Introduction:
In the case titled Vipin Yadav v. Directorate of Enforcement & other connected matters [2025 LiveLaw (Del) 1203], the Delhi High Court, presided over by Justice Amit Mahajan, considered bail pleas filed by three accused—Vipin Yadav, Ajay, and Rakesh Karwa—in a large-scale money laundering case involving an alleged fraud of ₹641 crores. The Enforcement Directorate (ED) alleged that the applicants, along with other individuals, duped citizens through fake investment schemes, fraudulent job offers, and other cyber fraud activities. The investigation revealed a massive network of mule accounts, cryptocurrency dealings, and layering of illicit funds through various entities and digital wallets. While the applicants were arrested, the main accused, Rohit Aggarwal, against whom graver allegations were levelled, was neither arrested nor arraigned with the same rigour, despite being identified as a central figure in the laundering scheme. This inconsistency in ED’s approach became a focal point of the Court’s scrutiny, with Justice Mahajan describing the department’s selective action as “manifestly arbitrary.” The Court observed that the applicants’ roles were not more severe than Aggarwal’s and that denying them bail while allowing the main accused to remain free offended the principle of parity. Taking into account the ongoing investigation, the preliminary stage of trial, the large number of witnesses, and the applicants’ clean antecedents, the Court granted them bail.
Arguments of the Petitioners:
On behalf of the applicants, it was argued that they were falsely implicated and that their involvement, if any, was peripheral compared to the main accused Rohit Aggarwal. Counsel submitted that the ED was relying primarily on the statements of co-accused Aggarwal to implicate the applicants, but Aggarwal himself had not been arrested despite allegedly being the key conspirator. The petitioners maintained that they had not participated in the generation of proceeds of crime but were merely linked to certain transactions at later stages, which did not warrant custodial detention. They emphasised that ED could not cherry-pick whom to arrest and whom to spare, particularly when the person with a graver role was left untouched. It was further contended that the prosecution complaint had already been filed without Aggarwal’s arrest, despite ED alleging that the majority of tainted funds originated from him. The applicants also argued that prolonged incarceration in a case where the trial was unlikely to conclude soon amounted to a violation of their right to liberty and a speedy trial under Article 21 of the Constitution. They highlighted that the case involved a voluminous record with 76 witnesses in the main complaint and 35 in the supplementary complaint, making it impossible for the trial to conclude expeditiously. The applicants had no past criminal record and there was no apprehension that they would tamper with evidence or abscond while on bail.
Arguments of the Enforcement Directorate:
The ED, represented before the Court, opposed the bail pleas by stressing the seriousness of the offence and the magnitude of the fraud, which amounted to ₹641 crores. According to the ED, the applicants were not mere bystanders but active participants in managing and operating mule accounts, layering proceeds of crime, and concealing their origins through cryptocurrency transactions. It was alleged that accused Ajay deliberately evaded queries, withheld documents, and failed to explain the source of funds uploaded on Pyypl Wallet, while accused Vipin Yadav, despite admitting crypto dealings, concealed crucial agreements and records. Regarding Rakesh Karwa, the ED argued that he had shown “extreme defiance” by fleeing during a search, destroying digital evidence, and ignoring repeated summons. The agency asserted that the applicants’ conduct showed a clear intention to obstruct the investigation. As for Rohit Aggarwal, the ED contended that he had extended full cooperation, voluntarily disclosing his bank accounts, cryptocurrency wallets, mule entities, and details of transactions, which reduced the necessity of his arrest. The ED maintained that cooperation with investigation is a relevant factor and that the applicants’ evasive conduct distinguished them from Aggarwal. Therefore, their arrest was justified, and bail should not be granted at this crucial stage of investigation.
Court’s Observations and Judgment:
Justice Amit Mahajan examined the rival submissions and scrutinised the record. The Court noted that while the applicants were accused of participating in transactions linked to the laundering of proceeds of crime, the ED’s own case placed Rohit Aggarwal at the epicentre of the fraudulent scheme. It was he who was alleged to have collected the bulk of the proceeds of crime and channelled them through mule accounts and cryptocurrency wallets. Despite this, ED chose not to arrest him while arresting the applicants, who appeared to be at “the penultimate rung of the transaction.” The Court observed:
“Having not arrested an accused who appears to have a graver role than the applicants and not even arraigned a person named to have facilitated in arranging the mule accounts, the approach adopted by the respondent department prima facie appears to be manifestly arbitrary and the benefit of parity cannot be denied to the applicants.”
With respect to Rakesh Karwa, the Court noted that according to ED’s own case, funds received by him were transferred to other individuals, including Rohit Aggarwal, and cryptocurrency received was transferred into private wallets. His role, therefore, was no graver than that of Aggarwal, yet only he was arrested. The Court found it untenable that a prosecution complaint had been filed on 25.01.2025 without Aggarwal’s arrest, while the applicants continued to languish in custody.
The Court also highlighted that the matter was still at the stage of cognizance with the investigation in the predicate offence incomplete. The applicants had already spent several months in custody—Ajay and Vipin since November 2024 and Rakesh since January 2025. With over 100 witnesses to be examined across the prosecution complaints, the Court held it “highly unlikely” that the trial would conclude in the near future. Reiterating that prolonged incarceration in the absence of trial progress is unjustified, the Court said: “It is not just the period spent in incarceration but also the possibility of delayed trial that is to be seen by the Court.”
The Court took into account that the applicants had no previous criminal involvement and were unlikely to commit any offence whilst on bail. It further observed that the trial had not even commenced in the predicate or scheduled offences, and in such circumstances, liberty could not be curtailed indefinitely. Justice Mahajan concluded that the principle of parity, coupled with the right to liberty and the presumption of innocence, warranted the release of the applicants on bail.
Accordingly, the bail pleas of Vipin Yadav, Ajay, and Rakesh Karwa were allowed. The Court emphasised that its decision was not to undermine the seriousness of the allegations but to strike a balance between the interest of investigation and the constitutional rights of the accused.
Broader Implications:
This ruling has larger implications for money laundering cases investigated under the Prevention of Money Laundering Act (PMLA). First, it highlights judicial concern over selective arrests by enforcement agencies, particularly where individuals with graver roles are spared. By calling out ED’s approach as “manifestly arbitrary,” the Court underscored the need for fairness, transparency, and non-discrimination in investigative actions. Second, it reiterates the principle that parity among co-accused is an important consideration in bail matters, especially where the main conspirator is not in custody. Third, it strengthens jurisprudence around speedy trial as a constitutional right, clarifying that prolonged pre-trial detention cannot be justified solely on the seriousness of allegations when trial completion is remote. Finally, the judgment adds to the growing body of decisions where courts are balancing individual liberty with the objectives of stringent economic offences laws, ensuring that investigation does not become a tool for arbitrary incarceration.