Supreme Court Refuses To Interfere With Arrest Of Ex-VVCMC Town Planning Officer In Money Laundering Case

The Supreme Court on Tuesday (May 26) refused to interfere with a Bombay High Court judgment that upheld the arrest of former Vasai-Virar City Municipal Corporation (VVCMC) Deputy Director of Town Planning Y. Shiva Reddy by the Enforcement Directorate.

The case concerns alleged illegal constructions and corruption linked to development permissions in the Vasai-Virar area.

A Bench of Justices Vikram Nath and Sandeep Mehta dismissed Reddy's special leave petition against the High Court's March 9, 2026 judgment.

However, the Court clarified that it would be open to the petitioner to apply for regular bail. Any such application shall be considered on its own merits and without being influenced by the observations in the High Court judgment.

“We are not inclined to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition is, accordingly, dismissed. However, it would be open for the petitioner to apply for regular bail, which would be considered on its own merits without being influenced by the observations made in the impugned order,” the Court noted.

The case arose from allegations relating to the illegal construction of 41 buildings in the Vasai-Virar area using forged permissions and fabricated documents. The buildings were allegedly constructed on land reserved for a sewage treatment plant and a dumping ground.

The structures were demolished on February 20, 2025.

The ED registered an Enforcement Case Information Report (ECIR) on February 21, 2025, a day after the demolition of the structures, and began investigating the alleged laundering of proceeds linked to the illegal constructions.

Searches carried out at Reddy's residences in Mumbai and Hyderabad led to the recovery of unaccounted cash worth ₹8.23 crore. The agency also seized diamond-studded jewellery valued at ₹23.28 crore.

The material collected during the probe was later shared with the state authorities, leading to the registration of a corruption case against Reddy under the Prevention of Corruption Act on August 1, 2025. Less than two weeks later, on August 13, 2025, the ED arrested him.

While rejecting Reddy's challenge to the legality of his arrest, the Bombay High Court held that the ED had complied with the safeguards prescribed under Section 19 of the Prevention of Money Laundering Act (PMLA).

The High Court noted that the agency had relied on a range of material, including witness statements, data recovered from digital devices, WhatsApp chats, unaccounted cash, and jewellery. Taken together, the court said, the material was sufficient to form a prima facie view that Reddy was involved in money laundering

The High Court also held that the petition appeared to be an attempt to bypass the statutory bail requirements under Section 45 of the PMLA.