The Punjab and Haryana High Court has denied bail to Sanjeev Arora, the former Chairman and Managing Director of M/s Hampton Sky Realty Limited, in connection with an alleged ₹102.5 crore money laundering case involving fictitious iPhone exports. Justice Kuldeep Tiwari, while dismissing the petition, underscored that the investigation revealed a sophisticated, premeditated structure designed to channel funds through shell entities under the guise of legitimate international trade. The court held that the material gathered by the Directorate of Enforcement established a strong prima facie case, making the petitioner ineligible for relief under the strict provisions of the Prevention of Money Laundering Act, 2002.

The case originated from a search and seizure operation conducted by the Directorate of Enforcement in April 2026 under the Foreign Exchange Management Act, 1999. Investigators alleged that M/s Hampton Sky Realty Limited abruptly began exporting mobile phones in 2023 without any prior trading history or specialized infrastructure. According to the investigation, the company declared exports of mobile phones worth approximately ₹102.50 crore to two Dubai-based entities, M/s Fortbel Telecom FZCO and M/s Dragon Global FZCO. However, detailed scrutiny of IMEI data provided by Apple India Pvt. Ltd. and other records suggested that these transactions were largely paper-based. The court noted that several devices declared as exported had been previously activated within India, and some IMEI numbers were recycled across multiple shipping bills, indicating that no genuine movement of goods had occurred.

Justice Tiwari’s ruling emphasized that the domestic supply chain involved in the case consisted of dummy firms lacking genuine business activity. Financial records demonstrated that these entities were interconnected via common identifiers and served merely as pass-through vehicles for routing funds. The court observed, “Something comes out of something, and nothing comes out of nothing.” In its assessment, the court reasoned that because there was no inward supply of genuine mobile phones, the purported exports could not have realistically occurred, thereby exposing the scheme as a method for securing fraudulent input tax credit and duty drawback benefits from the government treasury.

A significant portion of the legal debate centered on the interplay between the Directorate of Enforcement and local police. The petitioner challenged the registration of the predicate FIR, arguing that the Enforcement Directorate had acted with mala fide intent by sharing information during a FEMA search to trigger a money laundering investigation. However, the High Court rejected this contention, affirming that an investigating officer has a mandatory duty to report the discovery of a cognizable offence to the relevant authorities, regardless of whether a specific enabling provision exists in the FEMA statute. Citing the importance of inter-agency cooperation, the court held that investigations by different government bodies “travel on separate channels,” meaning the registration of an FIR based on such information is legally sound.

Regarding the requirements for granting bail, the court reiterated that the twin conditions under Section 45 of the PMLA, 2002, are mandatory and apply to all courts, including constitutional courts. The petitioner had argued that his medical condition—including cardiac and nephrological issues—warranted release under the proviso to Section 45. The court, however, noted that the petitioner’s health status had already been deliberated by the Supreme Court, which had dismissed a previous plea with an assurance that proper medical care would be provided by jail authorities. Based on the current medical reports confirming the petitioner’s stability, the court found no immediate justification for granting bail on health grounds.

The court further expressed concern regarding allegations of witness tampering. According to the prosecution’s records, an operations manager of the petitioner’s company reported that associates of the petitioner had attempted to pressure him into retracting his statements provided to investigators. This, coupled with the systemic nature of the financial irregularities, prompted the court to conclude that there were no reasonable grounds to believe the petitioner would not commit further offenses if released. The judge held that the petitioner’s failure to satisfy the statutory threshold for bail, combined with the evidence of his direct control over the company’s fraudulent activities, necessitated his continued detention.

Ultimately, the High Court’s decision reinforces the stringent regulatory framework surrounding economic offenses. By upholding the validity of the Enforcement Directorate’s actions and strictly applying the Section 45 rigors, the court has signaled a firm stance against trade-based money laundering. The order directs the Special Court to proceed with the trial independently, ensuring that the findings at this stage do not prejudice the final adjudication of the case. As it stands, Sanjeev Arora remains in judicial custody while the trial into the alleged financial irregularities continues to unfold before the Special Court in Gurugram. The legal proceedings will now focus on the substantive evidence provided by the investigative agencies, with the next steps involving the examination of the extensive witness list and the forensic audit reports compiled during the investigation.