Mumbai: In a relief for builder Avinash Bhosale, the Bombay High Court found no illegality in Rs 25 crore received by his company ABIL from Sanjay Chhabria in Feb 2019 and held that the amount does not constitute proceeds of crime as alleged by Enforcement Directorate (ED).
The HC set aside the provisional attachment of Rs 25 crore over two properties by Appellate Tribunal under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 (SAFEMA). The attachment pertains to a 6,143 sq mtr Pune plot in Samit Realty’s name worth Rs 15 crore and a 20,000 sq mtr Nagpur plot worth Rs 15 crore in Gauri Bhosale’s name. The ED also filed an appeal saying the properties cannot be released.
ED alleged that Rs 25 crore was received by ABIL from Chhabria in 2019 and it constitutes proceeds of crime. Because the balance amount was paid three years later, the HC said that it is inconceivable that a payment made under an agreement for sale of a dairy business, executed in 2016 along with the first payment, can be linked to proceeds of crime. HC said, “We find there is no nexus between them.’’ You Can Also Check: Gold Rate in Mumbai | Silver Rate in Mumbai | Bank Holidays in Mumbai | Public Holidays in Mumbai | Mumbai AQI | Weather in Mumbai | Petrol Price in Mumbai | Diesel Price in Mumbai | CNG Price in Mumbai | LPG Price in Mumbai Stay updated with the latest Mumbai news.
The HC, after hearing Bhosale’s senior counsel Aabad Ponda and ED special counsel Prashant Mishra, said it was “unable to comprehend”, nor has ED explained “how official bank transaction(s) between a bank and a corporate entity, carried out in the usual course of business, could be construed as proceeds of crime and thereby constitute the offence of money laundering.’’ The HC said money received by DHFL, whether as an investment or as a loan from YES Bank, “cannot be faulted in law”. “These are official banking transactions and cannot be construed as proceeds of crime,’’ said the HC and said, consequently, neither can the subsequent transaction made by DHFL of these funds. The HC viewed each transaction as an independent transaction with an independent corporate entity, and “none of them is, by any stretch of the imagination, illegal,’’ it said.
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ED’s case was that proceeds of crime amounting to Rs 3,983 crore originated from YES Bank through investments and disbursements to Dewan Housing Finance Corporation Limited (DHFL), including investments in bonds and non-convertible debentures. ED has alleged proceeds of crime to the tune of Rs 164.64 crore received by Bhosale and his entities: Nibhodh Realty, Consultancy and ABIL Dairy (ABIL). A division bench of Justices AS Gadkari and Kamal Khata allowed Bhosale’s appeal and dismissed ED’s plea for appeal.