News Desk: The Bombay High Court has set aside an appellate tribunal's order continuing the Enforcement Directorate's (ED) attachment of properties worth around ₹25 crore linked to Pune businessman Avinash Bhosale and others in the Yes Bank-Dewan Housing Finance Limited (DHFL) money-laundering case.
In its ruling on Wednesday, the court said there was no sufficient basis to continue attaching the properties, observing that the transactions cited in the case were lawful banking and commercial dealings and could not automatically be treated as proceeds of crime.
The properties involved include a land parcel in Pune, valued at approximately ₹14.65 crore and held in the name of Samit Realty Private Limited, and a plot in Nagpur valued at ₹15.52 lakh registered in the name of Bhosale's wife, Gauri. Bhosale, his wife and the company had challenged the tribunal's April 1 order, while the ED opposed their plea.
Bhosale was named as an accused in the ED's third supplementary chargesheet in the case, which originated in 2020. In its October 2022 chargesheet, the agency alleged that proceeds of crime worth ₹3,983 crore originated from transactions involving Yes Bank and DHFL between April and June 2018.
According to the ED, Yes Bank sanctioned and disbursed funds to DHFL through investments, including purchases of debentures, and loans. The agency further alleged that ₹164.64 crore reached Bhosale or entities associated with him, including Nibhodh Realty, through transactions involving consultancy services and ABIL Dairy. The latter entity allegedly received ₹25 crore.
However, the High Court said the transactions involved independent corporate entities and found no established connection between them that justified continuing the property attachment.
The court also observed that funds received by DHFL from Yes Bank, whether through investments or loans, were part of official banking transactions and could not be treated as proceeds of crime merely because of subsequent transfers to other entities.
Addressing another allegation raised by the ED, the court questioned the claim that a ₹600 crore loan extended by DHFL to DOIT Urban Ventures in July 2018 amounted to a kickback to an entity allegedly linked to the family of Yes Bank founder Rana Kapoor.
The court said a loan transaction could not, by itself, be characterised as a kickback. It also noted that lenders could decide whether to extend loans, with or without appropriate security, based on their commercial judgment.
The ruling represents a setback for the ED's attempt to maintain the attachment of the two properties. The court set aside the appellate tribunal's order, concluding that the transactions relied upon to justify the attachment could not be treated as illegal on the grounds presented.
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