The Delhi High Court has granted regular bail to Punit Narendra Garg, a former Reliance Communications (RCOM) executive, in the Enforcement Directorate’s money laundering case over alleged diversion of bank loans. It held that the ED had not sufficiently shown how a yacht bought in 2008 and a Manhattan apartment bought in 2010 were “proceeds of crime” from loan frauds alleged for 2013 to 2017.
For bail under Section 45 of the PMLA, the court must be satisfied on broad probabilities that the accused is not guilty and not likely to reoffend, without a trial or a finding of innocence. Assets acquired before the alleged scheduled offences cannot be treated as “proceeds of crime” merely because later loans were used to repay the earlier borrowings that funded them. The prosecution must show how they were derived from the criminal activity, though a person may still be prosecuted under Section 3 without being in the predicate FIR. A person who deals with such assets commits laundering only if the assets are proceeds of crime, and an expanding prosecution with little prospect of an early trial is an additional ground for bail under Article 21.
The ED’s case, based on CBI FIRs on complaints by SBI, Bank of Baroda and PNB against RCOM and Anil Ambani, alleges a loss of Rs 2,929.05 crore to SBI. Garg, arrested on 29 January 2026, is accused over three transactions worth about Rs 149.77 crore: the sale of the yacht “Tian” in 2021, the sale of the apartment in 2023, and payments of about USD 77,046 towards his daughters’ education from overseas group accounts. The ED said that the later loans were used to repay earlier foreign borrowings which funded the assets. Justice Sanjeev Narula held that the “twin conditions” of Section 45 of the PMLA were satisfied. He said that the assets must be property derived from criminal activity relating to a scheduled offence under Section 2(1)(u), and that the refinancing trail, by itself, does not make assets acquired years before the alleged offences “proceeds of crime”. He relied on Pavana Dibbur, and said the question remains a substantial disputed one. His communications show his participation in later dealings, but that would be money laundering only if the assets are proceeds of crime. He did not rely on his custodial statements, which are inadmissible under Prem Prakash, as the Special Judge had also not needed them. After a supplementary complaint in August 2026, the record has grown to about 77,384 pages and 56 witnesses, so there is little prospect of an early trial. He had been in custody for over eight months, and under V. Senthil Balaji, Section 45 cannot justify indefinite pre-trial detention. He was granted bail on a Rs 1 lakh bond with two sureties, with conditions including surrender of his passport, no contact with witnesses, and no instructions about the assets or sale proceeds. The court said that the ED can seek cancellation of bail if the conditions are breached, and that the findings are only for the bail.
Citation: Punit Narendra Garg v. Directorate of Enforcement, Bail Appln. 2495/2026 (with Crl.M.A. 27250-27251/2026), Delhi High Court (Justice Sanjeev Narula), decided on 15.10.2026 (reserved on 12.10.2026) | 2026:DHC:9285
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