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November 2026

Directorate of Enforcement v. Bhupesh Arora (SC): Quashing predicate FIR on compromise does not obliterate proceeds of crime or bar PMLA prosecution.

By Jagdish Punjabi, Chartered Accountant | Ritu Punjabi, Advocate
Reading Time 4 mins

12. 2026 (10) TMI 977 – Supreme Court

Directorate of Enforcement v. Bhupesh Arora

Date of Order: 29.09.2026

Mere quashing of an FIR, by a compromise per se, will not obliterate the existence of the proceeds of crime. The court must be concerned only with the crime that creates proceeds for the subsequent action of money laundering that is punishable under the mandate of the PMLA.

When the investigation has not yet been completed and the nature of allegations do not warrant the grant of bail, the rigour of section 45 of the PMLA has to be pressed into service.

FACTS

This was a common order of the Supreme Court deciding SLP by Directorate of Enforcement (DoE) against an order of the High Court granting bail to Bhupesh Arora and by Rohit Vij against the order of the High Court declining bail.

The case of the DoE was that the High Court committed an error in placing reliance on quashing of a single FIR, that too on a compromise, and erred in holding that the accused Bhupesh Arora cannot be proceeded with in the predicate offence. As regards Rohit Vij, the order of the High Court was supported

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