The Punjab and Haryana High Court has denied bail to Sanjeev Arora in a ₹102.50 crore alleged iPhone export fraud case.
The court held that the Enforcement Directorate (ED) can inform local police about a cognizable offence discovered during a search under the Foreign Exchange Management Act (FEMA), even without a specific provision authorising such communication.
Justice Kuldeep Tiwari made the observations while dismissing the regular bail application of Arora, former chairman and managing director of Hampton Sky Realty Limited (HSRL), who was arrested on May 9, 2026.
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What Was the Alleged Fraud?
The investigation concerns alleged fictitious exports of iPhones worth ₹102.50 crore to two entities in the United Arab Emirates. The ED searched HSRL’s premises on April 17, 2026. Following a complaint by an ED Assistant Director, Gurugram Police registered an FIR on April 18 for alleged cheating, forgery and conspiracy.
The ED subsequently registered an Enforcement Case Information Report on May 5, treating the police FIR as the predicate offence for its money laundering investigation.
Why Did the Court Uphold the FIR?
Arora’s counsel argued that FEMA lacked a provision equivalent to Section 66 of the Prevention of Money Laundering Act (PMLA), making the ED’s communication to police legally questionable.
The court rejected this argument, holding that reporting a cognizable offence does not require specific statutory authorisation. It also declined to conclude that the FIR had been registered solely to establish a money laundering case, finding insufficient grounds at this stage to establish improper motives.
What Evidence Raised Suspicions?
The court examined Apple IMEI records showing that 123 identical IMEI numbers appeared across two export consignments. Of these, 58 handsets had reportedly been activated in India before their declared export, while 97 were activated by Indian consumers afterwards.
Records from Apple, Amazon and HSRL also traced 1,249 handsets to 862 retail buyers across 11 states and Union Territories without any connection to HSRL. The court further noted that HSRL employees acknowledged that no mobile phones had physically arrived at the company’s office.
It found prima facie grounds suggesting a fraudulent export arrangement involving an alleged ₹15.63 crore IGST refund.
Why Was Bail Refused?
The court held that the material prima facie indicated trade-based money laundering and that Arora had failed to satisfy the twin bail conditions under Section 45 of the PMLA. It also rejected bail on medical grounds, noting his stable condition and an earlier Supreme Court order addressing his medical care.
The court consequently dismissed the petition, leaving the criminal proceedings to continue.
The case highlights how inconsistencies between export declarations, device identification records, supplier transactions and actual inventory can become significant evidence in financial investigations. The ruling also clarifies that information discovered during a FEMA search may support police action when it discloses a cognizable offence.
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