Madrasreserved High Court · 2025

Crl.O.P.No.9112 of 2025ORDERThe petitioner, arrested on 20.01.2025, for the offence punishable under Sections 3 and 4 of Prevention of Money Laundering Act [hereinafter referred to as “PMLA”] in connection with ECIR/CEZO-1/17/2024 on the file of the respondent, seeks bail. 2.The contention of the learned counsel for the petitioner is that the respondent arrested the petitioner as though he operated mule accounts in the name of several individuals for receiving the money and thereafter diverting the same to transfer Indian money to cryptocurrency using Binance. The petitioner is also said to have been trading account with unknown persons in abroad, indulged in generating funds through cyber fraud and transferring the money to other accounts projecting the amounts received through cyber fraud as untainted money. Further, the petitioner is said to have acted at the instance of one Leo and one Athman John, who are living abroad. Page No.2 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 20253.The further contention of the petitioner is that the respondent registered a case under PMLA based on a predicate offence in Crime No.411 of 2024 registered by CCD-I, Avadi City. The complaint was lodged by one Neela Sekar and the petitioner is not an accused in that case. The respondent linked the petitioner for the offence of money laundering, presuming petitioner knowingly received the amounts from various persons received through cyber fraud, except for the sweeping and bald allegation there is no iota of evidence against the petitioner. The case projected by the respondent is that the petitioner indulged in trading USDT in connivance with Manish, Yash through Telegram. Further the respondent alleges that the petitioner had cash deposit slips, screen shots of USDT transfer sharing bank details. Thus utmost it can be said that the petitioner is buying and selling crypto currencies with several persons not with the said Leo and John alone. It is further alleged that the petitioner opened one account in Binance in the name of his friend Shoaib Sheikh from Bhopal and another account (Trust Wallet) in the name of his other friend Azeen Rehman, through these accounts, he indulged in buying and selling crypto currencies Page No.3 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025and transferring the details to the said Leo and John. The trading application viz., Binance and Trust Wallet are reporting entity as defined in Section 2(wa) of PMLA, 2002. Hence, the petitioner indulging in crypto currency trading using the above said mobile application is legitimate and not illegal. The petitioner sharing his buying and selling of crypto currency details to John and Leo do not constitute any criminal offence. The petitioner sharing the details with his clients and investors cannot be attributed with criminality. Further, some of the amounts which have been received from third party accounts appear to be in control of Leo and John and this cannot be projected against the petitioner as if the petitioner indulged in cyber fraud, digital fraud and other related offences. The petitioner disclosed all the details known to him to the respondent and he was not aware as to how John and Leo are receiving money and accumulating and dealing with it. The petitioner had not directly involved in any of the transactions. 4.The further allegation against the petitioner is that the defacto complainant in Crime No.411 of 2024 was cheated to the tune of Page No.4 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025Rs.33 lakhs by one Sagar Belvanshi, a resident of Madhya Pradesh and thereafter, the money was split up and transferred to several accounts. The respondent not disclosed as to whether any investigation done with regard to the said Sagar Belvanshi, genesis of the entire case. The KYC available with the Bank would give details about the said Sagar Belvanshi. He further submitted that buying crypto currency from a seller of USDT using Indian currency and the bank accounts and ID proofs are shared to the USDT buyers who are living abroad. In online trading, it is not necessary that all details of the trading will be available and whether any crime proceeds involved in the investment is not known. In such circumstances, arresting the petitioner in the above case is nothing but a witch hunt. It is further projected as though the petitioner received Rs.9.49 Crores from various bank accounts generated out of criminal activity and tainted money deposited in the Bank accounts, used for trading crypto currency. The pertinent point to be considered is that whether the petitioner is aware that the alleged amount of Rs.9.49 Crores is accumulated through cyber fraud. The further allegation is that 79 bank accounts have been frozen, all belong to third parties, but there is no materials to show as to how and in what Page No.5 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025manner petitioner is involved in these bank accounts. The petitioner targeted to save the real offenders.5.Further, it is projected that the petitioner was served with summons on 11.12.2024, 12.12.2024 and 27.12.2024 but petitioner not appeared. It is to be seen search was conducted at the petitioner's premises on 10.12.2024 and 11.12.2024 at Noida and Bhopal. Since petitioner was not available, it is projected that the petitioner absconding and was to fly to Kazakhasthan. According to the petitioner, no summons issued on 11.12.2024 and 12.12.2024. The petitioner booked the ticket not for one way journey but for a round trip. He booked his ticket and scheduled to travel to Kazakhstan on 20.01.2025 and return trip to India on 24.01.2025. Further, the said John and Leo according to the respondent are residing in UAE and Hongkong but the petitioner intended to travel only to Kazakhstan. Now investigation completed and complaint filed by the respondent. He would submit that the petitioner will co-operate with the trial and prove his case. The petitioner is a permanent resident of India, having deep social root and he is willing to surrender his passport. Hence, prayed for bail.Page No.6 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 20256.The learned Special Public Prosecutor filed his objections and submitted that an FIR No.411 of 2024 on 25.11.2024 was registered by CCD-I, Avadi City, Tamil Nadu Police, on the complaint from one Smt.Neela Sekhar regarding cyber fraud/Digital Arrest. It is mentioned in the said FIR that she got calls from unknown persons and she was threatened, projected that she was suspected of money laundering as large amount transacted in SBI Bank account opened using her Aadhar number. Further she was directed to close all her Fixed Deposits in her name in Central Bank of India to prove her innocence, having threatened by the same, she liquidated all the Fixed Deposits and transferred a sum of Rs. 33 lakhs from her Account (A/c No. 1009926592 with Central Bank of India, Aminjkarai Branch, Chennai) to one Account No. 60510131345, IFSC Code-MAHB0000449 (Chindwara Branch, Madhya Pradesh) on 21.11.2024. Subsequently, after the said incident, she registered complaint before the CCD-I, Avadi City and FIR No.411 of 2024 registered against unknown persons under Section 318 (4) of BNS, 2023 and Section 66 (D) of Information Technology Act, 2008. During investigation under PMLA, 2002, it revealed that the Mrs.Neela Sekhar (Complainant in the Predicate Page No.7 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025Offence) was cheated and put under digital arrest by some unknown persons and she was threatened and forced to transfer Rs.33,00,000/- on 21.11.2024 to one bank account in the name of Mr.Sagar Belwanshi, resident of Chindwara, Madhya Pradesh. The funds received in the bank account of Mr.Sagar Belwanshi was immediately transferred to different bank accounts on the same day. One of such beneficiary account was found to be in the name of Mr.Rohit Kumar (having account number 2401211963250807 in AU Small Finance Bank, Sector-18, Noida, Uttar Pradesh) who received Rs.6,00,000/- from the account of Mr. Sagar Belwanshi.7.He would submit that further investigation revealed that Mr.Rohit Kumar had shared his bank account details with Mr. Faiz Khan (Petitioner). The said Rs. 6,00,000/- was received in his account atthe instance of the petitioner and he had withdrawn a sum of Rs.5,50,000/-immediately on receipt of funds through a cheque issued in his name. Further, the ATM card for the said account was in possession of the petitioner and the remaining amount of Rs.50,000/- was withdrawn through ATM card on the same day i.e. 21.11.2024. During the course of investigation, search and Page No.8 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025seizure under section 17 of the PMLA, 2002 was conducted on the residential premises of the petitioner, Mr.Rohit Kumar and other connected individuals. During the course of search operations, various digital devices (including 3 mobile phones One green colour Iphone 15, Black Colour Iphone 15 & One Blue Colour Oppo F25 Pro 5G of the Petitioner) seized under Section under Section 17 (1) of PMLA, 2002. During the course of investigation, it revealed that the petitioner is involved in operating mule bank accounts in the name of several individuals for receiving amounts transfer to USDT through Binance trading accounts to unknown individuals, based abroad. By paying some commission to the mule account holders, the petitioner devised a money laundering network by operating multiple bank accounts under the names of various individuals, where illegal funds generated through cyber frauds were transferred. These funds were promptly withdrawn in cash and converted into USDT (Tether, a kind of cryptocurrency) through other persons by paying in cash, to bypass formal financial systems. The converted cryptocurrency was then transferred to co-conspirators Mr.Athman John, Mr. John, Mr. Leo and some other persons, who were using phone numbers of other country viz. Hong Kong.Page No.9 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 20258.The learned Special Public Prosecutor further submit that Section 45 imposes two conditions for the grant of bail to any person, accused of an offence punishable for a term of imprisonment of more than 3 years under Part A of the Schedule. The two conditions are that (1) the prosecutor must be given an opportunity to oppose the application for bail; and (ii) the Court must be satisfied that there are reasonable grounds for believing that the accused person is not guilty of such offence and that he is not liable to commit any offence while on bail are well settled, these two conditions are mandatory in nature need to be complied before the accused person is released on bail. The Hon'ble Apex Court in the case of Vijay Madanlal Choudhary & others Vs Union of India reported in 2022 LiveLaw (SC) 633 upheld this twin conditions. Hence, strongly opposed the bail application.9.Considering the rival submissions, it is seen that the petitioner is facing prosecution under PMLA, 2002, the petitioner used multiple mule bank accounts to receive funds against transfer of USDT to the persons Page No.10 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025abroad. So far, 79 mule bank accounts have come to knowledge and total amount received in these accounts is Rs.9.49 Crores. The said aggregate amount of Rs.9.49 Crores was received from different bank accounts across the country and these mule accounts have been frozen/marked lien by the respective banks on the directions of various Law Enforcement Agencies. The funds received in these mule accounts are generated out of criminal activity. Thus, as per investigation done so far, the petitioner has received proceeds of crime to the tune of Rs.9.49 Crores and layered and integrated the same by converting it into cryptocurrency by paying in cash to conceal the origin of the proceeds of crime. The petitioner not respondent to the summons, found absconding, searches conducted at his residential premises on 10.12.2024 and 11.12.2024. The petitioner made an attempt to leave India. He was apprehended when he was intercepted by the Immigration Authorities at Terminal - 3, Indira Gandhi International Airport, New Delhi, on 20.01.2025 while he was boarding a flight to Kazakhstan. Thereafter, he was examined by the Complainant under Section 50 (2) & (3) of PMLA, 2002, at New Delhi Airport and after due consideration of his non-cooperative conduct and his involvement in the offence of money Page No.11 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025laundering, he was arrested under Section 19 (1) of PMLA, 2002, on 21.01.2025 from New Delhi International Airport.10.The petitioner has systematically funnelled through multiple bank accounts, the whole layer of mule account is controlled by the petitioner, a mule account operator. The funds obtained through illicit activities are rapidly dispersed across numerous mule accounts. The laundering process involves multiple layers of accounts. By second or third layer, a convoluted trail is created to obscure the money flow. The laundered funds are converted into cryptocurrencies. The petitioner as primary fraudster compensates the mule account providers by offering a commission of 5% to 10% per transaction. The respondent collected the digital evidence and other materials against the petitioner and filed the complaint. The contention of the petitioner in his defence has to be necessarily considered during trial. Further, it is seen that it is not the case of the petitioner that his account has been hacked. Hence, this Court is not inclined to grant bail to the petitioner.Page No.12 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 202511.Accordingly, the Criminal Original Petition stands dismissed. 10.07.2025Speaking Order/Non Speaking OrderIndex : Yes/NoNeutral Citation: Yes/NocseNote :1. Registry is directed to forthwith upload this order in the Official Website of this Court.2. All concerned to act on this order being uploaded in Official Website of this Court without insisting on certified hard copies. To be noted, this order when uploaded in the official website of this Court will be watermarked and will also have a QR code.To1.The Assistant Director, Directorate of Enforcement, Chennai Zonal Office – I, No.02, 5th and 6th Floor, BSNL Admin Building, Kush Kumar Road, Nungambakkam, Chennai-600 034.2.The Special Public Prosecutor (ED), Madras High Court.Page No.13 of 14 https://www.mhc.tn.gov.in/judis Crl.O.P.No.9112 of 2025M.NIRMAL KUMAR, J.csePre-delivery order made in Crl.O.P.No.9112 of 202510.07.2025Page No.14 of 14