On 10 August 2026, Justice Purushaindra Kumar Kaurav of the High Court of Delhi dismissed a bail application under the Prevention of Money Laundering Act, 2002 in Rohit Vij v. Directorate of Enforcement, Bail Appln. 4461/2025. The judgment addresses a question that arises with increasing frequency: if the criminal case from which the alleged proceeds of crime originate is settled or quashed on compromise, does the money laundering case fall with it? The Court answered that it does not — and went on to apply the rigorous twin conditions of Section 45 to refuse bail.
The case in outline
The applicant was arrested in a money laundering investigation arising out of an investment-app fraud. The Directorate of Enforcement alleged that he beneficially controlled two money changing companies through dummy directors, and that these entities were used to convert the proceeds of an online fraud into foreign currency and cash. Bank records placed before the Court were said to show tens of crores of rupees moving through the two companies, with a money trail chart depicting several hundred crores routed through the wider scheme.
The application was filed under Section 483 of the Bharatiya Nagarik Suraksha Sanhita, 2023 — the provision corresponding to Section 439 of the Code of Criminal Procedure, 1973 — read with the special conditions in Section 45 of the Prevention of Money Laundering Act, 2002.
Compromise of the predicate offence
The applicant's central legal argument was that the predicate offence — the scheduled offence from which the alleged proceeds of crime derived — had been compromised, and that the PMLA case could not survive its foundation. The Court drew a distinction that practitioners should note carefully.
Quashing on merits
Where a court quashes the predicate offence on a finding rendered on merits — discharge, acquittal, or quashing because no offence is made out — the basis for alleging proceeds of crime disappears, and the PMLA proceedings cannot stand.
Closure by compromise
Where the predicate offence ends in a compromise or settlement, no judicial finding is recorded on whether proceeds of crime exist. The Court held that such a closure does not erase the money laundering investigation, which operates on a broader plane than the individual complainant's grievance.
The judgment observed that where the predicate offence is quashed on the basis of a compromise, "there is no finding rendered on the existence of the proceeds of crime." On the facts, the Court also noted material suggesting the complainant's withdrawal was not free of coercion — a further reason not to treat the settlement as dispositive.
Section 45: how the twin conditions were applied
Section 45 of the PMLA requires the court, before granting bail, to record satisfaction on two counts: that there are reasonable grounds for believing the accused is not guilty of the offence, and that the accused is not likely to commit any offence while on bail. The Court rejected the submission that these conditions were inapplicable because the proceeds attributable to the applicant were said to be modest, holding that the Act reaches proceeds of crime handled "directly or indirectly" and that the ED's investigation is not confined by the arithmetic of the original FIR.
Economic offences and the bail calculus
The judgment reaffirms the settled position that economic offences form a class apart in bail jurisprudence. Money laundering, the Court observed, is an aggravated form of crime that affects the financial system itself, and the stringency of Section 45 reflects a legislative judgment about that gravity. The application was accordingly dismissed, the Court recording that it was not satisfied on either limb of the twin conditions.
What the decision means in practice
Three practical lessons emerge. First, settling the underlying dispute does not, by itself, dissolve exposure under the PMLA; only a merits-based termination of the predicate offence has that effect. Second, conduct during the investigation — attendance on summons, candour with courts, and travel — weighs heavily at the bail stage, because it speaks directly to the second Section 45 condition. Third, parity arguments in multi-accused PMLA cases turn on role, not merely on the fact that another accused has been released.
The judgment records prima facie findings for the purpose of bail only; nothing in it determines the guilt or innocence of any accused, which remains a matter for trial. This article is for general information and is not legal advice.
Frequently Asked Questions
If the FIR underlying a PMLA case is quashed, does the ECIR also end?
It depends on how the FIR ends. Where the predicate offence is quashed on a judicial finding on merits — for instance, that no offence is made out — the foundation of the PMLA case is erased. Where the FIR is closed on a compromise between the parties, there is no finding on the existence of proceeds of crime, and the Court held the money laundering investigation can continue.
What are the twin conditions for bail under Section 45 of the PMLA?
Before granting bail, the court must be satisfied that there are reasonable grounds to believe 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. Both conditions must be met in addition to the ordinary considerations that govern bail.
Are statements recorded by the ED under Section 50 of the PMLA admissible?
Yes. The judgment reiterates that statements recorded under Section 50 of the PMLA hold evidentiary value and are admissible in legal proceedings, unlike confessions made to police officers in ordinary criminal cases. Courts may rely on them at the bail stage to assess the prima facie case.
Does parity with a co-accused who has bail help in a PMLA case?
Only where the roles are genuinely comparable. In this case the Court declined parity with a co-accused already on bail because it found, prima facie, that the applicant was alleged to be the principal figure in the scheme rather than a mere operator, which justified different treatment.