J&K High Court Denies Anticipatory Bail To Man Accused Of Masterminding Large-Scale International Cryptocurrency Scam

While dismissing his plea for pre-arrest bail, Justice Mohammad Yousuf Wani observed,

“The petitioner is alleged to be involved in heinous offences of economic nature by being connected with the proceeds of crime. He is alleged to have cheated thousands of people by luring them to part with their hard-earned money under the false hope and expectation of high percentage of profit/commission, by dragging them to the bogus “crypto currency/Emollient Coin” Ponzi Scheme”.

The bail plea stemmed from the Enforcement Case Information Report registered by the Enforcement Directorate (ED) under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 (PMLA). The genesis of the case lay in an FIR registered at Police Station Leh under Section 420 IPC triggered by a complaint from the Additional District Magistrate, Leh, alleging large-scale public cheating through a crypto coin business run by A.R. Mir and Ajay Kumar Choudhary.

The petitioner, a retired Army personnel, claimed he had invested in the crypto venture innocently and had no ownership or direct control over the companies involved. He argued that he had been falsely implicated based solely on statements of co-accused and had not been summoned until a raid was conducted on his residence in Dehradun in January 2025. Citing parity with co-accused who were granted bail, and offering full cooperation, he sought protection against arrest under Section 482 of the newly enacted Bhartiya Nagarik Suraksha Sanhita (BNSS), 2023.

The Enforcement Directorate vehemently opposed the bail plea, branding Gulia as the “actual mastermind” of the fraud, who had orchestrated the entire Ponzi scheme under the banner of “The Emollient Coin Ltd” and later “Tech Coin Ltd.”

According to the ED,

“The petitioner dishonestly lured hundreds of innocent people not only from India but also from South Asian countries to purchase fake crypto Emollient Coins by offering unrealistic returns of up to 40% with additional commissions.”

The ED alleged that Gulia and his associates ran the scheme through fake mobile applications and seminars held across India, Vietnam, Cambodia, and the Philippines. Following detailed searches in 2024, at various locations in Jammu, Leh, and Haryana, incriminating documents were seized. A sum of ₹91 lakh in cash was recovered, with further evidence suggesting that Gulia was in possession of proceeds of crime worth ₹6.05 crore, including ₹57 lakh received in his nominated accounts from co-accused, they pointed

Despite multiple summons under Section 50 of PMLA, the petitioner failed to join the investigation, the counsel for ED argued.

Court's Observations:

In his detailed order, Justice Wani noted the gravity of allegations and drew upon guiding precedents laid down by the Supreme Court in Siddharam Satlingappa Mhetre v. State of Maharashtra and Sushila Aggarwal v. State(NCT of Delhi), among others.

Referring to the constitutional importance of personal liberty under Article 21, the Court acknowledged that anticipatory bail is a safeguard against arbitrary arrest. However, it clarified that such relief must be granted with caution, particularly in economic offences affecting public confidence.

“The petitioner is alleged to have cheated thousands of people by luring them to part with their hard-earned money under false hopes of high returns through a bogus crypto-currency Ponzi scheme.”, the court remarked.

On the issue of jurisdiction, the Court also noted that the petitioner had failed to establish a credible territorial nexus justifying the filing of bail application before the Jammu Bench.

The Court observed that, “The presence of the accused in custody before the Investigating Agency appears to be imperative for a logical and result-oriented investigation in the case.”

It also underscored that, “Anticipatory bail is aimed at protecting those who genuinely apprehend arrest on false and frivolous grounds. This case does not inspire that confidence.”

Considering the application of twin conditions under Section 45 of PMLA, the court held that the statutory bar on bail applied with equal force even at the anticipatory stage. It stated,

“There appears to be no merit in the application which is dismissed.” With this, the court refused to grant any protection from arrest to Gulia.

Case Title: Naresh Kumar Gulia Vs Directorate of Enforcement

Citation: 2025 LiveLaw (JKL)

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