Court Freezes Accounts of Sanjay Madan, Permits Transfer of Funds Under Section 84 CPC
In a landmark decision, the Delhi High Court has permitted the government of Canada to recover ₹65.9 crore from Indian bank accounts held by Sanjay Madan, a convicted former IT director in Ontario’s Ministry of Education, and his co-defendant Vidhan Madan. The ruling is part of ongoing global efforts to recover proceeds of a massive CAD 47.4 million (approx. ₹290 crore) fraud perpetrated by Madan between 2011 and 2020.
Justice Manmeet Pritam Singh Arora passed the order on June 23, 2025, directing IndusInd Bank and RBL Bank to remit the funds after completing Know Your Customer (KYC) formalities. The order came after Madan’s counsel submitted that he had “no objection” to the remittance and confirmed the availability of sufficient funds in the concerned bank accounts.
“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 ₹65.9 Crores in the bank account of the Crown/Plaintiff in accordance with applicable law/rules,” the Court said.
This transfer has been allowed under Section 84 of the Code of Civil Procedure, 1908, which empowers foreign governments to sue in Indian courts with prior approval from the Government of India.
Massive Fraud Unfolds Across Borders
Sanjay Madan, an Indian-origin technocrat, was convicted in Canada in 2023 for masterminding two major embezzlement schemes. The first involved routing CAD 36.6 million through dummy corporations, while the second saw him siphoning CAD 10.8 million via fraudulent COVID-19 relief claims.
He was sentenced to 10 years in prison, with a plea deal requiring repayment of the entire defrauded amount. Having repaid CAD 30 million upfront, he agreed to repay the remainder over 15 years. Failure to comply could lead to an additional six-year sentence.
Indian Court Steps In
During virtual proceedings before the Delhi High Court, Madan reaffirmed his willingness to cooperate. The Court acknowledged his statement and ordered the banks to assist in completing KYC compliance within two weeks. The accounts may be accessed “only to the limited extent” of remitting the funds and paying legal fees through “valid invoices.”
The Court also issued broader directions:
- All banks involved — including YES Bank, Kotak Mahindra Bank, Axis Bank, PNB, ICICI Bank, IDBI Bank, and others — must file affidavits with full account and transaction details.
- Madan and co-defendant Vidhan Madan are to provide a complete disclosure of their Indian assets.
- Both are restrained from conducting any further transactions from their Indian bank accounts until further orders.
“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.
