₹125-crore cloud-storage investment laundering case: Punjab and Haryana High Court denies bail to alleged mastermind Sukhwinder Singh Kharour

The petitioner sought regular bail in Complaint Case No. COMA 2 of 2025 arising from ECIR/JLZO/26/2024 dated 25 November 2024, registered by the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002 (“PMLA”).

The ECIR originated from allegations concerning Vuenow Marketing Services Ltd., Vuenow Infotech Pvt. Ltd., Zebyte Infotech Pvt. Ltd., Zebyte Rental Planet Pvt. Ltd. and connected entities.

The prosecution alleged that investors were induced to purchase “cloud particles” on representations of assured returns, despite an alleged disparity between the storage capacity sold and the actual operational capacity.

It was further alleged that funds received from subsequent investors were used to pay earlier investors and were layered or diverted through affiliated entities.

The Enforcement Directorate attributed a central role to the petitioner, alleging that he founded the “mycloudparticle” project, controlled the Vuenow Group, participated in investor presentations, and was involved in the generation, concealment, layering, diversion and use of proceeds of crime.

The ED relied upon financial records, statements recorded under Section 50 of the PMLA, alleged use of fake invoices, corporate records and transactions involving the petitioner and the connected entities.

The petitioner had been arrested on 28 February 2025. The prosecution complaint was filed on 24 April 2025, and the petitioner had remained in custody for approximately one year and seven months by the date of decision.

He argued that the evidence was substantially documentary, custodial interrogation was no longer required, the trial would take considerable time, and a co-accused, Dimple Kharour, had been granted bail.

The ED opposed bail, relying on the gravity of the alleged economic offence, the petitioner’s alleged principal role, the financial trail and the statutory restrictions under Section 45 of the PMLA.

Whether the petitioner was entitled to regular bail under Section 45 of the PMLA in view of the material allegedly showing his active and central role in laundering the proceeds of crime?

Whether the petitioner’s period of custody, filing of the prosecution complaint and the likely delay in conclusion of trial justified release on bail on the ground of Article 21 and the right to speedy trial?

Whether the petitioner was entitled to parity with co-accused Dimple Kharour, who had been granted regular bail?

Whether the alleged non-compliance with the safeguards under Section 19 of the PMLA affected the petitioner’s entitlement to regular bail?

The Court applied Sections 3 and 4 of the PMLA, under which involvement in processes connected with proceeds of crime, including concealment, possession, acquisition, use or projection of such proceeds as untainted property, constitutes money-laundering punishable under Section 4.

Section 45 of the PMLA imposes the twin conditions for bail: the Court must have reasonable grounds for believing that the accused is not guilty of the alleged offence and is unlikely to commit any offence while on bail.

The Court also applied the general principles governing regular bail, including the nature and gravity of the accusation, the accused’s specific role, the quality of the material collected, the possibility of absconding or tampering with evidence, the stage of trial, the period of custody and the likelihood of a prolonged pre-trial detention.

In economic-offence cases, allegations involving a structured scheme, multiple entities, numerous investors, substantial financial transactions and a specific documentary and financial nexus require heightened scrutiny at the bail stage.

Parity is not automatic; the role attributed to each accused, the nature of the material against them and the circumstances in which the co-accused obtained bail must be separately examined.

The Court found that the prosecution material did not constitute a vague or omnibus allegation against the petitioner.

Prima facie, it attributed to him a central role in the formulation and implementation of the cloud-particle investment model, mobilisation of investments and movement and utilisation of funds through connected entities.

The alleged mismatch between the cloud-storage capacity sold to investors and the actual operational capacity, together with statements indicating that payments to earlier investors were made from later investments, supported the prosecution’s case that the matter involved a structured financial arrangement rather than a mere commercial dispute.

The financial records, corporate documents, statements and alleged transactions were considered sufficient, at the bail stage, to establish a prima facie nexus between the petitioner and the alleged proceeds of crime.

Although the prosecution complaint had been filed and the petitioner had undergone substantial custody, the Court held that these factors, by themselves, did not satisfy the twin conditions under Section 45.

The complaint cited 52 prosecution witnesses, many material witnesses had not yet been examined, and the trial had not progressed to a stage warranting release solely on the ground of incarceration.

The Court declined to determine conclusively the evidentiary value of the statements and financial records, holding that those matters were for trial.

It further held that the petitioner could not claim parity with Dimple Kharour because the co-accused was a woman and the role and material attributed to her were distinguishable; the grant of bail to one accused did not automatically establish parity for another.

His prolonged custody, filing of the prosecution complaint, alleged speedy-trial violation and claim of parity did not justify bail in the circumstances of the case.

The regular bail petition was accordingly dismissed for the present.

The Court clarified that its observations would not affect the merits of the trial, and directed the trial court to proceed in accordance with law without being influenced by the observations in the bail order.

Pending applications, if any, were also disposed of.