Bombay High Court frees Avinash Bhosale's attached properties, finds no proof of 'proceeds of crime'

The Bombay High Court has set aside the continued attachment of properties worth Rs. 25 crore belonging to builder Avinash Bhosale, his wife Gauri Bhosale and their company Samit Realty Pvt. Ltd., holding that the Enforcement Directorate (ED) failed to show any link between the properties and 'proceeds of crime' under the Prevention of Money-Laundering Act, 2002 (PMLA). The ED alleged that of the Rs. 3,983 crore YES Bank disbursed to Dewan Housing Finance Corporation Ltd. (DHFL), Rs. 164.64 crore was routed to entities of Bhosale — Nibodh Realty, a consultancy, and ABIL Dairy — as proceeds of crime. A Division Bench of Justices A. S. Gadkari and Kamal Khata found the payments to Bhosale's entities either predated, or traced to agreements executed well before, YES Bank's April 2018 disbursal to DHFL, so no nexus with any scheduled offence was shown.

The Bench held that 'proceeds of crime' under Section 2(u) of the PMLA requires a property to be derived from a scheduled offence, and that an ordinary banking transaction between a bank and a corporate borrower, in the usual course of business, cannot by itself be treated as proceeds of crime or as money laundering under Section 3 of the PMLA. It allowed Bhosale's appeal against the Appellate Tribunal's order under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976, and dismissed the ED's cross-appeal. As a Bombay High Court ruling, this binds courts in Maharashtra and Goa; it is not a Supreme Court precedent.