MUMBAI: In a partial relief to Pune-based builder Avinash Bhosale in the corruption case linked to Dewan Housing Finance Ltd (DHFL) and Yes Bank, an appellate tribunal in New Delhi under the Prevention of Money Laundering Act (PMLA) has set aside most of the Enforcement Directorate’s (ED) provisional attachment orders worth over ₹139 crore, while upholding attachment of assets worth ₹25 crore.
The tribunal, comprising justice Munishwar Nath Bhandari (Chairman) and member GC Mishra, was hearing a batch of appeals filed by Bhosale, his wife Gauri Bhosale, and associated entities challenging the confirmation of a provisional attachment order issued in August 2022.
Bhosale, founder of Pune-based Avinash Bhosale Infrastructure Limited (ABIL) Group and father-in-law of former Maharashtra minister and Congress leader Vishwajit Kadam, was arrested in May 2022 along with allegations involving Yes Bank founder Rana Kapoor and DHFL’s Kapil Wadhawan in what had been described as one of India’s biggest bank fraud cases.
The case arises from a wider investigation into alleged financial irregularities involving Yes Bank and DHFL. According to the allegations, Yes Bank invested ₹3,700 crore in DHFL debentures in 2018. In return, Wadhawan allegedly paid a kickback of ₹600 crore to Kapoor’s family members through DOIT Urban Ventures (India) Pvt. Ltd., a company allegedly controlled by them.
Investigators further alleged that DHFL diverted funds to developer Sanjay Chhabria of the Radius Group in the name of developing his project, Avenue 54 at Santacruz. Chhabria then allegedly transferred ₹431 crore to Bhosale, his family members, and entities linked to him, including Nibodh Realty LLP.
It was also alleged that portions of these funds were routed through various third-party entities before being transferred to companies associated with Bhosale. Based on this, the ED claimed in August 2022 that approximately ₹164.67 crore held by Bhosale and his entities constituted “proceeds of crime” through layered transactions, and proceeded to attach multiple properties.
The attached assets included a duplex flat in Mumbai valued at ₹102.8 crore, a land parcel in Pune worth ₹14.65 crore, another Pune land parcel worth ₹29.24 crore, a land parcel in Nagpur worth ₹15.52 crore, and another portion of land in Nagpur valued at ₹1.45 crore.
In its April 1 order, the tribunal observed that the agreement between Bhosale and Chhabria had been executed in 2014, nearly four years before the alleged offence of 2018. It noted that there was no material to suggest the parties had prior knowledge of any future crime at the time of entering into the agreements.
“The counsel for the investigating agency could not clarify the power of the IO to examine an agreement to be commercially irrational when no allegation by any of the party was made for it,” the tribunal said.
Holding that the ED had failed to establish any foundational link between the commercial transactions and the alleged proceeds of crime, the tribunal further said that since the 2014 transaction was not the subject matter of the FIR and ECIR, the “IO exceeded his jurisdiction to inter-connect those transactions”.
In conclusion, the tribunal set aside the bulk of the provisional attachments and upheld attachment only to the extent of ₹25 crore relating to a delayed payment under a dairy sale transaction.
It ordered that only specific properties, land in Pune attached for ₹14.65 crore under the title of Samit Realty, and a part of land in Nagpur valued at over ₹15 crore in the name of Gauri Bhosale, would continue to remain under attachment, while the remaining properties were directed to be released.
