Bombay High Court Grants Bail To Accused In ₹6606 Crore Bitcoin Fraud Case, Cites Her Being A Woman, Mother Of Six-Yr-Old

Observing that she is the mother of a six year old, the Bombay High Court last week granted bail to Simpy Bhardwaj, booked under the stringent Prevention of Money Laundering Act (PMLA) by the Enforcement Directorate (ED) in 2023 for her alleged role in India's largest Bitcoin-based Ponzi scheme worth Rs 6,606 crore, related to a Delhi-based firm - Variable Tech Pvt Ltd. 

Single-judge Justice Manish Pitale observed that since the applicant Bharadwaj is a woman, she is entitled to the benefit of the proviso to section 45(1) of the Act. 

"This Court is of the opinion that the applicant, in the present case, being a woman is entitled to the benefit of the proviso to Section 45(1) of the PMLA. This Court finds no reason as to why the applicant is to be denied the benefit of the exception carved out in the proviso for special treatment. In any case, it is not denied that the applicant is a mother to a six year old child, who obviously needs her care and company," the bench said in its October 11 order.

The bench noted that Bharadwaj has suffered incarceration for about 10 months and said that further continuing her judicial custody would serve no purpose when the commencement of the trial in the present case, itself, will not be undertaken in the foreseeable future, thereby indicating that the completion of the trial will not take place within a reasonable period of time.

Therefore, the bench granted her bail on a surety of Rs 50,000.

Background:

The case pertains to the arrest of Bharadwaj, wife of Amit Bharadwaj, the promoter and founder of GainBitcoin.com. It was alleged that Amit along with a few others, launched a ponzi scheme to lure investors, promising assured return of 10 per cent on every bitcoin for a period of 18 months. It was also alleged that the main accused persons collected 80,000 bitcoins valued at Rs.6,606 crores as on November 2017 from several investors and that no returns were ever paid back to the investors, thereby claiming that the offence of money laundering was committed.

The ED had registered an Enforcement Case Information Report (ECIR) in April 2018 against Bharadwaj and others. Though Simpy Bharadwaj was not initially named in the report, she was arrested on December 17, 2023, following allegations of creating a 'ruckus' and obstructing the ED sleuths from conducting a search operation at her residence, due to which her husband and father-in-law escaped from being arrested.

The anti-money laundering agency further claimed that the applicant Bharadwaj was involved in encouraging investors to invest in Bitcoin and had possession of crucial passwords linked to the proceeds of the crime.

Countering the contentions, Bharadwaj contended that she was not named in the initial two FIRs for the 'predicate offences' which led to the ED's ECIR. She pointed out that she was arrested merely on the ground that she obstructed the search operations. She further argued that the ED had no substantial evidence to link her with the crime in question.

Going through the FIR and the ED's case against Bharadwaj, Justice Pitale noted that the 'grounds of arrest' furnished to her on December 17, 2023 were 'drafted in a hurry, without any objective test being applied.

"It can be said that there was lack of credible material to raise a reasonable suspicion against the applicant when she was arrested. A bare perusal of the grounds of arrest shows that a chart is given enumerating the numerous FIRs, including the two FIRs of the year 2019 and one of the year 2022, wherein the applicant was arraigned as an accused. It is stated that the ECIR was recorded after such FIRs were registered. The ECIR was recorded on April 3, 2018 itself, while the three FIRs in which the applicant was arraigned as an accused were registered much thereafter. This material supports the contention raised on behalf of the applicant about the arrest of the applicant violating Section 19 of the PMLA," the court said while granting bail to Bharadwaj.

Appearance:

Advocates Akhilesh Dubey, Sagar Wakale, Vagish Mishra, Amit Dubey, Uttam Dubey, Rajuram Kuleriya, Varad Dubey, Shubham Sharma, Alex D'souza, Emad Khan and Sahil Upadhyay appeared for the Applicant.

Special Counsel Shreeram Shirsat along with Advocates Shekhar Mane and Nikhil Daga the represented the ED.

Additional Public Prosecutor Balraj Kulkarni represented the State.

Case Title: Simpy Bhardwaj vs Union of India (Bail Application 2016 of 2024)

Click Here To Read/Download The Order