The Delhi High Court has decided not to dismiss a lawsuit initiated by the Government of Canada aiming to recover over CAD 33.3 million. These funds were allegedly siphoned from the Government of Ontario and transferred into bank accounts in India. The case, titled Government of Canada v. Sanjay Madan, was presided over by Justice Vikas Mahajan, who affirmed that the Delhi High Court has territorial jurisdiction over the matter since the disputed funds were allegedly deposited in bank accounts located in Delhi.
Justice Mahajan dismissed the argument that Canada would be a more appropriate venue for resolving the dispute, thereby allowing the case to proceed in India. The lawsuit stems from fraudulent activities involving Sanjay Madan, a former employee of the Ontario government. According to the Canadian Broadcasting Corporation, Madan held a senior IT position and played a role in developing a computer application related to a COVID-19 relief program before being dismissed in 2020.
In April 2023, Madan pleaded guilty to fraud-related charges in the Ontario Superior Court of Justice, admitting to receiving secret commissions between 2011 and 2020. One scam involved Ontario’s Support for Families Program, which was designed to aid at-home learning during the pandemic. Canada claims that over 78,000 fraudulent applications were submitted, with more than 44,000 processed, leading to disbursements exceeding CAD 10.8 million.
The second scheme involved IT consultancy contracts, where Madan allegedly received kickbacks from vendors. Canada’s lawsuit claims that around CAD 40.2 million was moved from Canadian banks to Indian accounts, with at least CAD 33.34 million still unrecovered.
Madan sought to have the lawsuit dismissed or returned, arguing it was time-barred and that the Delhi court lacked jurisdiction. However, the court rejected these claims, emphasizing that the accounts in question were located in Delhi. It further noted that Canada is requesting account renditions from Indian banks and the repatriation of the funds.
Justice Mahajan also addressed the issue of limitation, stating that the suit cannot be rejected at this juncture based on this ground. The judgment pointed out that even if Canada were to secure a ruling there first, it would still need to initiate proceedings in India to recover the funds, as Canada is not a “reciprocating territory” under Section 44A of the Code of Civil Procedure (CPC). Thus, a Canadian decree would not be enforceable in India.
The court deemed it inefficient to require Canada to obtain a Canadian decree before filing a suit in Delhi, labeling such a process as a waste of time and effort. The court also dismissed Madan’s reliance on the doctrine of forum non conveniens, asserting that the doctrine cannot be applied to avoid a civil suit governed by the CPC simply because another foreign forum might be more convenient.
Lastly, the court rejected the argument that the Indian proceedings constituted re-litigation, as legal proceedings were already ongoing in Canada. The court referred to the Explanation to Section 10 CPC, which states that the existence of a foreign lawsuit does not prevent an Indian court from hearing a case based on the same issue. Consequently, Madan’s application to dismiss or return the plaint was denied.
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The Government of Canada was represented by Senior Advocates Nakul Dewan and Shashank Verma, along with Advocates Aaditya Vijay Kumar, Sooraj Sharma, Vipul Agrawal, Arjun Kant, Jatin Kochhar, Akshita Katoch, Upamanyu Ganguly, Gunjan Joshi, Himashi Singh, and Pratishtha Chauhan. Madan was represented by Senior Advocate Ramesh Singh and advocates Upinder Singh, Sharanya Bhatnagar, Sommya Rohatgi, and Hage Nanya.
