The Punjab and Haryana high court on Friday dismissed the bail plea of Punjab minister Sanjeev Arora in a money laundering case linked to an alleged ₹ 100-crore GST fraud.
He is lodged in a Gurugram jail. The 62-year-old businessman-turned-politician, who has been in custody since his arrest on May 9, had approached the high court in July.
The Enforcement Directorate (ED) case registered in May stems from an FIR registered by Gurugram police under the provisions of the Foreign Exchange Management Act (FEMA). Arora held the portfolios of power, industry and commerce. After his arrest, chief minister Bhagwant Mann had allocated his portfolios to other ministers. He was the sole authorised signatory of the company’s bank account and controlled every receipt and disbursement. The funds paid by the accused company to the dummy suppliers through RTGS were immediately layered through second-tier and third-tier shell accounts and routed back to the petitioner and his associates after deduction of nominal commissions, the ED had alleged. The court rejected the petitioner’s contention that no person was cheated and no wrongful gain has been established. Consequently, the same resulted in wrongful gain to the petitioner and wrongful loss to the GST department,” the court observed, adding that the fabricated documents were allegedly created to show the export of mobile phones, whereas, as per the allegations, there was in fact no actual supply of mobile phones.
The ED has alleged that Arora was chairman and managing director of the accused company, M/s HSRL, until August 2025, and held a controlling family equity stake of 37.5% – 38%. In 2023, M/s HSRL, despite having no experience in the mobile-phone business, abruptly began exporting mobile phones, predominantly iPhones, and discontinued such exports in 2024. The accused company generated 43 export shipping bills, declaring total exports of ₹ 102 crore exclusively to two UAE-based companies, according to the ED. The agency alleged that fake purchase invoices were utilised to wrongfully claim and obtain fraudulent input tax credit/GST refunds of ₹ 15 crore and duty drawback of 48 crore from the government treasury, while ₹ 86 crore was received by way of foreign inward remittances into a dedicated bank account. “The IGST refund on exports, to the tune of ₹ 15.63 crores, was allegedly obtained on the basis of a fraudulent misrepresentation that genuine exports had taken place.
It observed that a cumulative reading of the FIR, ECIR and the material collected during investigation prima facie discloses a “well-structured and premeditated modus operandi adopted by the petitioner and his associates for generation, layering and integration of proceeds of crime through a network of interconnected entities”. “The material collected during investigation indicates that M/s HSRL was under the direct control and supervision of the petitioner and was being operated in accordance with his directions,” it added. The court rejected the bail plea, observing that the investigation prima facie establishes the petitioner’s “involvement, from the inception, in the generation of fictitious invoices through his accomplice”, as well as in “a pre-planned illegal mechanism” designed to channel large transaction volumes through M/s HSRL’s accounts without any corresponding genuine transactions.
