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Rejects Rohit Vij Bail, Rules Case Survives Compromise
In a ruling with significant implications for money laundering prosecutions, the has dismissed the bail application of Rohit Vij, alleged beneficial owner of two forex companies at the centre of a ₹766-crore laundering network linked to fraudulent investment apps. Justice Purushaindra Kumar Kaurav held that proceedings survive even where the is quashed on a compromise — closing a potential loophole that could otherwise allow accused persons to defeat laundering charges by settling with complainants.
The LOXAM Fraud and the Money Trail
The case traces back to FIR No. 1352/2022, registered by the , on , following a complaint by Mohd. Ghouse Pasha, who was defrauded of ₹1.16 lakhs through the investment app 'LOXAM', which promised high returns. An was registered on , triggering a investigation.
The probe revealed a coordinated network: victim funds were deposited into shell companies including Xindai Technologies Pvt. Ltd. and Betench Networks Pvt. Ltd., which then routed monies to Ranjan Moneycorp Pvt. Ltd. and KDS Forex Pvt. Ltd. — entities the alleges were beneficially owned and controlled by Vij. Approximately ₹766 crores flowed through these companies, with funds ultimately converted into cash and foreign currency, and dispatched to Dubai and China through channels.
The Court noted the employed — including daily wage labourers paid ₹5,000 to ₹85,000 for their identities — to conceal the true ownership of the forex businesses.
Arguments Before the Court
For the applicant , submitted three principal contentions: Rohit Vij was neither named in the FIR nor the chargesheet; the amounted to only ₹1.16 lakhs, rendering inapplicable; and since the FIR had been quashed following a compromise, proceedings could not continue. He also claimed parity with co-accused Bhupesh Arora, who was granted bail earlier.
For the , countered that Vij was the "principal mastermind" of a cross-jurisdictional, multi-crore scam. He highlighted that the original complainant, Mr. Pasha, had alleged he was coerced and threatened into withdrawing his FIR, that 24 additional FIRs had been incorporated into the via addendum, and that the applicant had attempted to flee the country despite ongoing investigation.
Proceedings Survive Compromise-Based Quashing
Addressing the preliminary objection, the Court drew on to distinguish between quashing on merits and quashing on compromise. Where a is quashed on merits with a judicial finding that the offence never occurred, the prosecution must necessarily fail — because could never have been generated. However, where the quashing results from a settlement, no such finding exists.
"Where the gets quashed on the basis of a compromise/agreement there is no finding rendered on the existence of the . The proceedings get scuttled before a judicial mind could get applied on the existence of the . In such a case, a conclusion, , cannot be reached that no were ever generated."
The Court warned against allowing such compromises to frustrate laundering prosecutions:
"But for this, all proceedings could get frustrated by clever money launderers settling their cases with the complainants in the original ."
The Court further held that quashing of the
could, at best, operate only
the individual complainant, since the
's investigation
"lies on a broader plane than the inquiry undertaken by the police
the specific grievance of the complainant."
It also noted that the original complainant had alleged coercion in withdrawing his FIR, and that the person who appeared on his behalf before the
was unknown to him.
The ₹1.16 Lakh Argument Fails
Rejecting the contention that was inapplicable due to the modest amount, the Court cited for the proposition that the money laundering offence has a wider reach than the scheduled offence. The definition of "" under encompasses property derived "directly or indirectly" from criminal activity relating to a scheduled offence. The Court also relied on the Division Bench decision in , which recognized the 's power to investigate beyond the confines of the predicate agency's chargesheet.
The Court cited the
Report on Money Laundering through Money Remittance and Currency Exchange Providers, noting that currency exchanges are
"an important link in the money laundering chain"
and that several factors indicating misuse — including use of mules, straw accounts, and sudden inflows followed by outflows — were satisfied in this case.
No Parity with Bhupesh Arora
The Court distinguished the earlier bail order in , where bail was granted because the applicant was not named in the FIR, the FIR itself had been quashed, and primary witnesses did not initially name him.
"Unlike the applicant in Bhupesh Arora, the applicant in the present case is the principal mastermind behind the entire scheme. No parity can, therefore, be claimed with the case of Bhupesh Arora."
The Court also noted that the 's against the Bhupesh Arora bail order is pending before the .
A Case of Evasive Conduct
The judgment catalogued conduct militating against bail: the applicant disobeyed conditions imposed by the granting anticipatory bail; failed to appear pursuant to summons issued under ; concealed the receipt of summons from the while seeking permission to travel abroad; attempted to depart for Paris via Dubai on , and was intercepted at Delhi airport through a ; and his wife sold a property (allegedly purchased with applicant's funds) in , with proceeds withdrawn in cash.
Justice Kaurav observed:
"
, the applicant suppressed vital and material information from the
, which would have had a bearing on the question of grant of permission to travel."
A "Formidable Case" — Bail Rejected
Drawing on , the Court held that statements recorded under are admissible evidence bearing significant weight. Considering the full conspectus of material — including statements from Mr. Sonu and Mr. Lakhmichand, the confession of Chinese national Li Zhongjun linking Vij to the conspiracy, and Sahil Bajaj's disclosure that Navneet Kaushik advised hiding Vij's name — the Court found a "formidable case" against the applicant.
"The requirements of for the grant of bail, thus, have not been satisfied. Resultantly, the present application deserves to be rejected."
The bail application stood rejected, along with all pending applications. The ruling clarifies that compromise-based quashing of predicate offences cannot serve as a shield against prosecutions — a significant deterrent against the misuse of settlements to evade money laundering accountability.
