I-PAC director arrest: Delhi court notes PMLA compliance, flags allegations of hawala transactions; Grants 10-day ED custody

NEW DELHI: A Delhi court has observed that the Enforcement Directorate (ED) complied with statutory requirements under the Prevention of Money Laundering Act (PMLA) while arresting Vinesh Kumar Chandel, director of I-PAC, and recorded that relevant arrest documents and grounds were duly furnished to the accused in accordance with law.

In its order, the court noted that copies of the arrest order, grounds of arrest, and related documents were provided to the accused at the time of arrest, with acknowledgment, and that the material was also forwarded to the Adjudicating Authority. It observed that the requirements under Sections 19(1), 19(2), and 19(3) of the PMLA had been complied with, and that statutory safeguards were followed.

Referring to the material placed on record by the ED, the court noted allegations that the accused was involved in the use of informal channels, including hawala, for movement of funds, and that certain transactions were carried out outside the formal banking system.

The order also records the agency’s claim that statements made during investigation were inconsistent with the material collected, and that transactions with multiple entities lacked an apparent legitimate business purpose.

The court further noted the agency’s allegations that certain electronic records and emails were deleted following search proceedings, which, according to the ED, may have impacted the investigation. It observed that these aspects would require further examination during the course of investigation.

On the question of custody, the court observed that the material on record indicates the need for custodial interrogation to ascertain the role of the accused, trace the proceeds of crime, and identify other persons involved. It also took note of the ED’s submission regarding the possibility of evidence tampering and the need to secure relevant information.

Accordingly, the court allowed the ED’s application and granted 10 days’ custody of the accused till April 23, 2026, with directions that interrogation be conducted in accordance with prescribed safeguards, including CCTV coverage and periodic medical examination.

Senior Advocate Vikas Pahwa, appearing for I-PAC director Vinesh Chandel, strongly opposed the Enforcement Directorate’s (ED) action, arguing that the registration of a fresh ECIR is legally untenable and lacks any substantive basis.

He submitted that even if the allegations are accepted in entirety, they pertain only to receipt of certain payments in cash and cheque, alleged GST irregularities, and loans from entities that are not NBFCs issues that may at best invite scrutiny under taxation or regulatory laws, but do not constitute a scheduled offence under the Prevention of Money Laundering Act (PMLA).

Pahwa further argued that the FIR invoking Sections 420, 120B and 477A of the IPC is unsustainable, as there is no complainant alleging cheating and the essential ingredients of these offences are not made out. He also pointed out that Section 477A IPC is not a scheduled offence under the PMLA, emphasising that the existence of a predicate offence is fundamental for invoking the anti-money laundering law. In its absence, he contended, the ECIR registration and subsequent arrest are without jurisdiction.

The senior counsel told the court that Chandel has been cooperating with the authorities and had complied with earlier summons in coal-related investigations, where prosecution complaints have already been filed. He maintained that Chandel is neither an accused in those cases nor linked to any scheduled offence.

The arrest under Section 19 of the PMLA, he argued, is unwarranted, disproportionate, and fails to meet the statutory requirement of necessity. The arguments on behalf of the accused continued till around 2 am.

Meanwhile, a Delhi court has sent Chandel to 10 days’ ED custody in connection with the case. He was produced late at night, and proceedings continued into the early hours of April 14 before the remand was granted. Chandel was arrested by the ED’s Headquarters Investigation Unit in Delhi on April 13 under the provisions of the PMLA. He is the founder, director and a 33% shareholder of Indian PAC Consulting Pvt. Ltd.

The ED initiated its probe on the basis of an FIR registered by Delhi Police. According to the agency, the investigation has revealed multiple instances of alleged financial irregularities, including receipt of accounted and unaccounted funds, unsecured loans without business credentials, issuance of bogus bills and invoices, routing of funds through third parties, and movement of cash via domestic and international hawala channels.

Officials said the company is suspected to have laundered proceeds of crime amounting to several crores, with around Rs 50 crore detected so far. Searches conducted on April 2 at 11 locations across Hyderabad, Delhi, Mumbai, Bengaluru, Vijayawada and Ranchi led to the seizure of incriminating material.

The case has also triggered a political confrontation between the Trinamool Congress (TMC) and the Bharatiya Janata Party (BJP), and has reached the Supreme Court.

Meanwhile, the Delhi High Court has heard pleas filed by I-PAC directors Rishi Raj Singh and Pratik Jain seeking quashing of ED summons in the matter. The next hearing is scheduled for April 17. (ANI)