Delhi High Court Grants Bail in High-Profile Money Laundering Case: A Landmark Ruling on Women Accused Under PMLA

Introduction: The Intersection of Law, Gender, and Justice

In a significant ruling delivered on December 27, 2025, the Delhi High Court, presided over by Hon’ble Dr. Justice Swarana Kanta Sharma, granted regular bail to Sandeepa Virk in a high-stakes money laundering case registered by the Directorate of Enforcement (DoE). The case, ECIR/HIU-II/24/2025, under the Prevention of Money Laundering Act (PMLA), 2002, has drawn considerable attention due to its complex factual matrix, the prolonged timeline of events, and the critical legal questions it raises—particularly concerning the applicability of bail conditions for women accused under Section 45 of the PMLA.

This judgment not only offers relief to the applicant but also serves as a crucial judicial pronouncement on the interpretation of legal safeguards for women in stringent anti-money laundering laws. In this detailed analysis, we will unpack the facts, arguments, legal principles, and the court’s reasoning that culminated in this landmark decision.

 Case Background: From Film Fraud to Money Laundering

The origins of this case trace back to an FIR registered in 2016 (FIR No. 91/2016) at Police Station Phase-8, SAS Nagar, Mohali, under Sections 406 (criminal breach of trust) and 420 (cheating) of the Indian Penal Code. The complaint alleged that the accused, including Amit Gupta @ Nageshwar Gupta and Sandeepa Virk, duped the complainant and her family of approximately ₹6 crores. The modus operandi involved promising the complainant the lead role in a film and inducing her to invest in its production.

While a chargesheet was filed in 2017, it named only Amit Gupta. The complainant later filed a private complaint in 2017, but the magistrate took cognizance only against Amit Gupta, noting that a substantial amount (₹2.71 crores) had already been refunded. Amit Gupta was eventually declared a proclaimed offender in October 2024.

Fast forward to August 2025: the DoE recorded an Enforcement Case Information Report (ECIR) under the PMLA, alleging that the proceeds of the cheating crime were laundered. Sandeepa Virk was accused of receiving about ₹1.03 crores from the tainted funds, using them to acquire properties—including a flat in Mumbai and two in Delhi—and living a luxurious lifestyle. She was arrested on August 12, 2025, and her first bail application was rejected by the Special Court in November 2025.

 Key Submissions: The Battle of Arguments

 For the Applicant (Sandeepa Virk):

1. No Role in Predicate Offence: She was neither chargesheeted in the 2016 FIR nor summoned in the private complaint. The magistrate had explicitly found no offence made out against her.

2. Delayed ECIR: The PMLA case was initiated nine years after the predicate offence, with arrest within 24 hours of ECIR registration—allegedly arbitrary and contrary to Section 19 of PMLA.

3. Selective Arrest: The main accused, Amit Gupta, remains at large despite being a proclaimed offender, while she, a woman with no prior role, was arrested.

4. Gender-Based Relief: As a woman, she falls under the first proviso to Section 45 of PMLA, exempting her from the stringent “twin conditions” for bail.

5. No Flight Risk: She has deep roots in society, the prosecution complaint is already filed, and custodial interrogation is no longer needed.

For the DoE:

1. Distinct Offence: Money laundering is independent of the predicate offence. Even if not involved in the original crime, she can be guilty of laundering proceeds.

2. Evidence of Laundering: She received ₹1.03 crores in her account, used it to buy properties, and projected tainted money as untainted.

3. Destruction of Evidence: She deliberately destroyed her mobile phone before the search.

4. Discretionary Proviso: The proviso for women does not grant automatic bail; the court must consider gravity, evidence, and involvement.

5. Trial Can Be Expedited: Only 24 witnesses are cited; delay is not inevitable.

Legal Analysis: The Court’s Reasoning

1. Applicability of Section 45 PMLA to Women Accused

This was the pivotal legal issue. Section 45 of PMLA imposes “twin conditions” for bail: the court must be satisfied that the accused is not guilty and will not commit any offence while on bail. However, the first proviso states that these conditions “shall not apply” to a woman, among others.

The DoE argued that the proviso uses “may be released,” implying discretion, not an entitlement. The court, however, relied on the Supreme Court’s ruling in Shashi Bala @ Shashi Bala Singh v. Directorate of Enforcement (2025), where it was unequivocally held that the twin conditions do not apply to women under the PMLA. The Solicitor General himself conceded this point before the Supreme Court.

Thus, Justice Sharma held that Sandeepa Virk’s bail application must be considered on general bail principles, not the rigours of Section 45(1)(ii).

 2. Prima Facie Case for Bail

Even assuming the DoE’s argument that discretion is required, the court found a strong prima facie case for bail:

1. Non-Involvement in Predicate Offence: She was cleared by both police investigation and judicial magistrate proceedings.

2. Substantial Refund: ₹2.7 crores had already been returned to the complainant, reducing the alleged laundered amount.

3. Delay and Latency: The ECIR came nine years after the predicate offence, with no explanation for the delay.

4. Main Accused Unarrested: Amit Gupta, the proclaimed offender and alleged mastermind, remains free, making the applicant’s arrest appear selective.

5. Completed Investigation: The prosecution complaint is filed; no further custodial interrogation is needed.

6. Long Incarceration: She had been in judicial custody for over four months.

3. Destruction of Mobile Phone: A Weak Allegation

The court implicitly downplayed the DoE’s allegation of evidence destruction, noting it was “disputed and unsupported by any material at this stage.” This suggests that mere assertion without corroboration is insufficient to deny bail.

The Judgment: Bail Granted with Conditions

The court granted regular bail upon furnishing a personal bond of ₹2 lakhs with two sureties (one a family member), subject to conditions:

1. Mobile Accessibility: Provide an active, always-on mobile number to the IO.

2. Passport Surrender: Surrender passport and seek court permission for travel.

3. Address Intimation: Provide and update residential address.

4. Cooperation: Cooperate with further investigation and trial.

5. Non-Interference: Not tamper with evidence or influence witnesses.

6. Court Attendance: Regularly attend trial proceedings.

Crucially, the court clarified that its observations are not on the merits of the case, preserving the prosecution’s right to a fair trial.

Broader Implications: What This Ruling Means

1. Gender Justice in Harsh Laws

This judgment reinforces the legislative intent to provide compassionate treatment to women under stringent statutes like PMLA. It affirms that gender-based exemptions are substantive rights, not mere procedural formalities.

2. Check on Arbitrary Arrests

The court’s scrutiny of the delayed ECIR and selective arrest highlights judicial vigilance against potential misuse of power by agencies. It underscores that arrest under PMLA must be justified, not mechanical.

3. Interplay Between Predicate Offence and PMLA

While PMLA is an independent offence, the court acknowledged that the absence of involvement in the predicate offence is a relevant factor in bail considerations, especially when coupled with procedural delays.

4. Emphasis on Personal Liberty

The ruling balances the state’s interest in combating economic crimes with the fundamental right to liberty. It reiterates that bail is the rule, jail the exception—even under PMLA.

 Critical Reflections: Unanswered Questions and Future Litigation

While this judgment is a victory for individual liberty, it leaves some questions open:

a. Will this encourage more bail pleas from women under PMLA? Likely yes, but courts will still assess each case on facts.

b. Does this weaken the PMLA’s deterrence? Not necessarily—it merely ensures that bail provisions are applied fairly.

c. What about the destroyed mobile phone? The DoE may still pursue this at trial, but its failure to prove it at the bail stage weakened their case.

The ruling also sets a precedent for future cases where accused persons are not primary offenders but are entangled in PMLA proceedings due to financial transactions.

Conclusion: A Balanced Approach to Justice

Justice Swarana Kanta Sharma’s judgment in Sandeepa Virk v. Directorate of Enforcement is a nuanced, well-reasoned decision that upholds both the letter of the law and the spirit of justice. It demonstrates that even under a rigorous statute like PMLA, courts can—and must—weigh individual circumstances, procedural history, and constitutional guarantees.

For Sandeepa Virk, it means freedom after months in custody. For the legal system, it is a reminder that fairness and proportionality must guide even the most complex economic crime prosecutions. As PMLA cases continue to rise, this judgment will serve as a crucial reference point for balancing enforcement efficacy with fundamental rights.