Neeraj Chauhan vs. Directorate Of Enforcement

$~
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment reserved on: 23.04.2026

Judgment pronounced on: 04.05.2026
+ BAIL APPLN. 4618/2024, CRL.M.A. 37776/2024, CRL.M.(BAIL)
2134/2024 & 2360/2025

PRAVEZ KHAN .....Petitioner
Through: Mr. Madhav Khurana, Sr. Advocate
Mr. Rohan Wadhwa, Mr. Arun
Kanwa, Mr. Amit Badsera, Mr. Sagar
Suri, Mr. Vittal B., Mr. Varun Rawat,
Mr. Lakshay Sahrawat and Mr. Alok
Kumar, Advocates.

versus


DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Arkaj Kumar, Standing Counsel
with Mr. Aakarsh Mishra, Mr. Karsh
Sarosh Rebelo and Ms. Bhavna
Gandhi, Advocates.
IO/Assistant Director Parveen Yadav
in person.

+ BAIL APPLN. 4787/2024
NEERAJ CHAUHAN .....Petitioner
Through: Mr. Ankit Verma, Mr. Arvind
Mishra, Mr. Ved Prakash Verma, Mr.
D. Kumar and Mr. Sachin Verma,
Advocates.


versus


DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Arkaj Kumar, Standing Counsel
with Mr. Aakarsh Mishra, Mr. Karsh
Sarosh Rebelo and Ms. Bhavna
Bail Applications 4618/2024 & connected matters Page 1 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
Digitally Signed KATHPALIA
Date: 2026.05.04 17:26:24 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

Gandhi, Advocates.
IO/Assistant Director Parveen Yadav
in person.
+ BAIL APPLN. 2928/2025 & CRL.M.A. 22736/2025
RAJESH KUMAR .....Petitioner
Through: Mr. Sanjeevi Seshadri, Advocate.


versus

DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Arkaj Kumar, Standing Counsel
with Mr. Aakarsh Mishra, Mr. Karsh
Sarosh Rebelo and Ms. Bhavna
Gandhi, Advocates.
IO/Assistant Director Parveen Yadav
in person.
+ BAIL APPLN. 3057/2025
SURAJ SHAT .....Petitioner
Through: Mr. Nishant Tyagi, Advocate
( through video conferencing )
versus

DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Arkaj Kumar, Standing Counsel
with Mr. Aakarsh Mishra, Mr. Kaksh
Sarosh Rebelo and Ms. Bhavna
Gandhi, Advocates.
IO/Assistant Director Parveen Yadav
in person.

+ BAIL APPLN. 4935/2025, CRL.M.A. 38083/2025 &
CRL.M.(BAIL) 672/2026


LOVEE NARULA .....Petitioner
Through: Mr. Arup Sinha, Mr. Saquib Mukhtar,
Ms. Arham Tanvir and Mr. Shivam
Srivastva, Advocates.
Bail Applications 4618/2024 & connected matters Page 2 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3962
c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b40f8
0cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:26:03 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

versus

DIRECTORATE OF ENFORCEMENT .....Respondent
Through: Mr. Arkaj Kumar, Standing Counsel
with Mr. Aakarsh Mishra, Mr. Karsh
Sarosh Rebelo and Ms. Bhavna
Gandhi, Advocates.
IO/Assistant Director Parveen Yadav
in person.

CORAM:
HON'BLE MR. JUSTICE GIRISH KATHPALIA


C O M M O N J U D G M E N T





PRELUDE

A. This common judgment must commence taking it on record a deeply
disturbing prelude. In the course of arguments on these bail applications,
which continued marathon on day to day basis, a series of articles were
published in the front page of Indian Express on four consecutive days.
Those articles were not confined to reportage of the offences in connection
whereof these bail applications were filed. Those articles, rather transgressed
all permissible bounds by purporting to anticipate and answer queries which
were raised by this court to the counsel for the Directorate of Enforcement
(hereinafter referred to as “ED”). More egregiously, those articles laid bare
the WhatsApp chats allegedly exchanged between the accused/applicants
inter se , without the slightest attempt at redaction or anonymisation.

B. Keeping in mind the stage at which those articles were published,
contents whereof, more or less answering the questions put by the court to
Bail Applications 4618/2024 & connected matters Page 3 of 42 pages

GIRISH
KATHPALIA
Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af39
62c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b4
0f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:25:40 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

learned counsel for ED, coupled with the fact that the FIR of the alleged
predicate offence was registered way back in the month of March 2024 and
all accused/applicants have already been granted bail in the predicate
offence, so there was no occasion for publication of those articles now in the
second quarter of 2026, I am unable to convince myself that the same were
innocent publication. However, at present juncture, owing to want of cogent
material, this court would refrain from returning any definitive finding of
culpability against the ED or the accused/applicants or the newspaper.

C. At the same time, the implications of such publications are profoundly
alarming. If the said series of articles published for four consecutive days
when day to day arguments were being heard, was engineered directly or
indirectly at the instance of any arm of the State, with a view to influence,
overawe or subtly condition the judicial mind, the same would strike at the
very roots of the Rule of Law. Such conduct would be not just deplorable,
but also amount to grave and impermissible assault on the independence of
the judiciary and sanctity of the adjudicatory process. The spectre of
proceedings being sought to be influenced through media use of such nature
is not just unacceptable but deeply disquieting and must be unequivocally
deprecated.

D. As is obvious, no court would get influenced with such write-ups
while adjudicating. For, our minds across decades of work experience are
attuned to be phlegm to such efforts. The purpose of above narration is to
put across a word of caution so that such act is not repeated in future.

Bail Applications 4618/2024 & connected matters Page 4 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:25:17 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

PREFACE

1. These five applications seeking regular bail in case ECIR/DLZO-
II/03/2024 dated 16.03.2024 under Sections 3 and 4 of the Prevention of
Money Laundering Act (hereinafter referred to as “PMLA”) are taken up
together for disposal.

1.1 These bail applications were listed before the predecessor benches for
hearing for the first time in the months of December 2024 ( with respect to
two accused/applicants ), August 2025 ( with respect to two
accused/applicants ) and December 2025 ( with respect to one
accused/applicant ). The applications remained pending before different
benches and finally as a part of 179 such old pending bail applications, these
bail applications also were transferred to this bench.

1.2 I heard learned senior counsel and learned counsel for all
accused/applicants, as well as learned standing counsel for the Directorate of
Enforcement (ED).

PROSECUTION CASE

2. Broadly speaking, prosecution case as set up in the prosecution
complaint of ED is as follows.

2.1 On 09.03.2024, a secret information was received by the Crime
Branch, Delhi Police about a syndicate of criminals involved in manufacture
Bail Applications 4618/2024 & connected matters Page 5 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569
af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557099
6b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:25:00 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

and sale of spurious medicines, which are used in treatment of cancer. The
secret informer intimated that the accused persons namely Viphil Jain and
Suraj Shat were coming to Moti Nagar to supply the spurious medicines and
injections; and that the co-accused persons namely Komal Tiwari, Tushar
Chauhan, Pravez Khan and Neeraj Chauhan also could be nabbed from
different places of Delhi and NCR region, if simultaneously raided.

2.2 On the basis of the said secret information, six teams of Delhi Police
were constituted and were assigned specific locations to raid simultaneously.
At about 11:00am, one of those police teams reached the Capital Greens,
DLF Moti Nagar, Delhi, where after the necessary verification and
identification of the place of manufacturing and the suspects, a team of the
Drug Inspector was contacted. At about 02:30pm the joint team of Delhi
th
Police and Drug Inspector raided a flat on 11 Floor of the Capital Greens,
Moti Nagar. The accused persons Viphil Jain and Suraj Shat were found
residing and present there. Those two accused persons were found filling
and capping the empty vials labelled as Nibolumab (Opdyta) and
Pembrolizumab injections (Keytruda). On being called upon, the said two
accused persons failed to produce any drug license authorising them to
manufacture for sale or for distribution of the said drugs for sale in respect
to the raided flat. The said two accused persons also failed to produce
purchase bills of various drugs and items found stocked in the said flat. The
raiding team sealed the incriminating material and seized the same.

2.3 On the basis of the aforesaid, FIR No.59/2024 was registered by PS
Crime Branch of the Delhi Police for offences under Sections
Bail Applications 4618/2024 & connected matters Page 6 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569
af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557099
6b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:24:39 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

274/275/276/420/468/471/120B and 34 IPC on 12.03.2024 against the said
two accused persons namely Viphil Jain and Suraj Shat, alleging that for
manufacture of spurious medicines co-accused Viphil Jain used to procure
empty vials from the present applicant Pravez Malik; and that the spurious
medicines were sold to the cancer patients by the remaining accused
persons.

2.4 After completion of investigation, the Crime Branch, Delhi Police
filed chargesheet dated 08.05.2024 before the magisterial court, naming the
applicant Pravez Khan @ Pravez Malik also as an accused.

2.5 The offences under Section 120B, 420 and 471 IPC being the
Scheduled offences under the Prevention of Money Laundering Act
(PMLA), the Directorate of Enforcement (ED) registered the Enforcement
Case Information Report (ECIR) dated 16.03.2024 for offence under Section
3 PMLA, punishable under Section 4 PMLA.

2.6 During investigation under PMLA, multiple searches under Section
17 PMLA were carried out at different premises connected with the accused
persons and that led to recovery and seizure of various incriminating
documents as well as cash Indian currency to the total tune of Rs.
70,50,000/-. The scrutiny of bank accounts held by the accused persons and
their family members, coupled with their statements under Section 50
PMLA revealed the offence committed by them.

2.7 Further investigation culminated into a supplementary prosecution
Bail Applications 4618/2024 & connected matters Page 7 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec4556
9af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d155709
96b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:24:22 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

complaint under Section 44 PMLA, which was filed before the court of
competent jurisdiction against 16 accused persons. The learned Special
Court took cognizance on 21.09.2024.

ROLES ASCRIBED

2.8 The role ascribed to the applicant Pravez Khan is that being close
associate of the co-accused Viphil Jain, he used to supply empty vials to co-
accused Viphil Jain for being filled with spurious Keytruda to be used for
cancer treatment; and those vials were used by Viphil Jain and the applicant
Suraj Shat for refilling, relabeling and sale in the open market. The applicant
Pravez Khan was earning Rs.500/- to Rs.700/- per empty vial of Keytruda
injection. In this manner, the applicant Pravez Khan received Rs.2,50,000/-
in his ICICI Bank account on 28.09.2023 from the bank account of one co-
accused Aditya Krishna, which amount was explained by the applicant
Pravez Khan as loan received by him from Aditya Krishna, arranged by
Viphil Jain, and paid back according to the applicant Pravez Khan in cash,
but without any debit entry in the bank account.

2.9 The role ascribed to the applicant Neeraj Chauhan is that he misused
his professional experience in Oncology and Pharmacy, coupled with his
involvement with two business entities engaged in the healthcare sector; and
he facilitated procurement and distribution of the empty vials. During the
year 2023 and till February 2024, the applicant Neeraj Chauhan collaborated
with staff of two cancer hospitals and misappropriated vials of the empty
cancer medicines and passed on those vials to buyers including Aditya
Krishna in Muzafarpur, Bihar and others in Pune, Mumbai and other States.
Bail Applications 4618/2024 & connected matters Page 8 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec4556
9af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570
996b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:24:05 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

The proceeds of crime so generated through sale of spurious medicines by
the co-accused persons were transferred through Hawala transactions to the
Axis Bank account of the applicant Neeraj Chauhan, the Bank of Baroda
bank account of the co-accused Tushar Chauhan and the IDBI bank account
of co-accused Deepali Jain. The applicant Neeraj Chauhan supplied the
spurious medicines to the accused persons namely Aditya Krishna, Lovee
Narula, Akshay Kumar and Rajesh Kumar.

2.10 The role ascribed to the applicant Suraj Shat is that during the raid,
he along with the co-accused Viphil Jain, was found filling the empty vials
of Opdyta and Keytruda with the liquid Fluconazole injection and Dextrose
with needle and syringe, followed by sealing the vials with the sealing and
capping machine, but neither of them could produce drug license authorising
them to manufacture those drugs; and neither of them could produce any
purchase records of various drugs and items stocked in the premises raided
by the Crime Branch. A substantial part of the cash received by the applicant
Suraj Shat was deposited by him in his bank account and then transferred to
the bank accounts of the co-accused Viphil Jain and family members.
According to the investigations, more than Rs.51,00,000/- in cash were
transferred in the bank account of applicant Suraj Shat. In the course of the
raid, cash amount of Rs.23,00,000/- was found concealed in a bin bag in the
residence of the applicant Suraj Shat and the same was seized as proceeds of
crime because he could not explain source of the same.

2.11 The role ascribed to the applicant Lovee Narula is that as a close
associate of the co-accused Viphil Jain, he was actively involved through
Bail Applications 4618/2024 & connected matters Page 9 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45
569af3962c6fb4835d435f97626cacca,
ou=HIGH COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557
0996b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:23:49 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

medical business of his family since the year 2020 and his bank account
statements reflected unexplained debits to the tune of Rs.30,00,000/-
transferred to the co-accused Viphil Jain. The applicant Lovee Narula was
instrumental in establishing the contact of the co-accused Viphil Jain with
the customers and thereby actively generating the proceeds of crime. The
applicant Lovee Narula was found actively involved in medical business
established by his family through two business entities, out of whom one is a
leading distributor and seller of anti cancer drugs in Delhi and other parts of
the country. The applicant Lovee Narula had an enormous patient base, who
needed anti cancer drugs and trusted his family companies. The applicant
Lovee Narula also purchased Keytruda injections from the applicant Neeraj
Chauhan without bills and made payments in the bank accounts of the
applicant Neeraj Chauhan and co-accused Tushar Chauhan. In this process
of obtaining spurious medicines worth Rs.85,99,000/- from the applicant
Neeraj Chauhan and selling the same in open market, the applicant Lovee
Narula generated for himself the proceeds of crime to the tune of
Rs.7,45,000/-.

2.12 The role ascribed to the applicant Rajesh Kumar is that he obtained
the spurious anti cancer medicines, especially Keytruda injections from the
applicant Neeraj Chauhan without bills or any supporting documents against
payments made in cash and through bank accounts held by the applicant
Neeraj Chauhan and the co-accused Tushar Chauhan. The applicant Rajesh
Kumar facilitated sale of the spurious anti cancer medicines in open market
at inflated price, thereby generating proceeds of crime.


Bail Applications 4618/2024 & connected matters Page 10 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:23:30 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

ARGUMENTS ADVANCED

3. Against the above backdrop, arguments on behalf of each of the
accused/applicants were heard. Learned senior counsel on behalf of
accused/applicants Lovee Narula and Pravez Khan, and learned counsel on
behalf of the remaining accused persons addressed arguments at length,
followed by arguments advanced by learned standing counsel for ED and
ultimately the rebuttal arguments on behalf of all accused persons.

3.1 Learned senior counsel for applicant Lovee Narula argued as follows.
The applicant Lovee Narula is not named in the FIR or even the prosecution
complaint. Initially, the applicant Lovee Narula was called as a witness by
the ED and even his statement was recorded on 05.04.2024, after which a
raid was carried out at his residence, but nothing incriminating was
recovered. The only reason advanced as per records by ED for arresting the
applicant Lovee Narula was that he did not provide information regarding
certain transactions. The only role ascribed to the applicant Lovee Narula is
that he purchased the injections and sold the same in the market, which is
not an offence. According to the applicant Lovee Narula, he had no
knowledge that those injections contained spurious drug, so he administered
the same even to his father.

3.2 On behalf of applicant Pravez Khan, the learned senior counsel argued
as follows. Unlike the remaining accused persons, he did not file any regular
bail application earlier and duly surrendered after availing the interim bail.
The role ascribed to the applicant Pravez Khan is only that he supplied
Bail Applications 4618/2024 & connected matters Page 11 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569
af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d155709
Digitally Signed
96b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Date: 2026.05.04 17:23:12 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

empty vials and even the alleged proceeds of crime are only Rs.2,50,000/-;
and even that amount was earned by him much prior to the alleged
commission of the scheduled offence, therefore, the twin conditions
contemplated under Section 45 PMLA shall not operate against him. The
facts alleged against the applicant Pravez Khan at the most show it to be a
case of preparation to commit offence, which in itself is not an offence. The
other accused persons, to whom similar role has been ascribed, have not
been arrested. Since the applicant Pravez Khan has spent more than one year
in jail and trial is likely to take long time, the applicant deserves to be
released on bail. Lastly, since grounds of arrest have not been supplied to the
applicant Pravez Khan, he deserves to be granted bail. Taking me through
records, learned senior counsel for the applicant Pravez Khan elaborated his
argument that in order to label the earnings as proceeds of crime, the same
should be subsequent to the alleged commission of the scheduled offence,
and since in the present case, earnings of the applicant Pravez Khan referred
to by the ED came prior to even procurement of capping machines, the same
could not be labelled as proceeds of crime. According to the applicant
Pravez Khan, he had supplied empty vials to the co-accused Viphil Jain
under an impression conveyed to him that clients of Viphil Jain would be
able to raise insurance claims on the basis of empty vials. It was also
elaborated by learned senior counsel that since co-accused Komal Tiwari
and Abhinay, who have been ascribed same role as of the applicant Pravez
Khan have not been arrested, the applicant Pravez Khan deserves at least
now to be released on bail. It was argued that Section 3 of PMLA stipulates
requirement of knowledge with the accused but in the present case, there is
nothing to show that the applicant Pravez Khan knew that the vials would be
Bail Applications 4618/2024 & connected matters Page 12 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3962
c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b40f
80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:22:56 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

used for making spurious drugs and not for insurance claims. Since by the
time the empty vials were supplied by the applicant Pravez Khan, capping
machine was yet to be received, the entire matter was at the stage of
preparation only, which is no offence. Learned senior counsel for applicant
Pravez Khan also contended that since the amount allegedly recovered from
the applicant was less than Rs.1,00,00,000/-, proviso to Section 45 PMLA
comes into play and the twin conditions are not applicable. Learned senior
counsel also referred to the co-accused Sajid, Majid, Rohit, Abhinay,
Jitender and Komal, pointing out that none of them were arrested though the
roles ascribed to them are either graver than or at least similar to that of the
applicant Pravez Khan. Lastly, it was submitted by learned senior counsel
that since the applicant Pravez Khan is in jail for past 15 months, he
deserves to be released on bail.

3.3 Regarding the applicant Neeraj Chauhan, learned counsel contended
that all medicines sold by him were original and genuine. It was contended
that no panchnama was prepared and the applicant denies recovery of any
cash amount, be it in INR or USD, from him. Learned counsel also argued
that none of the persons who bought medicines from the applicant Neeraj
Chauhan lodged any complaint with any authority alleging the same to be
spurious. It was argued that since seven accused persons already stand
released on bail and six accused persons were not even arrested, the
applicant Neeraj Chauhan deserves bail, especially because he is in jail for
past two years.

3.4 Learned counsel for applicant Rajesh Kumar contended that the
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Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af
3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:22:40 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

applicant is at the bottom of the pyramid in the sense that he is just a partner
of the retailer M/s Delhi Medicine Hub. It was also argued that the applicant
Rajesh Kumar administered the same medicines to his father, which shows
that he was never aware that the vials contained spurious drugs. It was
argued that there is no evidence to show that the applicant Rajesh Kumar or
the Delhi Medicine Hub sold any spurious drug to anyone. Learned counsel
submitted that the applicant Rajesh Kumar was not even named in the
predicate offence, so there is no reason to keep him in jail, especially
because he has already suffered incarceration for more than 500 days.

3.5 Learned counsel for applicant Suraj Shat argued that the applicant is
th
just 10 standard qualified with no medical background and was only an
employee of co-accused Viphil Jain at a monthly salary of Rs.30,000/-.
Learned counsel submitted that no proceeds of crime were received by the
applicant Suraj Shat.

3.6 In response, learned standing counsel for ED argued that in view of
seriousness of the charge, none of the accused/applicants deserves to be
released on bail. It was contended on behalf of ED that the applicant Pravez
Khan is a degree holder in pharmacology and was engaged in collecting
empty vials through co-accused Komal and Abhinay from cancer hospitals.
It was submitted that co-accused Komal and Abhinay were under mistaken
belief that the empty vials were to be used for raising insurance claims.
Learned counsel for ED took me through elaborate statements of each of the
accused/applicants recorded under Section 50 PMLA, in which each of them
admitted the roles played by them respectively. As regards the proviso to
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DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569
af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557099
6b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:22:24 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

Section 45 PMLA, learned counsel argued that it is not just the individual
accused, but all the accused/applicants along with all co-accused persons,
whose proceeds of crime have to be considered collectively in order to
ascertain applicability of exception from the twin conditions of Section 45
PMLA; in the present case, the proceeds of crime generated by the accused
persons collectively was more than Rs.3,00,00,000/-. It was argued that
regarding origin of proceeds of crime, presumption under Section 23/24
PMLA would arise. Learned counsel for ED contended that since Section 3
PMLA contemplates not just acquisition of proceeds of crime, the argument
of accused/applicants that the case was at only the preparatory stage would
be irrelevant. Regarding the argument of selective arrests, learned counsel
for ED contended that since some of the accused persons cooperated and
disclosed the relevant information, it was prerogative of the IO not to arrest
them under Section 19 of PMLA. Since all accused persons are pharmacists,
according to learned counsel for ED, it cannot be said that they were
unaware about spuriousness of the subject drugs, more so in view of cost
disparity between the subject drugs and the genuine drugs available in
market. Since all accused/applicants were aware that they were purchasing
the drugs without invoices and against cash payments, it cannot be said that
they were unaware about spuriousness of those drugs. It was also argued that
the applicant Neeraj Chauhan received a sum of Rs.35,00,000/- from a
doctor in Nepal through hawala transaction regarding which a parallel FIR
has been registered in Nepal and Letter Rogatory has already been issued.
Learned counsel for ED submitted that they need at least 06 months to
complete the pending investigation because the cash/ hawala trail has to be
unearthed. Learned counsel for ED also contended that it is the
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KATHPALIA
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2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3962c6
fb4835d435f97626cacca, ou=HIGH COURT OF DELHI,CID -
7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b40f80c
bd2eee60402c487965ff801e26fa, cn=GIRISH KATHPALIA
Date: 2026.05.04 17:22:06 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

accused/applicants who are not interested in speedy trial because they took
adjournment in order to file reply to the application of ED for day to day
trial; and also because the accused/applicants have been challenging every
order. It was argued with strong emphasis that since bail applications of the
applicants Lovee Narula and Rajesh Kumar were dismissed by a coordinate
bench of this court, which order was not unsettled by the Supreme Court in
SLP, now this court cannot take a different view.

3.7 In rebuttal arguments, learned senior counsel for applicant Lovee
Narula reiterated that the applicant was only a witness and was neither
named as accused in the predicate offence nor any money or any other
incriminating article was recovered from him, so he deserves bail. It was
also argued that Gagan Khurana, against whom the allegations are similar to
those against the applicant Lovee Narula and even a sum of Rs.5,00,000/-
was recovered from Gagan Khurana, he has not even been named as
accused. Similarly, Sheetal Pandey and Ayonij Jain, who also had role
similar to the applicant Lovee Narula were not even named as accused.
Learned senior counsel made clear that the drug sold at cheaper rates was
Opdyta, which was found genuine in all vials after forensic analysis.
Learned senior counsel for the applicant Lovee Narula argued that since the
SLP against rejection of bail applications of the applicants Lovee Narula and
Rajesh Kumar were dismissed in limine , this court can certainly take a
contrary view.

3.8 In rebuttal arguments, learned senior counsel for the applicant Pravez
Khan contended that the ED should have independently investigated if the
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DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af
3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Date: 2026.05.04 17:21:50 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

drugs in question were actually spurious or not, but that was not done.
Learned senior counsel also submitted that despite having received the
forensic report on 27.05.2024 regarding analysis of the allegedly recovered
drugs, the ED has not placed the same on record and that report would show
that the vials, except a few, contained genuine drugs.

3.9 In rebuttal arguments, learned counsel for accused/applicants Rajesh
Kumar, Neeraj Chauhan and Suraj Shat reiterated their arguments recorded
above and highlighted the long period of their incarceration as ground for
being released on bail.

3.10 During arguments, both sides referred to a number of judicial
precedents, which are discussed hereafter.

LEGAL POSITION qua TWIN CONDITIONS

4. On the issue of anticipatory bail sought in cases under PMLA, I had
occasion to examine the legal position in the case of Bhaskar Yadav vs
Directorate of Enforcement, 2026:DHC:813 decided on 02.02.2026. The
judgment in the said case on being challenged by way of SLP No.2894/2026
was upheld by the Supreme Court. For convenience of reference, the legal
position as discussed in Bhaskar Yadav (supra) is extracted below:

“4. In cases arising out of PMLA, grant or denial of bail and
anticipatory bail is dealt with under Section 45 of the Act, which
mandates the court dealing with the bail application to grant
opportunity to the prosecutor to oppose the bail application; and
the provision further lays down the twin test, on the anvil whereof,
the case has to be tested before granting bail. The said twin test to
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DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af
3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
Digitally Signed KATHPALIA
Date: 2026.05.04 17:21:33 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

allow bail to a person accused of an offence of money laundering is
that there should be reasonable grounds to believe that the accused
is not guilty of the offence of money laundering, and that the
accused is not likely to commit any offence while on bail. The
proviso to Section 45 of the Act confers discretion on the special
court constituted under PMLA to admit on bail an accused, who is
under the age of sixteen years or is a woman or sick or infirm or
where the allegation is of money laundering of a sum less than one
crore rupees. The provision under Section 45 of PMLA is couched
in negative expression and begins with non-obstante clause that
notwithstanding anything contained in the Code of Criminal
Procedure, no person accused of an offence under the Act shall be
released on bail or on his own bond. Such unusual negative
expression, coupled with non-obstante qua Criminal Procedure
Code while dealing with the issue of bail under PMLA clearly
shows the legislative intent that in such cases, bail is not to be dealt
with in routine manner solely on the basis of parameters applicable
in conventional offences. The provision further stipulates: “unless”
the Public Prosecutor has been given opportunity to oppose such
release and where the Public Prosecutor opposes the application,
the court is satisfied that there are reasonable grounds for
believing that the person accused of an offence under the Act is not
guilty of such offence and he is not likely to commit any offence
while on bail. The blanket of those twin conditions is partially lifted
by way of the proviso in order to deal with an accused, who is
under 16 years of age or is a lady or sick or infirm or has been
accused of money laundering for a sum less than one crore rupees.
But that proviso is not relevant for present purposes.

4.1 The broad principles to be kept in mind while dealing with an
application for grant of anticipatory bail in cases arising out of
PMLA, as culled out of plethora of judicial pronouncements are as
follows. While considering such applications, the court is not
expected to delve deep into merits of the allegation by microscopic
analysis of the material collected by the investigator; the court has
to satisfy itself only as regards existence of prima facie case, based
on broad probabilities discernible from the material collected by
the investigator; and the question has to be as to whether on the
basis of such material, there are reasonable grounds for believing
that the accused is not guilty of the offence alleged. The court is
also to satisfy itself as regards any likelihood of the accused
committing any offence while on bail; and this assessment can be
based on the antecedents and propensities of the accused, as well
as nature and the manner in which he is alleged to have committed
the offence under PMLA. To add a piece of caution, the court is not
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DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569
af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557099
6b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:21:20 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

required to return a positive finding that the accused did not
commit the alleged offence. A delicate balance has to be
maintained between the final judgment of acquittal or conviction
and an order granting or denying bail. The twin conditions
stipulated under Section 45 of the Act would apply to anticipatory
bail application also, in addition to the regular parameters like
nature of accusation, severity of punishment, nature of material
collected by investigator, reasonable apprehension of tampering
with the witnesses, reasonable possibility of securing presence of
the accused at the time of trial, character of the accused and larger
interest of public or State, etc.

xxx

4.4 I had an occasion to examine and deal with the provision under
Section 45 PMLA in the case of Vedpal Singh Tanwar vs
Directorate of Enforcement, 2025 SCC OnLine Del 4330 in which,
I briefly traversed through the legal position as follows:

“9.1 In the case of Vijay Madanlal Chaudhary [2022
SCC OnLine SC 929], the Supreme Court traversed
through the laudable purpose behind enactment of the
PML Act and observed thus:
“Considering the purposes and objects of the
legislation in the form of 2002 Act and the
background in which it had been enacted owing to
the commitment made to the international bodies
and on their recommendations, it is plainly clear
that it is a special legislation to deal with the subject
of money laundering activities having transnational
impact on the financial systems including
sovereignty and integrity of the countries. This is
not an ordinary offence. To deal with such serious
offence, stringent measures are provided in the 2002
Act for prevention of money laundering and
combating menace of money-laundering, including
for attachment and confiscation of proceeds of crime
and to prosecute persons involved in the process or
activity connected with the proceeds of crime. In
view of the gravity of the fallout of money
laundering activities having transnational impact, a
special procedural law for prevention and
regulation, including to prosecute the person
involved, has been enacted, grouping the offenders
involved in the process or activity connected with the
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Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3962
c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b40f8
0cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA Date: 2026.05.04 17:21:04 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

proceeds of crime as a separate class from ordinary
criminals. The offence of money-laundering has
been regarded as an aggravated form of crime
“world over”. It is, therefore, a separate class of
offence requiring effective and stringent measures to
combat the menace of money laundering.
xxxxx
Thus, it is well settled by the various decisions of
this Court and policy of the State as also the view of
international community that the offence of money-
laundering is committed by an individual with a
deliberate design with the motive to enhance his
gains, disregarding the interests of nation and
society as a whole and which by no stretch of
imagination can be termed as offence of trivial
nature. Thus, it is in the interest of the State that law
enforcement agencies should be provided with a
proportionate effective mechanism so as to deal with
these types of offences as the wealth of the nation is
to be safeguarded from these dreaded criminals. As
discussed above, the conspiracy of money-
laundering, which is a three-staged process, is
hatched in secrecy and executed in darkness, thus, it
becomes imperative for the State to frame such a
stringent law, which not only punishes the offender
proportionately, but also helps in preventing the
offence and creating a deterrent effect.
xxxxx
The Court while dealing with the application for
grant of bail need not delve deep into the merits
of the case and only a view of the Court based on
available material on record is required. The
Court will not weigh the evidence to find the guilt
of the accused which is, of course, the work of
Trial Court. The Court is only required to place
its view based on probability on the basis of
reasonable material collected during
investigation and the said view will not be taken
into consideration by the Trial Court in recording
its finding of the guilt or acquittal during trial
which is based on the evidence adduced during
the trial….. the words used in Section 45 of the

2002 Act are “reasonable grounds for believing”
which means the Court has to see only if there is
a genuine case against the accused and the
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GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:20:49 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

prosecution is not required to prove the charge
beyond reasonable doubt. ”
(emphasis supplied)

9.2 There is plethora of judicial pronouncement, not being
repeated herein for brevity that existence of the twin
conditions stipulated under Section 45 of the PML Act is
mandatory before the court exercises discretion to release
on bail a person accused of the offence of money
laundering; and that the belief qua the accused being
guilty of money laundering has to be tested on
“reasonable grounds”, which means something more than
“prima facie” grounds. Equally well settled is the scope of
Section 24 of the PML Act that unless contrary is proved,
the Court shall presume involvement of proceeds of crime
in money laundering; and that burden to prove that the
proceeds of crime are not involved is on the accused.

9.3 Further, it is trite that economic offences constitute an
altogether distinct class of offences. That being so, in spite
of the salutary doctrine of “bail is the rule and jail is an
exception”, matters of bail in cases involving socio-
economic offences have to be visited with a different
approach, as held in State of Bihar & Anr. vs Amit Kumar
(2017) 13 SCC 751.

9.4 As held by the Supreme Court in the case of Y.S.Jagan
Mohan Reddy vs CBI , (2013) 7 SCC 439:

“15) Economic offences constitute a class apart and
need to be visited with a different approach in the
matter of bail. The economic offence having deep
rooted conspiracies and involving huge loss of
public funds needs to be viewed seriously and
considered as grave offences affecting the economy
of the country as a whole and thereby posing serious
threat to the financial health of the country.
16) While granting bail, the court has to keep in
mind the nature of accusations, the nature of
evidence in support thereof, the severity of the
punishment which conviction will entail, the
character of the accused, circumstances which are
peculiar to the accused, reasonable possibility of
securing the presence of the accused at the trial,
reasonable apprehension of the witnesses being
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GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:20:34 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

tampered with, the larger interests of the
public/State and other similar considerations.”

9.5 On the aspect of bail in cases involving socio-
economic offences, differential treatment in consideration
unlike conventional crimes has been the law of land,
reiterated in a plethora of judicial pronouncement flowing
from apex court. Reference, to cite a few may be drawn
from Rohit Tandon vs Directorate of Enforcement , (2018)
11 SCC 46; Serious Fraud Investigation Office vs Nitin
Johari , (2019) 9 SCC 165; and Nimmagadda Prasad vs
CBI , (2013) 7 SCC 466.”

4.5 The judgment in the case of Vedpal Singh Tanwar (supra) on
being challenged before the Supreme Court in SLP (Crl.)
No.10839/2025 was not unsettled.”

ANALYSIS

5. One of the major arguments, advanced on behalf of ED was that since
the coordinate bench of this court in Bail Application No.3808/2024 titled
Lovee Narula vs Directorate of Enforcement , 2025:DHC:467, and Bail
Application No. 3776/2024 titled Rajesh Kumar vs Directorate of
Enforcement , decided on 28.01.2025, rejected the bail applications of the
applicants Lovee Narula and Rajesh Kumar and that rejection was upheld by
the Supreme Court in orders dated 07.02.2025 and 03.02.2025 passed in
SLP (Criminal) 5434 of 2025 and SLP (Criminal) 1699 of 2025
respectively, this court cannot take a contrary view. On this aspect, learned
senior counsel for the accused/applicants argued that since the Supreme
Court had dismissed both the SLPs in limine , in case this court is able to
come across some grounds which were not raised before the said coordinate
bench of this court at the time of rejection of the bail applications of the
applicants Lovee Narula and Rajesh Kumar, this court can certainly take a
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GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:20:19 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

contrary view. In this regard, learned senior counsel for accused/applicants
placed reliance on the judgment of the Supreme Court in the case of Kusal
Toppo & Anr. vs State of Jharkhand, (2019) 13 SCC 676.

5.1 Against the backdrop of above noted law, I have examined the
detailed orders passed by the coordinate bench of this court while rejecting
the bail applications of the applicants Lovee Narula and Rajesh Kumar. The
learned coordinate bench based those decisions on the statements of the
accused/applicants recorded under Section 50 PMLA and certain WhatsApp
chats exchanged between the accused/applicants inter se . The learned
coordinate bench was not invited in the said cases to examine the strength of
the predicate offence, despite it having noticed the requirement to look for
foundational facts. It is from that angle, I have examined the issue in detail
afresh.

5.2 I am conscious that in the SLPs, the Supreme Court did not interfere
with the rejection of bail applications of the applicants Lovee Narula and
Rajesh Kumar. But since the decision of the Supreme Court was dismissal of
SLP in limine, in my considered view, the said rejection of bail was neither
affirmed, nor the principle of res judicata would come into play. The
significant observations of the Supreme Court in the case of Kusal Toppo
(supra) are extracted below:

“ 4. In the present case there were as many as five accused. A-5 was
acquitted by the trial court itself. The other two accused A-2 and A-3
had filed Special Leave Petitions (Criminal) Nos. 2572-73 of 2009
against the judgment and order of the High Court, which were
dismissed [Mahendra Prasad v. State of Jharkhand, 2009 SCC
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Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af39
62c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b40
f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:20:04 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

OnLine SC 13, wherein it was directed:“Heard the learned counsel
for the petitioner. No merits. The special leave petition is dismissed.”]
by this Court at the time of admission itself. In criminal cases, it is
well settled that a dismissal of an SLP in limine, would neither mean
that the lower court judgment stands affirmed nor the principle of
res judicata would be applicable (refer Kunhayammed v. State of
Kerala [Kunhayammed v. State of Kerala, (2000) 6 SCC 359 : AIR
2000 SC 2587] ; State of Punjab v. Davinder Pal Singh Bhullar [State
of Punjab v. Davinder Pal Singh Bhullar, (2011) 14 SCC 770 : (2012)
4 SCC (Civ) 1034 : (2012) 4 SCC (Cri) 496 : (2014) 1 SCC (L&S) 208
: AIR 2012 SC 364] ). Therefore, the dismissal of the SLP of the co-
accused will not have any effect accordingly. ”
( emphasis supplied )


5.3 Similarly, in the case of Khoday Distilleries Ltd. & Ors. vs Sri
Mahadeshwara Sahakara Sakkare Karkhane Ltd., Kollegal , (2019) 4 SCC
376, after traversing through various judicial precedents, the Supreme Court
reiterated that while hearing a petition for Special Leave to Appeal, the
Supreme Court is called upon to see whether the petitioner should be granted
such leave or not, and in that exercise the Supreme Court is not exercising its
appellate jurisdiction; it is merely exercising the discretionary jurisdiction to
grant or not to grant leave to appeal. As expressed by the Supreme Court, the
petitioner at such stage is still outside the gate of entry, though aspiring to
enter the appellate arena of the Supreme Court; whether he enters or not
would depend on the fate of his petition for special leave.

5.4 Further, in the case of Lt. Col. Prasad Shrikant Purohit vs State of
Maharashtra , Criminal Appeal No. 144/2017, decided on 21.08.2017, the
Supreme Court observed thus:

“ 22. Before concluding, we must note that though an accused has
right to make successive application for grant of bail, the court
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2.5.4.20=8401dd889b27a77b2f65ffffe4afec455
69af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557
0996b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:19:50 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

entertaining such subsequent applications has a duty to consider the
reasons and grounds on which the earlier bail applications were
rejected. In such cases the court also has a duty to record the fresh
grounds which persuade it to take a view different from the one
taken in the earlier applications .”
( emphasis supplied )

5.5 I have also examined the judicial precedents relied upon by ED on
this aspect, one of which judgments was authored by me. Those cases dealt
with the issue of judicial propriety and in completely different context, as
evident from paragraph 14 of Nikhil Jain vs State of NCT of Delhi,
2025:DHC:8537. All those cases, as relied upon by ED through their
compilation reiterate the principle that successive applications for bail can
be brought, but where the court comes to a decision different from the
decision taken by the courts in the previous bail applications, the court
concerned must deal with the view taken by the other courts in the previous
bail applications.

5.6 The major plank for rejection of bail applications of the applicants
Lovee Narula and Rajesh Kumar by the coordinate bench was the statements
of the accused/applicants recorded under Section 50 PMLA, therefore, it
would be apposite to examine the legal position as regards admissibility of
such statements, in the guiding light of the successive decisions of the
Supreme Court.

5.7 In the case of Vijay Madanlal Choudhary vs Union of India, 2022
SCC OnLine SC 929 , the Supreme Court held that where statement of an
accused is recorded after formal arrest by the ED officials, the consequences
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3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
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Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

contemplated under Article 20(3) of the Constitution of India and Section 25
of the Evidence Act may come into play to urge that the same being in the
nature of confession, shall not be proved against the maker thereof. The
Supreme Court observed that the authorities under PMLA are not police
officers, but also expressed that there could be a situation where protection
under Section 25 of the Evidence Act would have to be extended to the
accused and such situations have to be ascertained on case to case basis.

5.8 In the case of Prem Prakash vs Union of India, 2024 INSC 637 after
traversing through various judicial precedents including Vijay Madanlal
Choudhary (supra), the Supreme Court held thus:
“27. In the facts of the present case, we hold that the statement of the
appellant if to be considered as incriminating against the maker, will
be hit by Section 25 of the Evidence Act since he has given the
statement whilst in judicial custody, pursuant to another proceeding
instituted by the same Investigating Agency. Taken as he was from
the judicial custody to record the statement, it will be a travesty of
justice to render the statement admissible against the appellant .
28. The appellant accused cannot be told that after all while giving
this statement:- "you were wearing a hat captioned 'ECIR 5/2023' and
not the hat captioned 'ECIR 4/2022' ".
29. A complete reading of Vijay Madanlal Chaudhary (supra),
particularly, paragraphs 159, 165 and 172 mandate us to ask
ourselves the query: Is a reasonable inference legitimately possible
that, due to the vulnerable position in which the appellant was
placed and the dominating position in which the Investigating
Agency was situated, in view of the arrest in the other proceeding
that, there obtained a conducive atmosphere to obtain a confession?
We certainly think so. The question is not whether it actually
happened. The question is could it have been possible .
30. We are supported in this view by two old judgments of the Madras
High Court. In Re Elukuri Seshapani Chetti (ILR 1937 Mad 358)
Justice Mockett following the judgment of Justice Jackson In Kodangi
V. Emperor, (AIR 1932 Mad 24.) held as under:-

“In my judgment this is clearly a confession, as I have
already said, and, as has been pointed out by Jackson J. In
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962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
Digitally Signed KATHPALIA
Date: 2026.05.04 17:19:21 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

Kodangi V. Emperor, (AIR 1932 Mad 24.) a confession
made to the Police in the course of investigating crime A,
although it relates to another crime B, is equally
inadmissible. The whole spirit of section 25 of the Indian
Evidence Act is to exclude confessions to the police and, the
moment a statement is found to amount to a confession, I
do not think it matters in the slightest of what crime it is
said to be a confession.”
(emphasis supplied)

31. We feel that the principle laid down there on is applicable. In fact,
the three-Judge Bench in Vijay Madanlal Chaudhary (supra) , in the
para extracted hereinabove, expressly refers to Section 25 of the
Evidence Act while dealing with statements recorded when the person
is in custody.
32. We have no hesitation in holding that when an accused is in
custody under PMLA irrespective of the case for which he is under
custody, any statement under Section 50 PMLA to the same
Investigating Agency is inadmissible against the maker. The reason
being that the person in custody pursuant to the proceeding
investigated by the same Investigating Agency is not a person who
can be considered as one operating with a free mind. It will be
extremely unsafe to render such statements admissible against the
maker, as such a course of action would be contrary to all canons of
fair play and justice .”
( emphasis supplied )

5.9 Thus, the legal position as regards statements of the accused persons
recorded under Section 50 PMLA is that where such statements are recorded
while the accused is in judicial custody even if in some other case but by the
same investigating agency and those statements are self incriminating, the
same would be hit by Section 25 of the Evidence Act for want of
voluntariness of the self inculpatory statement. The question is not as to
whether the ED officer while recording the statement under Section 50
PMLA actually provided a hostile atmosphere before recording the
confessional statements. The question is as to whether it could have been
possible. The Supreme Court in Prem Prakash (supra) took a clear and
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3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed
Date: 2026.05.04 17:19:05 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

elaborately reasoned view that when an accused is in custody under PMLA,
irrespective of the case in which the accused is in custody, any statement
under Section 50 PMLA recorded by the investigator shall be inadmissible
against the accused because a person in custody is not a person who can be
considered as operating with a free mind. The core is that such accused is in
a vulnerable position, while investigator is in a dominating position.

5.10 Consequently what is to be seen in the present case is as to whether
the accused/applicants were in custody of any investigating agency, be it the
ED investigating the case under PMLA or the Delhi Police, investigating the
predicate offence, when the self incriminating statements were made by the
accused/applicants under Section 50 PMLA. If that be so, such statements to
the extent of portions self implicating have to be discarded.

5.11 According to record, the statements under Section 50 PMLA of all
accused persons were recorded when they were in custody of ED. The
applicants Pravez Khan, Neeraj Chauhan and Suraj Shat were arrested by
ED in the present case on 08.04.2024 and their multiple statements were
recorded during the period from 08.04.2024 to 22.04.2024. The applicant
Rajesh Kumar was arrested on 09.07.2024 and his three statements were
recorded till 11.07.2024. The applicant Lovee Narula was arrested in the
present case on 22.05.2024, after which his statements were recorded
multiple times till 27.05.2024. It would be significant to note that applicants
Rajesh Kumar and Lovee Narula are not even named as accused in the
predicate offence or the prosecution complaint of ED.

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3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:18:52 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

5.12 I have examined all those statements of the accused/applicants. The
statements are more or less copy paste of each other with slight tweaking
related to their individual roles. Each statement flows as smoothly as a hot
knife on butter. It is a bit unbelievable, to say the least that a person would
voluntarily make such self incriminating statement to the investigating
agency, unless coerced in custody. Such self incriminating statements when
recorded under Section 50 PMLA while the maker of the statement is in
custody of ED, cannot be considered voluntary statements and must be
discarded.

5.13 Therefore, with utmost humility at my command, I am unable to agree
with the decision of the learned coordinate bench, whereby placing reliance
on statements under Section 50 PMLA, bail applications of the applicants
Lovee Narula and Rajesh Kumar were rejected.

5.14 Another factor kept in consideration by the learned coordinate bench
while rejecting the bail applications of the applicants Lovee Narula and
Rajesh Kumar was reliance of ED on WhatsApp chats allegedly exchanged
between some of the accused persons, which according to ED “ shows
financial trail of the proceeds of crime ”. I have examined those WhatsApp
chats also. The same are prima facie a usual business chats between the
persons trading in medicines. The accused/applicants, admittedly are dealing
with the business of medicines in some or the other capacity. The same, in
my considered view cannot be given so much of significance as to adversely
impact liberty of the individuals.

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3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:18:38 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

5.15 It is for these reasons that I am unable to convince myself with the
order of the learned coordinate bench, whereby bail applications of the
applicants Lovee Narula and Rajesh Kumar were rejected. It is not any legal
issue on which I am compelled to respectfully differ. It is a matter of
application of law laid down by the Supreme Court in the manner I
understand the same.

6. Coming to the argument of ED as regards the presumption under
Section 23/24 PMLA, the Supreme Court in the case of Vijay Madanal
Choudhary (supra), elaborated the legal position thus:

“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 the 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
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3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:18:25 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

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 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 .”
(emphasis supplied)

6.1 The same was reiterated by the Supreme Court in the case of Prem
Prakash (supra) thus:

“15. In view of the importance of the three basic foundational facts
that the prosecution needs to establish, the counter/response to the
bail application in the original Court is very significant in PMLA bail
matters. In cases where the Public Prosecutor takes a considered
decision to oppose the bail application, the counter affidavit of the
Investigating Agency should make out a cogent case as to how the
three foundational facts set out hereinabove are prima facie
established in the given case to help the Court at the bail application
stage to arrive at a conclusion within the framework laid down in
Vijay Madanlal Choudhary (supra). It is only thereafter the
presumption under Section 24 would arise and the burden would
shift on the accused . The counter to the bail application should
specifically crystallize albeit briefly the material sought to be relied
upon to establish prima facie the three foundational facts. It is after
the foundational facts are set out that the accused will assume the
burden to convince the court within the parameters of the enquiry at
the Section 45 stage that for the reasons adduced by him there are
reasonable grounds to believing that he is not guilty of such offence.”
(emphasis supplied)


6.2 In view of the judicial precedents quoted above, the scrutiny has to be
to ascertain that the criminal activity relating to the Scheduled offence has
been committed by direct or indirect involvement of the accused and that the
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962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b4
0f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:18:12 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

property in question has been derived or obtained directly or indirectly by
any person as a result of that criminal activity. What is to be seen is as to
whether the foundational facts, in accordance with the above quoted judicial
precedents have been established by the ED in the present case. Merely
because a person accused of an offence under PMLA is unable to establish
source of his money, it cannot be presumed that the money is tainted, much
less proceeds of crime connected with the predicate offence.

6.3 In the present cases, of course, the allegation that the
accused/applicants were involved in preparation, storage and sale of spurious
anti cancer drugs is indeed an extremely serious allegation. But one should
be cautious not to get carried away with the seriousness of mere allegation;
one should delve deeper as to whether there is any credible material to
establish such allegation. For, it is not uncommon that the prosecuting
agencies would paint a very large canvas of allegations, but when it comes to
providing supportive evidence or material collected, there might be none.
The gravity of the offence charged against the accused, which is a relevant
factor while considering grant of bail, does not mean mere allegations de
hors the supportive evidence/material collected by the investigator. With that
principle in mind, I have scrutinized the record, also at the same time being
careful not to minutely analyse the material keeping in mind the broad
principles of consideration of bail.

6.4 In nutshell, the allegation against the accused/applicants is that they
are part of a syndicate involved in preparation and sale of spurious anti
cancer drugs, which led to generation and acquisition of tainted money,
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f3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d1557099
6b40f80cbd2eee60402c487965ff801e26fa,
Digitally Signed cn=GIRISH KATHPALIA
Date: 2026.05.04 17:17:59 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

labelled by ED as the proceeds of crime. It would also be relevant to keep in
mind that the applicants namely Pravez Khan, Neeraj Chauhan and Suraj
Shat have already been admitted to bail in the predicate offence of
preparation and sale of the spurious drugs, while the remaining two
applicants namely Rajesh Kumar and Lovee Narula were not even
chargesheeted for the predicate offence.

6.5 The ED has ascribed specific role to each of the accused/applicants in
the following manner. The applicants Pravez Khan and Neeraj Chauhan
supplied empty vials of injections to co-accused Viphil Jain and the
applicant Suraj Shat, both of whom prepared spurious anti cancer drugs by
using those empty vials. The applicant Neeraj Chauhan received the empty
vials from Sajid, Majid, Jitender and Rohit Singh Bisht, all of whom were
employed in the hospitals dealing with cancer patients. The applicant Pravez
Khan received the empty vials from co-accused Komal Tiwari and Abhinay,
both of whom were working with one cancer hospital. The vials filled with
spurious drugs were received by the applicants Neeraj Chauhan and Pravez
Khan from the co-accused Viphil and the applicant Suraj Shat, and the same
were sold in the open market through the remaining accused/applicants
namely Lovee Narula and Rajesh Kumar. The accused/applicants namely
Pravez Khan, Neeraj Chauhan and Suraj Shat are already on bail in the
predicate offence while the accused/applicants namely Lovee Narula and
Rajesh Kumar were not even chargesheeted in the predicate offence.

6.6 An important aspect to be kept in mind is that the ED did not conduct
any investigation in order to unearth the doctors or the pharmacists who
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62c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b4
0f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:17:45 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

allegedly supplied the empty vials to the co-accused Viphil Jain and the
applicant Suraj Shat, or any negligence on the part of those doctors or
pharmacists, which enabled the said accused persons to procure the same. It
cannot be anybody’s case that the doctors and/or pharmacists of the cancer
hospitals were not aware of the statutory requirement to strictly maintain
records of the number of vials used on the patients with batch numbers as
well as disposal of the empty or half used vials through incineration. In other
words, the genesis of the alleged offence has not seen light of the day till
date.

6.7 On this aspect also, like many others, the omnibus argument advanced
by learned standing counsel for ED was that being part of investigation of
the predicate offence, it was for the law enforcement agency Delhi Police to
investigate this issue. But for the predicate offence, the accused/applicants
have already been granted bail. One wonders, if duty of the ED was simply
to follow the money trail, that too majorly on the basis of statements under
Section 50 PMLA, without caring to at least prima facie establish
connection between the allegedly tainted money and the alleged predicate
offence. And if that was so, keeping in mind the quantum of money
allegedly earned by each of the accused/applicants, one also would wonder,
whether they deserve to be left in jail to rot in perpetuity. What if ultimately,
in the predicate offence the accused/applicants are acquitted.

6.8 The quantum of money involved in itself also presents an interesting
picture. Admittedly, on individual level, none of the accused/applicants
transacted to the extent of more than a few lakhs of rupees, but certainly
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DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569
af3962c6fb4835d435f97626cacca, ou=HIGH
COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d155709
96b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed
Date: 2026.05.04 17:17:31 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

much lesser than one crore rupees. Even according to ED, the threshold of
one crore rupees requisite to apply the twin conditions under Section 45
PMLA in the present case has to be the collective transactions of all the
accused/applicants. Of course, it is not to say that for invoking twin
conditions under Section 45 PMLA, each of the accused/applicants must be
shown to have transacted to the tune of one crore rupees. What one observes
in this case is only to the extent of role allegedly played by the individual
accused/applicant. There are numerous offences registered, investigated and
even chargesheeted, which involve crores of rupees, but despite their being
the Scheduled offences, no proceedings under PMLA are initiated. Certainly
it is the prerogative of ED and not a matter of parity that some of the cases
would be picked for such harsh law enforcement. But certainly, it is a
relevant consideration while dealing with liberty of an individual, especially
where ED estimates another six months required to conclude further
investigation and in contrast the accused/applicants are in custody for more
than two years.


6.9 Then comes another aspect, which is at the other end of the alleged
transactions. The ED opted not to investigate the end users of the allegedly
spurious drugs. Not a single person was examined by ED to find out as to
whether actually the allegedly spurious drugs were administered to her/his
cancer ridden patients. In fact, as mentioned above, two of the
accused/applicants claim that they administered same injections to their
respective father suffering with cancer. Not just the end users, the ED did
not even find out if any of the authorities received any complaint from
anyone alleging any harm or even no use from the allegedly spurious drugs.
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Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569a
f3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed Date: 2026.05.04 17:17:19 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

On this aspect also, stand of the ED is that it was for the law enforcement
agency Delhi Police investigating the predicate offence to examine the end
users. So, the terminal end of the alleged transactions also remains flying in
the vacuum.

7. Coming to these headless-endless strip of transactions, it also would
be significant to ascertain as to whether the vials allegedly transacted by the
accused/applicants contained the material which can be termed spurious. In
this regard also, the ED claims that it was for the law enforcement agencies
investigating the predicate offence to get the contents of the said vials
forensically examined. One wonders as to where duty of the ED begins to
investigate the existence of foundational facts in order to connect the alleged
proceeds of crime with the predicate offence alleged against the
accused/applicants, including their involvement in the process/activity of
transactions dealing with the anti cancer drugs, which are alleged to be
spurious but except one or two vials, found to be genuine drugs by way of
forensic analysis.

7.1 However, learned counsel for ED also submitted during arguments
that some of the allegedly recovered vials were got forensically examined
through FSL and some were got verified from the manufacturers. The
learned counsel for ED also placed on record a chart dated 22.04.2026,
tabulating the vials and the forensic results, which were obtained by the law
enforcement agencies investigating the predicate offence. As regards the
applicant Neeraj Chauhan, seven vials through processes of spot sampling
and court sampling and analysed by the manufactures or the drug inspectors
Bail Applications 4618/2024 & connected matters Page 36 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af
3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996
b40f80cbd2eee60402c487965ff801e26fa,
cn=GIRISH KATHPALIA
Digitally Signed
Date: 2026.05.04 17:17:06 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

were found to contain genuine drugs Keytruda, Opdyta, Perjeta and
Darzalex; and only two vials through processes of spot sampling and court
sampling were found to contain anti-fungal drugs. As regards applicant
Pravez Khan, two vials of Keytruda and one vial of Opdivo through process
of court sampling and analysed by the manufacturer were found spurious.
The single vial of Opdyta recovered from co-accused Viphil Jain and
applicant Suraj Shat and sampled through spot sampling was found to
contain spurious drug according to the drug inspector. In view of clear stand
of the accused/applicants that they were unaware that contents of those vials
were spurious, ED should have conducted further investigation.

7.2 No investigation was conducted by ED to rule out the complicity of
manufacturer or to rule out some manufacturing error in contents of those
vials. Should the accused/applicants be denied liberty in this scenario only
because they purchased the drugs at a price lesser than market price? The
answer has to be resounding No.

8. Further comes the argument advanced on behalf of the
accused/applicants that ED adopted pick and choose policy for arrest of the
persons accused of offence under PMLA. The response of ED is that the
remaining accused persons, who have not been arrested, shall certainly face
trial and it is not that they have been acquitted. I find this argument of ED
fallacious, because even the present accused/applicants would face trial. Of
course, it is the prerogative of the IO to arrest or not to arrest an accused.
But such selective treatment does vitiate fairness when it comes to
curtailment of liberty of an individual.
Bail Applications 4618/2024 & connected matters Page 37 of 42 pages

Signature Not Verified
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af
3962c6fb4835d435f97626cacca, ou=HIGH COURT
OF DELHI,CID - 7047638, postalCode=110003,
st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:16:55 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21
GIRISH
KATHPALIA

8.1 As noted above, a number of persons allegedly involved in the
offence have been ascribed role graver than or at least similar to the role
ascribed the present accused/applicants, but many of those persons have not
been arrested and rather some have not even been named as accused by ED.

8.2 This selective treatment becomes significant also in the light of the
legal position that the offence under Section 3 PMLA is punishable with
imprisonment only up to 07 years ( unless the alleged offence is specified
under paragraph 2 of Part A of the Schedule ) under Section 4 PMLA. It
certainly is discomforting to see that regarding an offence punishable with at
the most 07 years incarceration, few of the accused are arrested and even
after spending more than 02 years in jail have to suffer incarceration without
trial till the maximum prescribed punishment, whereas others accused of
similar or graver role in the same offence are not even arrested. That too,
where as regards the predicate offence of dealing in spurious cancer drugs,
three of the present accused/applicants have already been granted bail while
the remaining two have not even been chargesheeted, but remain in jail.

8.3 In respect of the persons namely Deepali Jain, Sajid, Majid, Rohit
Singh Bisht, Abhinay, Jitender, Komal Tiwari, Gagan Khurana, Ayonij Jain,
Sneha and Sheetal Pandey, the role ascribed to whom is graver than or
similar to that ascribed to the present accused/applicants, they have not been
arrested by the ED.

8.4 The logic advanced on behalf of ED that since those persons provided
the requisite information, they were not arrested is no logic at all. The
Bail Applications 4618/2024 & connected matters Page 38 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af396
2c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b40
f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:16:42 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

concept of protection from self incrimination would get completely
demolished if the investigating officer is given option to arrest only those
who do not succumb to pressures and self incriminate.

9. Lastly, I have also examined the issue of delay in trial, which is one of
the important grounds raised by the accused/applicants seeking bail. It is
trite that the fundamental right to life and liberty under Article 21 of the
Constitution of India is a potent provision capable of making inroads into
even the requirement of twin conditions under Section 45 PMLA for grant
of bail. This aspect was examined by the Supreme Court in a number of
judicial pronouncements, the latest one being in the case of Arvind Dham vs
Directorate of Enforcement , 2026 INSC 12, in which after detailed
discussion, it was held thus:

“15. We have given our thoughtful consideration to the rival
submissions and have carefully perused the record. The court while
dealing with the prayer for grant of bail has to consider gravity of
offence, which has to be ascertained in the facts and circumstances of
each case. One of the circumstances to consider the gravity of
offences is also the term of sentence that is prescribed for the offence,
the accused is alleged to have committed. The court has also to take
into account the object of the special Act, the gravity of offence and
the attending circumstances along with period of sentence. All
economic offences cannot be classified into one group as it may
involve various activities and may differ from one case to another.
Therefore, it is not advisable on the part of the Court to categorize
all the offences into one group and deny bail on that basis. It is well
settled that if the State or any prosecuting agency including, the
court, concerned has no wherewithal to provide or protect the
fundamental right of an accused, to have a speedy trial as enshrined
under Article 21 of the Constitution, then the State or any other
prosecuting agency should not oppose the plea for bail on the
ground that the crime committed is serious. Article 21 of the
Constitution applies irrespective of the nature of the crime . The
aforesaid proposition was quoted with approval by another two-Judge
Bail Applications 4618/2024 & connected matters Page 39 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Date: 2026.05.04 17:16:17 -07'00'
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

Bench of this Court and it was held that long period of incarceration
for around 17 months and the trial not even having commenced, the
appellant in that case has been deprived of his right to speedy trial.
16. A two-Judge Bench of this Court in V. Senthil Balaji’s case has
held that under the statutes such as PMLA, where maximum
sentence is seven years, prolonged incarceration pending trial may
warrant grant of bail by Constitutional Courts, if there is no
likelihood of the trial concluding within a reasonable time. Statutory
restrictions cannot be permitted to result in indefinite pretrial
detention in violation of Article 21 .
17. A three Judge Bench of this Court in Padam Chand Jain (supra),
reiterated that prolonged incarceration cannot be allowed to convert
pretrial detention into punishment and that documentary evidence
already seized by the prosecution eliminates the possibility of
tampering with the same.
18. The right to speedy trial, enshrined under Article 21 of the
Constitution, is not eclipsed by the nature of the offence. Prolonged
incarceration of an undertrial, without commencement or reasonable
progress of trial, cannot be countenanced, as it has the effect of
converting pretrial detention into form of punishment. Economic
offences, by their very nature, may differ in degree and fact, and
therefore cannot be treated as homogeneous class warranting a
blanket denial of bail.”
(emphasis supplied)

9.1 As mentioned above, even ED has clarified before this court that they
need at least six months to conclude further investigation. The
accused/applicants are in jail for more than two years. There is no likelihood
of even commencement of trial, what to say of culmination thereof in the
foreseeable future.

10. To conclude: three of the present accused/applicants have already
been granted bail in the predicate offence of dealing in spurious cancer drugs
and the remaining two have not even been chargesheeted, but remain in jail
for more than two years; and the material collected by the ED to establish
foundational facts in order to connect the monetary transactions between the
Bail Applications 4618/2024 & connected matters Page 40 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
KATHPALIA
Digitally Signed Date: 2026.05.04 17:16:03 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

accused/applicants inter se with the predicate offence of dealing in spurious
drugs alleged against them is completely hazy and consequently, for present
purposes it is difficult to clearly identify any proceeds of crime.

10.1 That gives me satisfaction to record that there are reasonable grounds
for believing that the accused/applicants are not guilty of the offence alleged
against them. As regards the second limb of Section 45 PMLA qua no
likelihood of their committing any offence on bail, such likelihood has to be
inferred on the basis of some cogent material, which has to be in the form of
antecedents and propensities of the accused/applicants, but in the present
cases, no such antecedents or propensities have been alleged against them.

10.2 Therefore, all these bail applications are allowed and all the
accused/applicants are directed to be released on bail subject to each of them
furnishing a personal bond in the sum of Rs.1,00,000/- with one surety each
in the like amount to the satisfaction of the trial court and also subject to the
condition that the accused/applicants shall not leave India without obtaining
permission from the trial court.

10.3 Pending applications also stand disposed of.

10.4 Of course, nothing observed in this order shall be read to the prejudice
of either side at the stage of final arguments, and at that stage, the learned
trial court shall take independent view on the basis of evidence adduced
before it.

Bail Applications 4618/2024 & connected matters Page 41 of 42 pages

Signature Not Verified
GIRISH
KATHPALIA
Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec45569af3
962c6fb4835d435f97626cacca, ou=HIGH COURT OF
DELHI,CID - 7047638, postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d15570996b
40f80cbd2eee60402c487965ff801e26fa, cn=GIRISH
Digitally Signed KATHPALIA
Date: 2026.05.04 17:15:49 -07'00'
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21

10.5 Copy of this order be immediately transmitted to the concerned Jail
Superintendent for being conveyed to the accused/applicants.


Digitally signed by GIRISH KATHPALIA
DN: c=IN, o=HIGH COURT OF DELHI,
2.5.4.20=8401dd889b27a77b2f65ffffe4afec4
5569af3962c6fb4835d435f97626cacca,
ou=HIGH COURT OF DELHI,CID - 7047638,
postalCode=110003, st=Delhi,
serialNumber=d3e86796451ec45c07b5d155
70996b40f80cbd2eee60402c487965ff801e26
fa, cn=GIRISH KATHPALIA
Date: 2026.05.04 17:15:16 -07'00'
GIRISH
KATHPALIA
GIRISH KATHPALIA
(JUDGE)
/ry
MAY 04, 2026


Bail Applications 4618/2024 & connected matters Page 42 of 42 pages

Signature Not Verified
Digitally Signed
By:RAHUL YADAV
Signing Date:04.05.2026
17:38:21