Authority: High Court of Judicature at Bombay, Bench of Hon’ble Justices A. S. Gadkari and Kamal Khata, JJ.

Order Date: Pronounced on 21 October 2026 (reserved on 13 October 2026).

Case Overview

  • Parties: Appellants – Avinash Bhosale (66), Samit Realty Pvt. Ltd., Gauri Avinash Bhosale (65) and Abbeys Relacon LLP; Respondents – Directorate of Enforcement (ED) and State of Maharashtra.
  • Nature of Proceedings: Cross‑appeals arising from an order dated 1 April 2026 of the Appellate Tribunal, New Delhi under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA).
  • Background: The Tribunal had continued provisional attachment of properties worth Rs 25 crore – land in Pune (6,143.71 sq m valued at Rs 14.65 crore in the name of Samit Realty) and land in Nagpur (20,200 sq m valued at Rs 15.5287 crore in the name of Gauri Bhosale).
  • ED Allegations: The ED alleged that proceeds of crime amounting to Rs 3,983 crore originated from YES Bank and were funneled through DHFL via (a) Sub‑Debt/Private Placement of Bonds – Rs 1,000 crore, (b) Masala Bonds – Rs 283 crore, (c) Public Issue of NCDs – Rs 2,700 crore. Specific claims included:
  • Rs 164.64 crore alleged proceeds received by Avinash Bhosale/ his entities (Nibodh Realty, Consultancy, ABIL Dairy).
  • Rs 71.82 crore alleged proceeds from DHFL consultancy agreements.
  • Rs 25 crore alleged proceeds received by ABIL Dairy LLP from Sanjay Chhabria.
  • Court’s Examination of Transactions:

1. Nibodh Realty Debenture Subscriptions: Between 15 Oct 2014 and 23 Jul 2015, Rs 237.50 crore were invested in Sanjay Chhabria’s company under three Debenture Subscription Agreements (DSA) at 18 % p.a. Repayment calculations differed between counsel, but the Court noted that total repayments (principal + interest + fees) amounted to Rs 794.81 crore, leaving a balance of Rs 28.81 crore after deducting the alleged Rs 766 crore liability. Hence, no basis for Rs 67.85 crore being proceeds of crime.

2. Consultancy Agreements with DHFL: DHFL disbursed Rs 47.52 crore prior to YES Bank’s loan to DHFL on 12 Apr 2018. Since the disbursement preceded the alleged illicit loan, it cannot be linked to proceeds of crime. Further, Rs 55.62 crore were paid between 4 Jul 2017 and 11 May 2018, and an invoice of Rs 16.20 crore dated 6 Apr 2018 (six days before the loan) reinforces the lack of nexus.

3. ABIL Dairy Transaction: Rs 25 crore received from Sanjay Chhabria on 18 Feb 2019 related to a dairy business sale initiated in 2016 with 50 % payment on 15 Jan 2016 and the remaining 50 % on 28 Feb 2019. The Court found no illegal connection to the 12 Apr 2018 loan.

4. YES Bank – DHFL Transactions: In Apr‑Jun 2018, YES Bank invested Rs 2,700 crore in DHFL debentures and granted a loan of Rs 1,283 crore to DHFL. These are standard banking transactions and cannot be deemed proceeds of crime.

5. DHFL to DOIT Urban Ventures: Alleged Rs 600 crore kickback to Rana Kapoor’s family entity was deemed unfounded; a loan cannot be characterized as a kickback without substantive evidence.

  • Legal Reasoning: The Court emphasized that for property to be deemed “proceeds of crime” under PMLA, it must be derived from a “scheduled offence”. The Court found no evidence that the bank‑corporate transactions were linked to any scheduled offence. Consequently, the attachment lacked legal foundation.

Final Outcome

  • The Court allowed Criminal Appeal No 478 of 2026 in accordance with prayer clause (a), thereby setting aside the attachment.
  • Criminal Appeal No 816 of 2026 filed by the ED was dismissed.
  • The provisional attachment of the Pune and Nagpur land parcels (totaling Rs 25 crore) was terminated.

Topics: Legal Judgment, Money Laundering, Property Attachment