Authority: High Court of Judicature at Bombay, Criminal Appellate Jurisdiction (Bench: A.S. Gadkari & Kamal Khata, JJ.)

Order Date: 21 October 2026 (Reserved on 13 October 2026)

Case Overview

  • The matter comprises two cross‑appeals: Criminal Appeal No. 478/2026 filed by Avinash Bhosale, Samit Realty Pvt. Ltd., Gauri Avinash Bhosale, Abbeys Relacon LLP and the State of Maharashtra; and Criminal Appeal No. 816/2026 filed by the Directorate of Enforcement (ED).
  • Both appeals arise 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), which continued a provisional attachment of properties worth Rs 25 crore.
  • The attached properties were:

1. Land parcel of 6,143.71 sq m in Pune, valued at Rs 14.65 crore, held in the name of Samit Realty.

2. Land parcel of 20,200 sq m in Nagpur, valued at Rs 15,52,87,000 (≈Rs 15.53 crore), held in the name of Gauri Bhosale.

  • The ED’s original complaint (filed 21 Oct 2022) alleged proceeds of crime of Rs 3,983 crore originating from YES Bank, which were allegedly channeled to DHFL through:

a) Sub‑Debt/Private Placement of Bonds – Rs 1,000 crore;

b) Masala Bonds – Rs 283 crore;

c) Public Issue of Non‑Convertible Debentures – Rs 2,700 crore.

  • The ED further alleged that Rs 164.64 crore of proceeds of crime were received by Avinash Bhosale and his entities (Nibodh Realty, a consultancy, and ABIL Dairy) through various transactions.
  • Detailed transaction analysis presented:
  • Nibodh Realty: Between 15 Oct 2014 and 23 Jul 2015, invested Rs 237.50 crore in Sanjay Chhabria’s company under three Debenture Subscription Agreements (DSAs) at 18 % p.a. interest. According to the appellants, Sanjay repaid Rs 499.63 crore (Rs 163.93 crore before 12 Apr 2018 and Rs 335.70 crore after). The ED’s calculation suggested a repayment obligation of Rs 766 crore, of which Rs 431 crore was repaid and Rs 267 crore transferred in 2018. The court noted that the net balance after deducting the alleged Rs 766 crore is Rs 28.81 crore, leaving no basis for the ED’s claim of Rs 67.85 crore as proceeds of crime.
  • Consultancy Transactions: The ED claimed Rs 71.82 crore as proceeds of crime from DHFL consultancy fees. The court observed that Rs 47.52 crore was disbursed by DHFL before the YES Bank loan disbursement on 12 Apr 2018, and an additional Rs 55.62 crore was paid between 4 Jul 2017 and 11 May 2018, with an invoice of Rs 16.20 crore dated 6 Apr 2018 – all preceding the loan date, thus not linked to any alleged crime.
  • ABIL Dairy LLP: The ED alleged Rs 25 crore received on 18 Feb 2019 from Sanjay Chhabria as proceeds of crime. The court held that this payment related to a dairy business sale executed in 2016, with 50 % paid on 15 Jan 2016 and the remaining 50 % on 28 Feb 2019, constituting an independent commercial transaction.
  • 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. The court found these to be standard banking transactions, not illicit.
  • DHFL Loan to DOIT Urban Ventures: The ED alleged a Rs 600 crore kickback to the family of Rana Kapoor. The court found no material evidence to substantiate this claim.
  • The court examined statutory definitions of “proceeds of crime” (Sec 2(u) PMLA) and “scheduled offence” (Sec 2(1)(y) PMLA) and concluded that none of the examined transactions satisfied the criteria for proceeds of crime.

Final Outcome

  • Criminal Appeal No. 478/2026 is allowed in terms of prayer clause (a); the provisional attachment of the two properties is set aside.
  • Criminal Appeal No. 816/2026 filed by the Directorate of Enforcement is dismissed.
  • The attached lands in Pune and Nagpur are to be released to the appellants.

Topics: Attachment, Money Laundering, Proceeds of Crime