Disclaimer: This has been reported after the availability of the order of the Court and not on media reports so as to give an accurate report to our readers.
Punjab & Haryana High Court: While considering a petition filed by the petitioner, mentor of Vuenow Marketing Services Ltd. (company concerned), for grant of regular bail in a case registered by the Enforcement Directorate (ED) under the Prevention of Money-Laundering Act, 2002 (PMLA Act), a Single Judge Bench of Sumeet Goel, J., held that the petitioner was not entitled to bail at the given stage, as the material collected during investigation prima facie disclosed his active association with the alleged money laundering scheme involving the Vuenow Group of Companies.
Accordingly, the Court dismissed the petition.
Also read: Punjab & Haryana HC refuses to de—freeze Vuenow Infotech’s bank accounts in Cloud Particle Scam case
Background
In the present case, ED initiated proceedings in relation to the activities of company concerned, Vuenow Infotech Private Ltd., Zebyte Infotech Pvt. Ltd., Zebyte Rental Planet Pvt. Ltd., and other connected entities for the alleged violation under the provisions of the Foreign Exchange Management Act, 1999 (FEMA) read with Section 132, Income-tax Act, 1961 (IT Act).
The ED had initially conducted search and seizure proceedings at various premises connected with the Vuenow Group of companies, during which certain bank accounts of the companies concerned were frozen. The ED had identified certain bank accounts containing more than ₹125 crores, whereas the foreign remittances forming part of the proceedings were stated to be approximately ₹75 crores.
The ED, thus, forwarded information under Section 66 PMLA to the police authorities concerned, pursuant to which an FIR was registered under Sections 318(4), 61(2) and 316(2), Nyaya Sanhita, 2023 (BNS), against the aforesaid companies and their promoters. The alleged scheduled offences were stated to constitute the foundational criminal activity, giving rise to the proceeds of crime and forming the basis for invocation of the PMLA.
Thereafter, the ED recorded the Enforcement Case Information Report (ECIR) and conducted searches at the premises of the said companies, with their bank accounts again being subjected to action under the PMLA. The petitioner was then arrested in February 2025 and had undergone approximately 1 year and 7 months of incarceration.
It was alleged that the companies represented to investors that they would provide cloud-storage facilities and purported “Cloud Particles” in return for attractive rental returns, despite the actual storage capacity allegedly not matching the representations made. It was further alleged that funds received from one set of investors were utilised to make payments to other investors through affiliated entities, forming part of the alleged process of dealing with the proceeds of crime.
Analysis and Decision
The Court observed that while considering a plea for regular bail, the nature and gravity of the allegations, the role attributed to the accused, the material collected during investigation, the possibility of tampering with evidence or influencing witnesses, the period of incarceration and the likelihood of the trial concluding within a reasonable time are relevant considerations. The Court observed that, where the material prima facie attributes a definite and active role to the accused, it must approach bail with greater circumspection; while a meticulous appreciation of evidence is not expected at the bail stage, material of substantial probative significance showing a direct nexus with the alleged criminal conduct cannot be disregarded. The Court observed that the material collected by the ED prima facie indicated the petitioner’s active association with the Vuenow Group of Companies and his participation in seminars and interactions with investors. The Court further noted that the alleged disparity between the cloud-storage capacity represented to investors and the actual operational capacity, coupled with the alleged use of funds received from subsequent investors to make payments to earlier investors, could not be brushed aside at the stage of considering bail.
The Court held that the petitioner’s contention that he was merely a mentor and had received remuneration for his services could not be accepted at this stage, as the nature and source of the funds received by him and their alleged connection with the proceeds of crime required examination during trial.
The Court further observed that the petitioner’s alleged receipt of approximately ₹3.24 crores over 5 years could not be considered in isolation, particularly in view of the nature of the business activities and the material prima facie connecting him with the affairs of the entities concerned. The Court clarified that the fact that the petitioner had not been named in the FIRs relating to the scheduled offences did not, by itself, entitle him to bail, as money laundering constituted a distinct offence under the PMLA.
The Court noted that the prosecution complaint had already been filed and the trial was underway, with 52 prosecution witnesses cited by the ED. However, the material witnesses were yet to be examined, and the evidentiary value of the statements, financial records and other material relied upon by the prosecution could not be conclusively determined at the bail stage. The petitioner had urged that, with 52 witnesses cited and voluminous documents, trial was unlikely to conclude soon, violating his right to speedy trial under Article 21. The Court held that, at this juncture, there was no tangible basis on which it could be satisfied that there were reasonable grounds for believing that the petitioner was not guilty of the offences alleged (the twin condition under Section 45 PMLA). Considering the petitioner’s incarceration, the Court held that the period of custody, by itself, was insufficient to justify the grant of bail, particularly in view of the gravity of the allegations, the alleged deliberate design to defraud investors and the stage of the trial. The Court observed that the custody period had not reached a stage warranting interference merely on the ground of prolonged incarceration.
Accordingly, the Court dismissed the bail petition for the time being, clarifying that its observations would not affect the merits of the case and that the trial Court would proceed in accordance with law without being influenced by them.
[Arif Nisar v. State of Punjab, CRM-M No. 73061 of 2025 (O&M), decided on 18-9-2026]
Advocates who appeared in this case:
For the Petitioner: J.S. Mehndiratta, Senior Advocate and Gursimran Singh Madaan, Ishiqa Sharma, Advocates
For the Respondent: Adhiraj Singh Thind, AAG Punjab, Satya Pal Jain, Additional Solicitor General of India and Karanvir Singh Kathuria, Advocate
