Delhi High Court Restrains Operation Of Indian Bank Accounts Of Former Canadian Officials, Allows ₹65.9 Crore Remittance To Government Of Canada In Alleged Public Funds Diversion Case
The Delhi High Court has passed an interim order restraining two former Canadian public officials from operating their Indian bank accounts, while allowing the transfer of ₹65.9 crores to the Government of Canada. The order was passed in a civil suit filed under Section 84 CPC by the Canadian government alleging diversion of public funds and illegal kickbacks received during the execution of two public schemes.
A Single Bench of Justice Manmeet Pritam Singh Arora directed, “Defendant Nos. 1 and 2 are restrained from transacting from their Indian bank accounts until the final disposal of this application… Defendant No. 1 will be entitled to operate the accounts only to the limited extent of remitting Rs. 65.9 crores to the Plaintiff and for paying legal fees.”
The Court added, “In view of the submissions of counsel for the Defendant No. 1 and the Defendant No.1 himself who appeared through Video Conferencing Link, the Defendant No.5/IndusInd and Defendant No.10/RBL are directed to co- operate with the Defendant No.1 in getting the KYC compliance done within two (2) weeks qua the bank accounts held in the name of Defendant No.1 in their respective banks… After the above said KYC compliance is done, Defendant No. 5 and Defendant No. 10 are further directed to remit an amount to the tune of Rs. 65.9 Crores in the bank account of the Crown/Plaintiff in accordance with applicable law/rules.”
Senior Advocate Arvind Nayar appeared for the Plaintiff, while Advocate Arindam Ghosh represented the Respondents.
Brief Facts
The Government of Canada filed a civil suit under Section 84 of the Code of Civil Procedure seeking recovery of misappropriated public funds, a permanent injunction, and rendition of accounts. The Plaintiff alleged that Defendant No. 1, a former senior civil servant in Canada’s Ministry of Education, along with Defendant No. 2, devised a scheme to embezzle large amounts from the Canadian treasury.
It was submitted that Defendant No. 1 exploited his position during the administration of two programs, the “Support for Families Program” (SFFP) and an IT consultancy procurement scheme. In the first, he allegedly diverted benefits meant for families impacted by the COVID-19 pandemic to himself by generating and processing fraudulent applications. In the second, he was accused of collecting kickbacks from vendors in exchange for contract approvals.
The Plaintiff stated that civil proceedings against both defendants were pending before the Ontario Superior Court of Justice, and that the Canadian court had already issued a worldwide Mareva injunction prohibiting dissipation of assets. Based on material filed before the Canadian court, it was alleged that public money siphoned off by the defendants was transferred to Indian bank accounts held solely or jointly by them.
It was further submitted that accounts with IndusInd Bank (Defendant No. 5) and RBL Bank (Defendant No. 10) held amounts of ₹38.3 crores and ₹29 crores respectively. Counsel for Defendant No. 1 stated that his client would assist with KYC compliance to enable the accounts to be reactivated for purposes of remittance.
The Plaintiff sought urgent relief to prevent dissipation of those assets and to ensure that ₹65.9 crores lying in two Indian banks could be transmitted back to Canada.
Reasoning of the Court
The Court recorded that Defendant No. 1 had appeared virtually and his counsel submitted that he had no objection to the injunction being granted in respect of the bank accounts listed, Defendant No. 2 also appeared through counsel and confirmed the same.
The Court observed, “Defendant No.1 has no objection to the operation of bank accounts enlisted at paragraphs ‘100’ and paragraph ‘152’ of the plaint being injuncted.”
The Court noted, “There is an amount of Rs. 38.3 crores, which is lying deposited in Defendant No. 5 bank and Rs. 29 crores in Defendant No. 10 bank… Defendant No. 1 has no objection if Defendant No. 5 and Defendant No. 10 remit the amounts… directly to the Crown/Plaintiff…”
Accordingly, the Court directed IndusInd Bank and RBL Bank to complete all required formalities within two weeks and to remit the total amount of ₹65.9 crores to the Plaintiff’s designated bank account, subject to compliance with Canadian banking details being provided.
The Court directed, “Defendant Nos. 1 and 2 are restrained from transacting from their Indian bank accounts until the final disposal of this application… Defendant No. 1 will be entitled to operate the accounts only to the limited extent of remitting Rs. 65.9 crores to the Plaintiff and for paying legal fees.”
The Court clarified that any future withdrawal for legal fees would be permitted only upon submission of supporting invoices and directions from the Court.
Summons in the suit were issued, and pleadings directed to be completed within six weeks.
Cause Title: Government of Canada v. Sanjay Madan & Ors. (CS(OS) 379/2025)
Appearance:
Plaintiff: Senior Advocate Arvind Nayar; Advocates Shashank Verma, Sooraj Sharma, Vipul Agrawal
Defendants: Advocates Arindam Ghosh, Amrita Grover, Sharanya Bhatnagar, Ateev Kumar Mathur, Amol Sharma, Anand Varma, Apoorva Pandey, Siddarth Dutta, Sanjeet Malik, Pratyush Singh, Nidhi Vardhan, Nisha Sharma
