Madrasreserved High Court · 2025

Crl.O.P.No.12116 of 2025Pradesh. Later she came to know that she had been cheated. Hence, the complaint registered. Thereafter, the respondent finding that it is a cyber fraud and there have been huge transactions layering of money projecting the ill gotten money as untainted money registered a complaint. During investigation, the petitioner was enquired, search conducted and incriminating documents and electronic gadgets seized and found the petitioner involvement in money laundering. On completion of investigation, complaint registered before the Special Court which is now pending trial.3.The contention of the learned counsel for the petitioner is that the petitioner is not a named accused in the scheduled offence. The petitioner till his arrest was running a small shop in the name of M/s.Hind Techno Services and obtained an agency under UTI for PAN card services. The petitioner out of his own interest learned web designing and also earning from it. The petitioner employed three persons in his shop and with the income in his business, he purchased a flat in the year 2018 and now presently, he is having a personal loan of Rs.2 lakhs for which monthly EMI Page No.3 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025paid by him. Recently few months before his arrest, one of his friend opened an account in an online trading app named ‘BINANCE’, dealing with trading of cypto currency. The crypto currency is bought and sold with a small margin or commission by the users of the app using P2P business module. The buyer and seller carry the trade through bank transactions. Numerous persons are using this application and it is a platform for buying and selling of crypto currency. All the transactions are processed after verifying the KYC. The European Union and US is planning to regulate and restrict the USDT digital currency but in India, it is not a banned application. The Financial Intelligence Unit has promoted BINANCE to function as a reporting entity with specific directions. Since his friend was finding it difficult to carry out the trading of USDT in BINANCE app, the petitioner rendered his assistance for earning income out of it. One of the user named Zeus placed orders buying USDT and for this transaction he used to deposit money in the account of one Jalil Molla who was acting as a Pan Card business sub agent. The petitioner already registered his business under the GST regime in order avoid tax implication. The petitioner made an arrangement with his sub agent Jalil to receive money, deposit in his Page No.4 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025account and after deducting 2% commission, Jalil would pay in cash to the petitioner and act according to the request of Zeus. It was Zeus who would transact in BINANCE app in USDT as well as equivalent Indian currency deposit in the sub agent’s bank account. The petitioner for commission in his trading activity rendered assistance to his friend and other known persons. To avoid tax burden, he transacted the business in the name of known persons. He would submit that the online trading application is available in Google Play Store. Apart from acting as a commission agent, the petitioner has no role with any of the users of the application which are now projected against the petitioner.4.The learned counsel would further submit that the previous money trail not connected to the petitioner. The respondent had resorted to continuous search and seizure in the premises of the petitioner from 10.12.2024 to 11.12.2024 continuously for 28 hours. Thereafter, Panchnama was made. Apart from recovery of few mobile phones and laptops, no amount of Indian or foreign currency, books of account and invoices seized. After the search, the petitioner was coerced and forced by Page No.5 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025the respondent to book a flight from Calcutta to Chennai in his name and he was brought to Chennai. Thereafter, he was forced to book a lodge in his name in Chennai and at that time, he was kept in confinement. Two officials of the respondent stayed with the petitioner. Thereafter, he was taken to the office of the respondent and statement under Section 50 of PMLA recorded by keeping the petitioner under threat, coercion and confinement. He would further submit that right from 10.12.2024 to 12.12.2024, the petitioner was kept under illegal custody and a case has been webbed around him. Hence, it is a clear violation of Section 19(3) of PMLA. He further submitted that in the grounds of arrest and reason to believe for arrest, it is recorded about the search of residential premises of one Abdul Jalil Molla on 10.12.2024 and from him contact details of the petitioner collected and on the same day, search was conducted in the premises of the petitioner and Panchnama prepared would confirm that it is highly unlikely to commence both searches on the same date and time simultaneously and the respondent projecting that it came to know about the petitioner after the search and enquiry with Abdul Jalil Molla, who is the sub agent of the petitioner. He further submitted that the search, seizure and Page No.6 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025drawing of Panchanama were authorized by the Assistant Director who is a Subordinate Officer and as per Section 17 of PMLA, it is only the Director or any Officer not below the Deputy Director is authorized. Hence, the entire proceedings initiated at the instance of the Assistant Director on 10.12.2024 and 11.12.2024 has got no sanction of law. He further submitted that the respondent cannot prosecute any person on notional basis or on assumption. In this case, there is no scheduled offence charged against the petitioner and there was no ground for considering that this petitioner has committed the offence of money laundering. It is projected as though the petitioner transacted the ill-gotten money which was used in committing cyber fraud in the account of Neela Sekhar which was thereafter credited to the account of Sagar Belwanshi and from there it was rooted to Abdul Jalil Molla who had withdrawn the amount and handed over to the petitioner, who in turn invested through BINANCE app, purchased crypto currency for Zeus of Hongkong.5.On a demurer, the learned counsel submitted that it is seen that the petitioner had not retained or benefited out of ill-gotten money and not Page No.7 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025projected the ill-gotten money as untainted money. Admittedly the petitioner acted as an agent for a small commission on the instructions of one Zeus and Alam. He further submitted that in this case neither Sagar Belwanshi nor Abdul Jalil Molla were arrayed as accused on the other hand, Abdul Jalil Molla listed as witness. Hence the respondent in a selective manner left the originator and the beneficiary of the entire amount and had made the petitioner a scape goat who earned a small commission. He would further submit that the respondent interrogated the petitioner and showed a statement of direct transfer of Rs.1,14,41,631/- from the bank account of the petitioner’s M/s.Hind Techno Services to M/s.Nikhat Industries for buying USDT from them but what had happened to M/s.Nikhat Industries and who are the persons behind it not investigated. He further submitted that now the respondent seized all the gadgets, digital transaction and bank transaction details that surrounds the petitioner. The petitioner cannot have any access to these materials and it is beyond his control. Hence, the apprehension that the petitioner would tamper the evidence will not arise. The petitioner has got deep social roots and he is living with his wife and children. The petitioner further undertakes to appear before the Trial Court Page No.8 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025without fail and would abide by any condition that would be imposed by this Court. Hence, prayed for bail.6.In support of his contention, the learned counsel for the petitioner relied upon the decision of this Court in the case of Sidhant Gupta vs. Assistant Enforcement Directorate [Crl.O.P.No.16848 of 2022 dated 23.08.2022], wherein this Court held that to proceed against a person whether he had committed any scheduled offences or not has to be confirmed and without existence of proceeds of crime, there cannot be any commission of offence of money laundering. He would further relied upon the decision of the Apex Court in the case of Manish Sisodia vs. Directorate of Enforcement [Criminal Appeal arising out of S.L.P.(Crl)No.8781 of 2024] wherein the Apex Court held that in PMLA case, bail is not be withheld as a punishment and further, the principle is that bail is a rule and refusal is an exception. He also relied upon the decision in the case of Senthil Balaji vs. The Deputy Director, Directorate of Enforcement [Crl.A.No.4011 of 2024] wherein the Apex Court reiterated the principle that bail is a rule and jail is an exception. The stringent Page No.9 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025provisions regarding the grant of bail such as Section 45(1)(iii) of PMLA cannot become a tool which can be used to incarcerate the accused without trial for an unreasonable long time. He would also relied upon the decision in the case of Sanjay Chandra vs. Central Bureau of Investigation reported in (2012) 1 SCC 40, wherein the Apex Court finding that the trial may take considerable time to progress and taking into consideration the period of incarceration, granted bail.7.The learned Special Public Prosecutor filed his counter and submitted that on the premise of registration of FIR No.411 of 2024 dated 25.11.2024 wherein Section 318(4) of BNS, 2023, was invoked, which is a Scheduled offence under PMLA, 2002, and on perceiving that prima-facie offence of Money Laundering defined under Section 3 of the Act is made out which is punishable under Section 4 of the Act, a case in Enforcement Case Information Report in ECIR/CEZO-1/17/2024 dated 09.12.2024 based on FIR No.411 of 2024 dated 25.11.2024 registered for conducting investigation under the provisions of PMLA, 2002 with an objective of preventing the offence of money laundering and punishing the offenders of Page No.10 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025money laundering, identifying and confiscation of proceeds of crime involved in money laundering by commission of offences vide above said FIR. Accordingly, investigation was initiated under PMLA, 2002. During investigation under PMLA, 2002, it revealed that Smt.Neela Sekhar (Complainant in the Predicate Offence) 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 such beneficiary account was found to be in the name of Mr.Abdul Jalil Molla (having A/c No. 3285010056143823 with Jana Small Finance Bank, Kalyani, West Bengal), who received Rs.10,00,000/- from the account of Mr.Sagar Belwanshi. Analysis of the said bank account of Md.Abdul Jalil Molla revealed that the entire amount was withdrawn in cash immediately on the same day i.e., 21.11.2024 itself after receipt of Rs.10,00,000/- from account of said Mr.Sagar Belwanshi. During the course of investigation, search and seizure action under Section 17 of the PMLA, 2002 was conducted on the Page No.11 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025residential premises of the Petitioner, Md.Abudl Jalil Molla and other connected individuals under the reasonable belief that the said persons were in possession of proceeds of crime and records related to money laundering. During the course of search operations, various digital devices were seized under Section under Section 17 (1) of PMLA, 2002, based on reasonable belief that the same contained crucial secretive information related to the acquisition, possession and use of proceeds of crime. 8.He would further submit that with respect to the amount of Rs.10,00,000/- received on 21.11.2024 in the bank account of Mr.Abdul Jalil Molla from the bank account of Mr.Sagar Belwanshi (who in turn had received Rs.33 Lakhs from the account of Smt.Neela Sekhar, Victim/Complainant in Predicate Offence), it is revealed that Rs.9.80 Lakhs was handed over in cash to Md.Sahidul Islam by Abdul Jalil Molla. The petitioner in his statement stated that he had taken Rs.9.80 Lakhs in cash from Abdul Jalil Molla on 21.11.2024. After receipt of funds in the account of Md.Abdul Jalil Molla, the petitioner transferred equivalent USDT to Mr.Alam. It is further corroborated from the statement of Mr.Wasim Hasan Page No.12 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025under Section 50 of PMLA, 2002, that on 21.11.2024, the petitioner enquired with him about availability of USDT and on confirmation of availability of USDT, the petitioner asked him to come to his office at Kaikhali, Kolkata, to collect cash. Thereafter, the petitioner asked him to come to his office to collect cash. Accordingly, in the evening of 21.11.2024, Mr. Wasim Hasan transferred USDT 20,500 in wallet address 0x977b89d537de672c89c2890a6e1811d8207ee779 shared by the petitioner and then, he immediately went to office of the petitioner and took cash of around Rs.9 Lakhs. The total amount against USDT 20,500 transferred by him was around Rs.18 Lakhs. The remaining amount (apart from cash of around Rs.9 Lakhs) was directly transferred by the petitioner in bank account given by Mr.Wasim Hasan. The USDT received from Mr.Wasim Hasan was then transferred by the petitioner to Mr.Alam immediately. Thus, it is evident that proceeds of crime in the form of cash of Rs.9.80 Lakhs withdrawn from the account of Md.Abdul Jalil Molla was utilized by the petitioner for getting USDT from Mr.Wasim Hasan. Thereafter, he utilized the same for converting it into USDT by paying in cash to Mr.Wasim Hasan and ultimately, he transferred the USDT acquired so to Mr.Alam. Thus, it is Page No.13 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025evident that the petitioner is actively involved in acquisition, possession, use and transfer of proceeds of crime related to a criminal activity (as per FIR No.411 of 2024 dated 25.11.2024) related to a scheduled offence and he is actively involved in laundering of the funds generated from the cyber crime/digital fraud. The trail of proceeds of crime with respect to said Rs.10,00,000/- is as below:9.It is further revealed from the Whatsapp chat history of the petitioner with Zeus and Mr.Alam that he was aware that the funds received Page No.14 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025in the mule bank accounts shared by him were scam funds and the mule bank accounts were prone to get frozen/marked lien. Despite this, he deliberately negotiated with them and continued USDT dealing with them. In the process, the mule bank accounts used the petitioner frozen/put on hold by the concerned Banks based on directions received from various Law Enforcement Agencies and therefore, the petitioner used to get hold of further new mule accounts to carry on the illegal USDT transfers. He derived/fetched commission/margin through the said illegal USDT transfers. The mobile number +91 8609163726 (linked to Binance Account ID: 1019571414) was being used by the petitioner in his mobile phone Samsung Galaxy A7 Mobile having Model No.SM-A750F/DS, Serial No.RZ8KA2QC10H, IMEI1:351578106300304, IMEI2:351579106300302. Further, the mobile number +91 8981043988 (linked to Binance Account ID: 971348823) was being used by the petitioner in his mobile phone One Plus Nord CE4 Mobile having Serial No. 5bdfbc63, IMEI1:867296078481658 and IMEI2:867296078481641. Both these mobile phones were seized from the petitioner under Section 17 (1) during search proceedings at his office premises on 10.12.2024 and 11.12.2024. It Page No.15 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025is further observed that the petitioner transferred 894,835 USDT from the Binance Account ID 971348823 and 41,586 USDT from the Binance Account ID 1019571414. It is further gathered during the investigation under PMLA, 2002, that the petitioner used multiple mule bank accounts to receive funds against transfer of USDT to the persons abroad. So far, 13 mule bank accounts have come to knowledge and total amount received in these accounts is Rs.2.12 Crore. The said aggregate amount of Rs.2.12 Crore 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 were generated out of criminal activity relating to scheduled offences. Thus, as per investigation done so far, the petitioner received proceeds of crime to the tune of Rs.2.12 Crores and layered and integrated the same by converting it into crypto currency by paying in cash to conceal the origin of the proceeds of crime.10.Further, the petitioner used to open multiple new accounts in the name of other persons by offering some commission, as these bank accounts Page No.16 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025were frequently frozen by different Law Enforcement Agencies for being involved in receipt of funds generated from cyber/ digital fraud or related crimes. It is further revealed from the whatsapp chats extracted from his mobile phones seized during the searches on 10.12.2024 that he was in contact with some unknown persons using phone number of foreign countries and he used to transfer USDT on daily basis to these persons by receiving funds in the bank accounts (in the name of Md.Abdul Jalil Molla and other persons) being controlled by him. Thus, it is evident from the above that the Petitioner herein was very well aware about the origin and nature of the funds being received in the bank accounts under his control despite that he continued the same modus operandi and derived benefits from the same. Further, the Petitioner received proceeds of crime into the accounts under his control and transferred equivalent amount to persons suspected to be operating from abroad in the form of Crypto Currency (USDT) through the Binance IDs opened in the name of other persons. It is also revealed during the investigation that the Petitioner created Binance ID in the name of other persons to transfer USDTs. He would submit that the amount received from various accounts as per details given by Zeus are the Page No.17 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025ill-gotten money. Thus the petitioner used to trade, convert to USDT by paying cash to them, transfer USDT to account of Zeus and thus, played a live role in projecting tainted money into untainted money. Hence, prayed for dismissal.11.In support of his contentions, the learned Special Public Prosecutor relied upon the decisions of the Apex Court in the cases of Vijay Madanlal Choudary and others vs. Union of India reported in 2022 Livelaw (SC) 633 and The Union of India through the Assistant Director vs. Kanhaiya Prasad reported in 2025 SCC Online SC 306 for the point that offence of money laundering is an independent offence, regarding the process or activity connected with the proceeds of crime, which had been derived or obtained as a result of criminal activity relating to or in relation to a schedule offence. It is not a condition precedent that the petitioner must be an accused in the predicate offence, to proceed against him under PMLA, the only requirement is that proceeds of crime derived or obtained as a result of that crime is sufficient. The learned Special Public Prosecutor referred to the decision of the Apex Court in the case of Pramod Kumar Page No.18 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025Saxena vs. Union of India reported in 2008 (9) SCC 685 for the point that mere long period of incarceration in jail would not be per se illegal, if the petitioner has committed offences, he has to remain behind bars and such detention in jail even as an under-trial prisoner would not be violative of Article 21 of the Constitution of India. Further, the twin conditions under Section 45 of PMLA needs to be satisfied. 12.Considering the rival submissions, it is seen that in this case the petitioner was arrested on 12.12.2024, prior to it on 10.12.2024 and 11.12.2024 the petitioner’s house and other premises were searched and incriminating materials, including the electronic gadgets seized. For the purpose of further enquiry, the petitioner was summoned to the office of the respondent. The petitioner came to Chennai, appeared before the respondent and his statement under Section 50 of PMLA recorded. The petitioner’s statement along with the electronic data and other documents and the statements of Abdul Jalil Molla and Subham Belwanshi confirmed the active role played by the petitioner. It was found that the petitioner utilizing and operating the accounts of Abdul Jalil Molla, biswajit Majhi, Page No.19 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025Rakib Mali, Raju Mali, Akib Hasan SK and Monirul SK and collecting cash from them on the transfer of funds made as per the instructions given by the operators in abroad, namely, Zeus and Alam. Further, from the statement of Gopal Jha, Rahatulla Sk, Ibrahim Ali and Wasim Hasan @ Saif, the petitioner’s involvement in crypto currency, USDT is confirmed. The petitioner is the connecting point to both ends i.e., getting instructions from operators abroad about the credit to the accounts of the persons herein and through mule accounts, the petitioner operating both set of accounts and thereafter receiving the cash, purchasing USDT, making payments and crediting USDT to the operators in abroad. Thus the petitioner is the fulcrum and main connecting lead for the entire operations of money laundering. It is not a solitary incident of Rs.33,00,000/- illegally cheated and received from Smt.Neela Sekhar, the amounts thereafter transferred to the bank account of Sagar Belwanshi on 21.11.2024, on the same day, Sagar Belwanshi transferred this ill-gotten money to various accounts and Rs.10,00,000/- was transferred to the bank account of Abdul Jalil Molla, who withdrew the entire amount and handed over to the petitioner. During investigation, the other episode of the petitioner come to light. It is seen Page No.20 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025that Abdul Jalil Molla is a witness in this case, who speaks about the entire transaction, not about one incident but for various transactions over a period of time by which the petitioner is involved. Further, from analysis of the bank account under the control of the petitioner reveal that the petitioner received amounts from 14 persons. A scanned reproduction of the list of persons from whom the petitioner channelised, received and handled the amount is as follows:Page No.21 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025Page No.22 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025It is also seen that all the accounts are grey accounts, investigated by Cyber Crime Police for cyber offences. It is to be seen that the petitioner by using mule account dealing in USDT. Page No.23 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 202513.Though the petitioner's contention that BINANCE account is permitted and lawful and petitioner had involved himself for a small commission and he is not the person who involved in any cyber offence or purchased and holding USDT, cannot be accepted. BINANCE is an application through which you can buy Bitcoins and Crypto currencies. In BINANCE it should be between Peer-to-Peer (P2P). Further, in all these transactions, there should be strict compliance of KYC norms. From the above, it is seen that KYC norms flouted, there are only named lenders and further the petitioner operated mule accounts, thereby layering the ill-gotten money, projecting it as untainted amount and converting and transferring the same into crypto currency. Further, in the petitioner's GST Account, none of the transactions reflected and the petitioner not disclosed the same as an income. As per the Income Tax Act, 30% of the transaction value has to be remitted as tax. It is seen that further investigation is in progress with regard to 14 accounts as stated above and the statement of mule account holders confirmed the case of the prosecution. In this case, investigation is going on with regard to complexity and diversion of funds involving cyber Page No.24 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025offence. In view of the above, this Court is not inclined to grant bail to the petitioner for the present.14.Accordingly, the Criminal Original Petition stands dismissed.20.08.2025Speaking 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, Nungambakkam, Chennai.2.The Special Public Prosecutor (ED), Madras High Court.Page No.25 of 26 https://www.mhc.tn.gov.in/judis Crl.O.P.No.12116 of 2025M.NIRMAL KUMAR, J.csePre-delivery order made in Crl.O.P.No.12116 of 202520.08.2025Page No.26 of 26