A Delhi court has rejected medical bail for former Reliance Capital vice-chairman Amitabh Jhunjhunwala in an alleged ₹11,000 crore-plus money-laundering case, calling him a “principal architect” of the alleged scheme.
Special Judge Vishal Pahuja of Rouse Avenue Courts rejected Jhunjhunwala’s plea after finding that the medical treatment available in custody, including referrals to AIIMS and LNJP Hospital, was adequate for his present conditions.
Jhunjhunwala was arrested by the Enforcement Directorate on April 15 along with former Reliance Capital CFO Amit Bapna.
The investigation concerns alleged diversion of public funds from Reliance Home Finance Limited, or RHFL, and Reliance Commercial Finance Limited, or RCFL, through companies that the ED describes as shell or paper entities.
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Court Says Medical Condition Did Not Justify Release
Jhunjhunwala sought bail primarily on health grounds.
His lawyers told the court that he suffered from heart-related problems, hypertension, orthopaedic issues, degenerative musculoskeletal conditions and a compression fracture causing lower-back pain. They argued that his condition had deteriorated in jail and that he qualified as “sick” or “infirm” under the exception contained in Section 45 of the Prevention of Money Laundering Act.
The ED opposed the plea.
It argued that Jhunjhunwala was receiving regular treatment inside jail and had also been taken to LNJP Hospital and AIIMS for consultations.
The court accepted that argument, according to Hindustan Times.
It said Jhunjhunwala had not demonstrated that his conditions could not be managed within the available prison and referral-hospital system.
The judge also expressed concern that Jhunjhunwala could influence witnesses if released because several company employees remain witnesses in the continuing investigation.
What Is the ₹11,000 Crore Case About?
The ED says RHFL and RCFL raised large amounts of money from banks and financial institutions before lending much of it onward as corporate loans.
According to the agency, more than ₹11,000 crore of those public funds eventually became non-performing assets.
The ED alleges that the money was diverted through numerous shell or dummy companies controlled or managed by entities linked to the Reliance Anil Ambani Group.
Separate reporting has put the alleged “proceeds of crime” identified by the ED at more than ₹11,600 crore.
The agency has alleged that close to 90% of certain corporate loans were disbursed to shell companies despite weak financial capacity and little or no genuine operating business.
Jhunjhunwala served as a director of Reliance Capital from 2003 to 2019 and as vice-chairman between 2006 and 2019.
ED material cited in court describes him as a key decision-maker in areas including raising funds, monitoring cash flows, analysing operating plans and disbursing loans at RHFL and RCFL.
These remain ED allegations and have not been finally established by a court.
What Are Shell Companies and Round-Tripping?
A shell company is generally a legal entity with little meaningful business activity of its own.
Shell companies are not automatically illegal. They can be used for legitimate purposes such as holding assets or structuring investments.
The problem begins when such entities are allegedly used to disguise who controls money or where funds ultimately go.
The ED claims corporate loans were routed through multiple paper companies before reaching other group-linked entities.
Investigators have also alleged round-tripping in parts of the financial trail.
Round-tripping broadly means money is moved through several entities or transactions before returning to a related party, making the movement look like separate commercial activity.
The Indian Express reported that the ED alleged such movement was designed to conceal the true nature of certain transactions.
Why Bail Under PMLA Is Harder
Section 45 of the PMLA contains what are commonly known as the twin conditions for bail.
In broad terms, the court must be satisfied that there are reasonable grounds to believe the accused is not guilty and is unlikely to commit an offence while on bail.
The law contains exceptions for certain categories, including people who are sick or infirm.
Jhunjhunwala relied on that medical exception.
The latest order is significant because the court appears to have held that suffering from multiple medical conditions is not enough by itself. The accused must also show that proper treatment cannot reasonably be provided while in custody.
The broader investigation has meanwhile continued.
In June, the ED filed a prosecution complaint against Jhunjhunwala, Bapna and dozens of other accused in the RHFL-RCFL case.
The agency has also provisionally attached properties worth hundreds of crores in the wider Reliance-linked investigation. In March, it attached 31 properties worth ₹581.65 crore and said cumulative attachments across related Reliance Anil Ambani Group cases had crossed ₹16,000 crore.
Jhunjhunwala and the other accused remain entitled to contest the ED’s allegations during trial.
What this means for you: Large corporate-loan fraud cases rarely involve only whether money was borrowed and repaid. Investigators increasingly trace where loan proceeds moved after disbursal, which companies received them and who ultimately controlled those entities.
The420 Insight: The bail order shows how financial-crime prosecutions under PMLA increasingly turn on both the money trail and control over corporate decision-making. The bigger test now is evidentiary. ED must prove that the allegedly shell-linked loans were not merely bad commercial decisions but part of a deliberate scheme to divert and launder public funds.
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