Bombay High Court declares ED arrest illegal in alleged Rs 7,569 crore remittance case
The Bombay High Court held an ED arrest illegal and ordered the accused freed in a case where the prosecution alleges Rs 7,569 crore was sent abroad through mule bank accounts.
Key points
- The Bombay High Court on 27 October 2026 declared the ED's arrest of an accused under Section 19 of the PMLA illegal and ordered his release.
- A chargesheet alleges Rs 7,569 crore was remitted abroad through 269 mule bank accounts opened with KYC documents obtained on false pretexts.
- The court found the accused had given statements 38 times and that the ED had no fresh material; the allegations still have to be tested at trial.
The Bombay High Court on 27 October 2026 declared illegal the Enforcement Directorate's arrest of an accused in a money-laundering case over foreign remittances of Rs 7,569 crore that the prosecution alleges were made through mule bank accounts. The court set aside three remand orders of a special PMLA court in Mumbai, ordered the accused's immediate release and refused the ED's request to put its order on hold for two weeks.
What Happened
According to the judgment, Thane police registered a case on 6 October 2023 under cheating and forgery provisions of the Indian Penal Code and the Information Technology Act. The ED registered its money-laundering case on 26 December 2023, showing proceeds of crime of Rs 1,618 crore. A supplementary chargesheet alleges that the accused and others set up 97 partnership firms and 18 private companies in the names of people whose KYC documents were obtained on the pretext of a loan or a job, and opened 269 mule bank accounts. It alleges that forged invoices and bills of lading were used to remit Rs 7,569 crore abroad to evade customs duty on under-invoiced imports.
The accused, first arrested in March 2024 and granted bail in June 2024, was arrested again by the ED on 23 June 2026. The court found that he had given statements 38 times over 18 months and had cooperated. It held that the ED, having already sought the special court's leave to confront him with the material it held, could not arrest him under Section 19 of the PMLA on the same material without fresh evidence or an urgent new circumstance, and none had arisen.
What It Means
The ruling holds that an ED arrest must rest on recorded reasons and material showing it is needed, and that courts can review whether those safeguards were met. It does not end the case. These are allegations, not findings of guilt; the accused are presumed innocent until proven guilty in court, and due process continues.
The allegations also show how KYC documents handed over for a promised loan or job can be used to open accounts in a person's name. Anyone who suspects their identity has been misused can report it at https://cybercrime.gov.in or on helpline 1930.
Source: High Court judgment
Sources & Citations
- High Court judgment — Bombay High Court