SC’s Vijay Madanlal Judgment Doesn’t Exempt Foreign Recipients Of Proceeds Of Crime From Scrutiny On Mere Contractual Legitimacy Of Transaction: Delhi HC

The Delhi Excessive Court docket has made it clear that overseas recipients of proceeds of crime are usually not exempted from scrutiny beneath the Prevention of Cash Laundering Act, 2002, on a mere floor of ‘contractual legitimacy’ of transactions.
Justice Ravinder Dudeja thus rejected the plea of 1 Amrit Pal Singh, a resident of Hong Kong for the previous 17 years, being probed by the Enforcement Directorate.
As per info, Singh’s firm acquired fraudulent overseas outward remittances amounting to USD 2,880,210 (roughly INR 20.75 crores), originating from Indian shell entities.
He sought anticipatory bail on the bottom that the check laid down by the Supreme Court docket in Vijay Madanlal Choudhary v. Union of India (2023) was not glad as he was neither booked beneath the scheduled offence nor any proceeds of crime had been attributable to him.
In Vijay Madanlal Choudhary (supra), the Supreme Court docket had noticed on establishing the next foundational info, a authorized presumption of fee of money-laundering would come up:
“First, that the felony exercise referring to a scheduled offence has been dedicated. Second, that the property in query has been derived or obtained, immediately or not directly, by any particular person on account of that felony exercise. Third, the particular person involved is, immediately or not directly, concerned in any course of or exercise linked with the mentioned property being proceeds of crime.”
Within the case at hand, the Petitioner contended that he was neither named within the predicate offence nor conscious of any illegality within the remittances made to his firm.
The Excessive Court docket famous that although the Petitioner shouldn’t be named within the predicate FIR, ED had attributed a portion of proceeds to his firm.
“By way of Part 24 of the PMLA, a statutory presumption arises as soon as it’s proven that an individual is in possession of property linked with a scheduled offence. It’s for the applicant to rebut the presumption by demonstrating that such proceeds are untainted. At this stage, no materials has been positioned on report to displace the statutory presumption,” it noticed.
The Petitioner then contended that the transaction was a bona fide enterprise deal.
At this juncture, the Excessive Court docket held, “The reliance positioned by the applicant on Vijay Madanlal Choudhary v. Union of India, (supra), is misplaced, as the choice doesn’t exempt overseas recipients from scrutiny merely by asserting contractual legitimacy within the face of sturdy allegations of layered cash laundering.”
Additional noting that Petitioner had ignored summons, Court docket mentioned presumption of bona fides important for in search of anticipatory bail stood undermined and ED’s apprehension that he poses a flight threat shouldn’t be with out advantage.
As such, it denied him anticipatory bail.
Look: Ms. Anjali Jha Manish, Mr. Priyadarshi Manish, Ms. Madhuri Malegaonkar and Mr. Paras Aneja, Advs for Petitioner; Mr. Zoheb Hossain, Spl. Counsel, Mr. Vivek Gurnani, Panel Counsel with Mr. Kartik Sabharwal, Mr. Kanishk Maurya, Mr. Pranjal Tripathi, Mr. Anand Khatri & Ms. Ilma Khan, Advs for Respondents
Case title: Amrit Pal Singh v. ED
Case no.: BAIL APPLN.1322/2025