Delhi High Court allows Canada to recover ₹66 crore from Indian bank accounts of convict

The Delhi High Court recently permitted the government of Canada to recover ₹65.9 crore from bank accounts in India held by Sanjay Madan and his associates, in connection with a high-profile embezzlement and kickback case being pursued before Canadian courts..The Delhi High Court has effectively frozen the Indian bank accounts of Sanjay Madan and co-defendant Vidhan Madan, barring them from conducting any transactions pending further orders. The freeze, however, comes with two limited exceptions: the remittance of ₹65.9 crore to the government of Canada and the payment of legal fees against valid invoices.Justice Manmeet Pritam Singh Arora issued the order on June 23, 2025, directing IndusInd Bank and RBL Bank to transfer the funds after completing mandatory compliance procedures."After the above said KYC compliance is done, Defendant No. 5 (IndusInd Bank) and Defendant No. 10 (RBL Bank) are further directed to remit an amount to the tune of Rs. 65.9 Crores in the bank account of the Crown/Plaintiff in accordance with applicable law/rules," the order said. .The Canadian government has invoked Section 84 of the Code of Civil Procedure, 1908 (CPC), which allows a foreign government to sue in Indian courts with prior approval from the government of India. The suit is part of ongoing efforts by Canadian authorities to recover funds allegedly diverted to India by Madan as part of a 47.4 million Canadian dollar/ CAD (approx. ₹290 crore) fraud perpetrated over several years..Sanjay Madan, an Indian-origin technocrat and former Director of IT at Ontario’s Ministry of Education, was convicted in Canada for embezzling public funds through two major schemes.Between 2011 and 2020, he orchestrated a consultancy kickback scheme, funneling CAD 36.6 million into dummy corporations controlled by himself and his family. In 2020, he further exploited Ontario’s Support for Families COVID-19 relief program by submitting thousands of fake claims to embezzle CAD 10.8 million, using fabricated identities and multiple bank accounts.In April 2023, he was sentenced to 10 years in prison after pleading guilty to multiple counts of fraud, breach of trust, and money laundering. As part of a plea agreement, Madan agreed to repay the entire defrauded amount, returning CAD 30 million upfront, and committing to pay the remaining over 15 years. Non-compliance could lead to an additional six years of imprisonment..During proceedings before the Delhi High Court, Sanjay Madan, appearing through video conferencing, told the Court that he had no objection to the funds being transferred. His counsel stated that there were sufficient funds lying in Madan's bank accounts maintained at IndusInd Bank and RBL bank (about ₹38 crores and ₹29 crores respectively), and that Madan had no objection to remitting the money lying in these accounts to the Canadian government. Justice Arora accepted this submission and directed IndusInd Bank and RBL Bank to cooperate with Madan in completing KYC formalities within two weeks. The banks must then remit ₹65.9 crore to the account of the government of Canada..Madan was allowed to use the accounts “only to the limited extent” of remitting this amount and making payments for legal fees based on “valid invoices."The Court also directed all involved banks — including YES Bank, Kotak Mahindra Bank, Axis Bank, Punjab National Bank, ICICI Bank, IDBI Bank, and others — to submit affidavits disclosing account information and transaction details within six weeks. Defendants 1 and 2 (Sanjay Madan and Vidhan Madan) must also provide a full disclosure of assets in India.“In view of the statement of Defendant No. 1 and the e-mail response of Defendant No. 2, Defendant Nos. 1 and 2 are restrained from transacting from their Indian Bank accounts until the final disposal of this application,” the Court held..The government of Canada was represented by Senior Advocates Arvind Nayar and Shashank Verma with Advocates Sooraj Sharma, Vipul Agrawal, Jatin Kochhar, Indresh Upadhyay, Arjun Kant, Aditya Vijaykumar, Gaurav Singh, Anuj Dave, and Siddharth Sijoria from Clavius Legal.Advocates Arindam Ghosh, Amrita Grover, and Sharanya Bhatnagar represented Sanjay Madan.Advocate Ateev Kumar Mathur appeared for Kotak Mahindra Bank; Advocate Anand Varma appeared for IDBI.Advocate Siddarth Dutta appeared for Axis Bank.Advocate Nidhi Vardhan appeared for Punjab National Bank.Advocate Nisha Sharma appeared for the Reserve Bank of India..[Read Order]