has contended that the alleged offence pertains to an
amount below Rs. 1 Crore which should exempt him from the rigors of
Section 45 of the PMLA in light of its proviso.

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99. The material on record demonstrates that the accused persons
operated in a highly coordinated and systematic manner, with clear
understanding and collaboration among them to facilitate the offence.

100. The evidence shows deliberate concealment of the origin of funds, the
use of incorporations and the layering of transactions to evade detection by
regulatory authorities. The sheer scale of operations, involving the
movement of funds across multiple jurisdictions, use of hawala channels,
and sale of counterfeit medicines to unsuspecting patients and hospitals,
underscores the organized and syndicated nature of the offence.

101. The respondent has provided a detailed representation of the modus
operandi of the accused persons in the form of a graphic illustration. The
same is as under:

102. As emphasized by the Hon‟ble Supreme Court in a catena of
judgments, the offence of money laundering must be viewed in the context
of the entire criminal enterprise rather than in isolation with respect to
individual roles. The collective nature of the operations, the financial

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interlinkages between the accused persons, and the fraudulent intent
evidenced through sustained unlawful activity, leave no doubt that the
applicant was an integral part of the broader scheme to launder proceeds of
crime. At this stage, this Court has referred to the judgment of the Hon‟ble
Supreme Court passed in the matter of Saumya Chaurasia v. Enforcement
Directorate, (2024) 6 SCC 401, wherein, the Hon‟ble Court extensively
discussed the working of a syndicate and how the proceeds of crime are
attributable to the same along with the discretion granted to the Courts under
the proviso to Section 45 of the PMLA. The relevant paragraphs of the same
are as under;

19. As stated hereinabove, the supplementary complaint was
filed against the appellant along with the other accused on 30-
1-2023, in which the summary of investigative findings against
each of the accused persons have been recorded in Para 8
thereof. The details of the investigation conducted by the
respondent ED have been stated in Para 9 and the role of each
accused including the appellant in the commission of alleged
offence of money laundering has been stated in Para 10 thereof,
which reads as under:

―10. Role of accused in the offence of money laundering
A. Evidences of offence of money laundering against Smt
Saumya Chaurasia–

Mrs Saumya Chaurasia is an officer of the Chhattisgarh State
Civil Services who was posted as the Deputy Secretary in the
Office of Chief Minister of Chhattisgarh and was working as an
OSD to CM. Despite being relatively very junior in the
bureaucratic hierarchy, she enjoyed unprecedented power and
control because of her direct access to higher political powers.
Information shared by the Income Tax Department and analysis
of documents and digital devices seized during the searches

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conducted under Section 17 PMLA, 2002 revealed that Smt
Saumya Chaurasia, Deputy Secretary working in the Chief
Minister’s Office, is one of the key persons in creation of the
syndicate headed by Shri Suryakant Tiwari. An extortion racket
of this magnitude and nature was possible only when multiple
State agencies fell in place and everyone supported the illegal
acts of Suryakant Tiwari. This was made possible by Saumya
Chaurasia so that pliant officers were posted in the coal mining
districts who would listen to Suryakant Tiwari. Also, it was an
unwritten rule that instructions of Suryakant Tiwari meant the
voice of Saumya Chaurasia and the powers to be. The fact that
Suryakant Tiwari had personal and close official dealings with
her and was carrying her instructions to the officers, made it
possible for Suryakant Tiwari to also command senior district
level officers. This illegal authority was essential for him to run
his empire of illegal extortion from coal & iron pellet
transportation. Without his concurrence, no NOC was issued by
the district machinery. All this was made possible by the fact
that he was in the good books of Mrs Saumya Chaurasia.
Therefore, she has directly indulged in the offence of money
laundering as defined under Section 3 PMLA, 2002 being
actually involved in the process of money laundering by way of
possession, concealment, use, acquisition and projecting the
proceeds of crime as untainted property.

As per the findings of the investigation, it can be inferred that
Saumya Chaurasia has directly acquired ―proceeds of crime‖
as defined under Section 2(l)(u) PMLA, 2002 to an extent of
more than Rs 30 crores. ED’s investigation makes it evident
that although all the money of extortion on coal & iron pellet
transportation was collected by the syndicate of Suryakant
Tiwari, he was not the final beneficiary of this scam. He did
utilise large amounts of money for purchasing benami assets,
but big chunks of the money were transferred to Saumya
Chaurasia, spent on political funding and transferred as per the
instructions of higher powers.

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Mr Manish Upadhyay, a relative of Mr Suryakant Tiwari, is a
close associate of both Mrs Saumya Chaurasia & Mr Suryakant
Tiwari. ED investigation has established that Mr Manish
Upadhyay was inserted in as an extra layer of protection for
cash dealings between Mr Suryakant Tiwari and Mrs Saumya
Chaurasia. He used to transport cash from Mr Suryakant
Tiwari to Mrs Saumya Chaurasia.

ED investigation has established that Mrs Saumya Chaurasia
and her family went on a spree of acquiring immovable assets
during the period which coincided with the coal levy scam.
These assets of which she is the real beneficial owner were
identified and attached by issuance of provisional attachment
orders(s) as detailed in succeeding paragraphs.‖

20. The evidence relating to strong relations between the
appellant and Mr Suryakant Tiwari, between the appellant and
Mr Manish Upadhyay, and between the appellant and Mr
Anurag Chaurasia; the evidences of movement of funds
acquired out of extortion syndicate run by Mr Suryakant Tiwari
to Manish Upadhyay, proxy of the appellant; the utilisation of
proceeds of crime and acquisition of properties by the appellant
in the name of her mother Shanti Devi and cousin Mr Anurag
Chaurasia along with the details of the said properties, etc.
have been detailed in the said prosecution complaint, which
leave no doubt in the mind of the Court that prima facie the
appellant has been found involved in the commission of the
offence of money laundering as defined in Section 3 of the said
Act.

21. The next question that falls for consideration before the
Court is whether the appellant being a woman should be
granted the benefit of the first proviso to Section 45 PMLA,
which reads as under:

―45. Offences to be cognizable and non-bailable.–(1)
* * *
Provided that a person who is under the age of sixteen years or
is a woman or is sick or infirm [or is accused either on his own

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or along with other co-accused of money-laundering a sum of
less than one crore rupees], may be released on bail, if the
Special Court so directs:…‖

103. Moreover, it is pertinent to mention here that the word used in the
proviso to Section 45 of the PMLA is „may‟ which indicates that it is the
discretion of the Court concerned and it is not a mandate. As observed by the
Hon‟ble Supreme Court in a catena of judgments, it is the discretion of the
Court and all the other relevant factors are needed to be weighed in while
adjudicating the bail application. The relevant factors include the gravity of
the offence, likelihood of reoccurrence, criminal antecedents etc.

104. In view of the foregoing judgment, this Court holds that the applicant
cannot claim the benefit of the monetary threshold exemption under the
proviso to Section 45 of the PMLA even if the proceeds of crime alleged
against the applicant is merely Rs. 7,45,000/-.

105. The entire scheme of laundering illicit funds, as uncovered by the
investigation, extends far beyond the threshold of one crore rupees, and the
applicant’s role must be assessed in the broader context of the criminal
conspiracy in which he actively participated.

106. It is evident that an entire syndicate with established network and
properly defined roles exist and operates at different levels, which, when
taken into consideration in entirety, clearly indicate that the proceeds of
crime are more than Rs. 1 Crore, and thus, the proviso is not applicable in
the present case.

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107. Now this Court shall decide as to whether the applicant satisfies the
twin conditions of bail under Section 45 of the PMLA.

108. It is well settled, as reiterated by the Hon‟ble Supreme Court in Vijay
Madanlal Choudhary (Supra) and Manish Sisodia (Supra), that while the
stringent twin conditions under Section 45 of the PMLA restrict the right to
bail, they do not impose an absolute bar. The discretion of the Court in
granting bail remains judicial and must be exercised in accordance with the
settled legal principles. The governing principle that “bail is the rule, and jail
is the exception” must be harmonized with the legislative mandate that
requires satisfaction of the conditions laid down under Section 45 of the
PMLA before bail can be granted.

109. In the present case, the respondent has placed on record material
indicating the applicant‟s active involvement in the procurement and sale of
spurious anti-cancer medicines, the proceeds of which were funneled
through various channels, including formal banking and hawala
transactions. The grounds of arrest, along with financial records and
electronic evidence, establish a prima facie case of money laundering. The
applicant‟s role in the laundering of illicit proceeds stands corroborated by
the investigative findings, including statements under Section 50 of the
PMLA and independent documentary evidence.

110. The applicant has failed to discharge the burden placed upon him
under Section 45(1)(ii) of the PMLA which requires him to that there are
reasonable grounds for believing that he is not guilty of the offence. The
material produced by the respondent, including financial transactions linked

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to the proceeds of crime and the applicant‟s own admissions, points to his
direct and active involvement in the offence. Mere assertions that the
applicant was a passive investor and was unaware of the illegality of the
transactions do not satisfy the threshold required to overcome the
presumption under the PMLA.

111. Further, the second limb of Section 45(1)(ii) of the PMLA, which
mandates that the applicant must satisfy the Court that he is not likely to
commit any offence while on bail, is also not met.

112. The nature of the offence in the instant case, involving a sophisticated
network for the distribution of counterfeit medicines targeting vulnerable
patients, demonstrates a potential for re-offending if bail is granted. The
involvement of multiple entities and associates in the fraudulent scheme
raises a genuine apprehension that the applicant, if released, may influence
witnesses and tamper with evidence, thereby, jeopardizing the ongoing
investigation.

113. In view of the facts and circumstances, this Court finds that the twin
conditions prescribed under Section 45 of the PMLA have not been satisfied.

The evidence on record, the ongoing nature of the investigation, and the
applicant‟s alleged role in the broader financial and selling of spurious
medicines syndicate indicate that the rigors of Section 45 of the PMLA
continue to apply.

114. The present bail application has also been filed under Section 439 of
the CrPC, therefore, this Court, while considering the plea for bail, deems it
necessary to evaluate the applicant‟s case through well-established

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principles governing the grant of bail under the said provision.
Notwithstanding the rigors of Section 45 of the PMLA, the courts have
consistently applied the „triple test‟ as a guiding framework while
considering bail applications under special statutes, including the PMLA.

115. The triple test, derived from Section 439 of the CrPC, consists of the
various parameters. First, whether the accused is likely to abscond or evade
the process of law if released on bail. Given the nature of offences under the
PMLA, which often involve complex financial transactions and cross-border
elements, the potential for absconding is a significant concern. Second,
whether the accused, if released, is likely to influence witnesses or tamper
with evidence. In money laundering cases, where the trail of proceeds of
crime is intricate and dependent on multiple records and statements, the
possibility of interference with ongoing investigations remains high, and
third, whether there is a reasonable apprehension that the accused may
indulge in similar offences if granted bail, thereby prejudicing the ongoing
investigation and endangering public interest.

116. In Satender Kumar Antil v. CBI, (2022) 10 SCC 51, the Hon‟ble
Supreme Court has held that while granting bail, the gravity of the
allegations must be taken into account.

117. Applying the aforementioned principle to the present case, this Court
finds that the gravity of the allegations against the applicant is of a serious
nature, involving the alleged laundering of proceeds derived from the sale of
spurious anti-cancer medicines. The offence not only entails significant
financial implications but also poses a grave risk to public health and safety.

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118. As observed in the foregoing paragraphs, but not being repeated for
the sake of brevity, the applicant in the present case is alleged to have played
an active role in the procurement, distribution, and financial management of
the illicit business.

119. The evidence on record, including financial transactions and digital
communications, suggests a well-orchestrated operation which demands a
higher threshold of investigation before granting bail. The investigating
agency has highlighted the potential risk of the applicant tampering with the
evidence and influencing witnesses, thereby, affecting the integrity of the
ongoing investigation.

120. In the present case, the applicant has failed to demonstrate that his
release would not pose a risk to the investigative process. The applicant‟s
financial dealings, the intricate network of the accused persons, and the
continuing investigation reinforce the respondent‟s concerns regarding the
potential for obstruction of justice.

121. Thus, in addition to failing to fall under the proviso to Section 45 of
the PMLA and satisfy the twin conditions under Section 45(1) of the PMLA;
the applicant also fails to meet the general considerations under the triple
test for the grant of bail. Consequently, the applicant‟s custody is warranted
to ensure the integrity of the investigation and prevent any potential misuse
of the judicial process.

122. At this stage, it is also pertinent to mention that during the course of
arguments, it has been contended by the learned senior counsel for the
applicant that several co-accused persons, who play a major role in the

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By:GAURAV SHARMA
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predicate offence, have been enlarged on bail in the predicate offence and
thus, the instant applicant‟s bail plea may also be considered in light of the
same.

123. However, this Court is unable to accept the contention put forth by the
learned senior counsel for the applicant as it is a settled position of law that
the in order to grant bail to an accused under the PMLA, only the rigors of
twin conditions of Section 45 of the PMLA are to be looked into primarily
and only after satisfaction of the same, the Court may proceed to the other
factors depending upon the type of crime committed.

124. In the present case, the applicant has not been charged for some minor
offence that has simple economic ramifications, rather he has been charged
for supplying and selling of spurious life saving anti-cancer medicines and
that he is part of an established crime syndicate. This factual position does
not satisfy the consciousness of this Court and there are considerable reasons
to believe that there is likelihood that the applicant might commit offence
while on bail as the applicant does not have clean criminal antecedents.
Thus, the said argument stands rejected.

125. Having dealt with all the issues, this Court is of the view that
considering the filing of the first supplementary prosecution complaint and
the ongoing nature of the investigation, it is not satisfied that the applicant
has fulfilled the twin conditions under Section 45 of the PMLA. The
respondent has presented sufficient material to warrant further investigation,
including financial records, electronic evidence, and statements of co-
accused implicating the applicant. These materials suggest an active

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involvement in laundering proceeds of crime and a pattern of financial
transactions that need further investigation.

126. The ongoing investigation is an extensive and meticulous effort by the
investigating agency to unearth a broader nexus of financial misconduct and
uncover deeper layers of the offence alleged herein. As new evidence
continues to emerge, it may further solidify the allegations against the
applicant. The complexity of the financial trail and its potential societal and
national ramifications require continued custodial interrogation and thus, this
Court does not find any merit in the instant bail application.

127. In light of the above discussions on facts and law, it is held that the
applicant has been unable to put forth any propositions before this Court that
are sufficient for grant of bail and thus, the same are rejected. In view of the
same, this Court is not inclined to release the applicant on bail and the
instant application, is, hereby, dismissed along with the pending
applications, if any.

128. The applicant, if on interim bail, is directed to surrender before the
Court concerned within a period of seven days from today and the
sureties/bail bond, if any shall stand discharged. If the applicant fails to
surrender as directed, the investigating agency shall take appropriate steps to
take the applicant in custody to secure his presence.

129. It is made clear that any observations made herein are only for the
purpose of deciding the present petition and shall not be construed as an
expression on the merits of the case. The learned Trial Court shall proceed

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with the matter uninfluenced by any observations made by this Court and
shall decide the case strictly in accordance with law.

130. The order will be uploaded on the website forthwith.

CHANDRA DHARI SINGH, J
JANUARY 28, 2025
rk/ryp/mk
Click here to check corrigendum, if any

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By:GAURAV SHARMA
Signing Date:29.01.2025
16:51:25

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