The Delhi High Court, in a significant ruling, has clarified that foreign recipients of proceeds of crime cannot escape scrutiny under the Prevention of Money Laundering Act, 2002 (PMLA), merely on the basis of contractual legitimacy. Justice Ravinder Dudeja made this observation while rejecting the anticipatory bail plea of Amrit Pal Singh, a Hong Kong resident and Director of M/s Broway Group Ltd.
Singh’s company had received ₹20.75 crores (USD 2.88 million) from M/s Mizta Tradex Pvt. Ltd., allegedly for importing semiconductor devices. The Enforcement Directorate (ED) claimed this amount was part of larger fraudulent remittances made through shell companies, without genuine trade, and that the funds were layered to appear legitimate.
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“The decision in Vijay Madanlal Choudhary v. Union of India does not exempt foreign recipients from scrutiny merely on the basis of asserting contractual legitimacy,” the Court emphasized.
The Court noted that although Singh was not named in the predicate FIR filed by Delhi Police’s Economic Offences Wing, ED had attributed proceeds of crime to his company. It relied on Section 24 of the PMLA, which presumes guilt once possession of crime-linked property is established—placing the burden on the accused to prove otherwise. Singh failed to provide adequate documentation to rebut this presumption.
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Singh’s plea cited legitimate business dealings, complete with invoices and import documents. However, the Court observed that the legitimacy of these transactions was in serious doubt due to allegations of forged documents and fake transactions. The claim of business legitimacy, in such cases, could not be taken at face value.
Further, the Court highlighted Singh’s repeated non-compliance with ED summons issued under Section 50 of the PMLA. Despite claiming his father's ill health as the reason for his non-appearance, the Court held this excuse lacked credibility due to absence of supporting proof.
“The applicant’s sustained non-cooperation and evasion reflect a lack of bona fides essential for anticipatory bail,” the Court remarked.
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It also observed that Singh posed a potential flight risk given his permanent residence in Hong Kong and lack of significant ties in India. The ED had intercepted him at Amritsar Airport during a visit, which the Court did not consider a voluntary act of submission to jurisdiction.
Rejecting Singh's arguments of being arrayed in a representative capacity only, the Court stated that as the sole director of a one-person company, he was not a mere figurehead. His control over the company made him directly accountable.
In conclusion, the Court found that Singh did not meet the twin conditions under Section 45 of the PMLA — namely, there was no reasonable ground to believe he was not guilty, nor any assurance that he wouldn’t commit another offence if granted bail.
Accordingly, the anticipatory bail application was dismissed.
Case title: Amrit Pal Singh v. ED
Case no.: BAIL APPLN.1322/2025