Bombay High Court Sets Aside Attachment Of ₹25 Crore Properties Linked To Businessman Avinash Bhosale

The Bombay High Court has set aside the continued attachment of properties worth ₹25 crore belonging to entities associated with businessman Avinash Bhosale, holding that the Enforcement Directorate (ED) failed to establish a link between the properties and alleged proceeds of crime.

A coram of Justices A.S. Gadkari and Kamal Khata was hearing cross-appeals against an April 1, 2026 order of the Appellate Tribunal, New Delhi under the Smugglers and Foreign Exchange Manipulators (Forfeiture of Property) Act, 1976 which continued the provisional attachment of properties worth ₹25 crore.

These included a 6143.71 sq. metre land parcel in Pune owned by Samit Realty Private Limited and a 20,200 sq. metre land parcel in Nagpur owned by Gauri Bhosale.

Avinash Bhosale, Samit Realty and Gauri Bhosale challenged the continued attachment, while the ED filed a separate appeal contesting the release of the attached properties. Bhosale and the other appellants had been named as accused in the third supplementary chargesheet filed in connection with the ED's investigation.

According to the ED's complaint, proceeds of crime amounting to ₹3,983 crore originated from YES Bank through investments in and disbursements to Dewan Housing Finance Corporation Limited (DHFL), including investments in bonds and non-convertible debentures.

The ED alleged that Bhosale and entities associated with him received ₹164.64 crore in proceeds of crime through transactions involving Nibhodh Realty, consultancy agreements and ABIL Dairy.

The Court noted that Nibhodh Realty had invested ₹237.50 crore in Sanjay Chhabria's company under three debenture subscription agreements between October 2014 and July 2015, carrying 18% annual interest. It observed that the ED's own calculations showed a total of ₹794.81 crore, including repayments, principal, interest and processing fees. After deducting the ₹766 crore allegedly repayable, the balance was ₹28.81 crore. The Bench therefore found no basis for the ED's claim that ₹67.85 crore constituted proceeds of crime.

It held that the ED had failed to establish that ₹67.85 crore received by Nibhodh under the 2014 agreements constituted proceeds of crime, noting that the repayments had no established link to the funds disbursed by YES Bank in 2018.

Regarding the consultancy transaction, the Court held that the ED had failed to establish that the ₹71.82 crore allegedly received under consultancy agreements constituted proceeds of crime. It noted that ₹47.52 crore was disbursed before YES Bank extended the loan to DHFL on April 12, 2018, and therefore could not be linked to the alleged proceeds of crime.

With respect to ABIL, the Court held that the ₹25 crore paid by Sanjay Chhabria to ABIL could not be treated as proceeds of crime merely because the balance payment was made in 2019. It noted that the payment arose from a dairy business sale agreement executed in 2016, under which 50% of the amount had already been paid in January 2016.

“In our view, each transaction was an independent transaction with an independent Corporate entity and none of them is, by any stretch of the imagination, illegal. We find there is no nexus between them.” it held

The Court observed that YES Bank's investment of ₹2,700 crore in DHFL debentures and loans of ₹1,283 crore to DHFL in April and June 2018 could not, by themselves, be faulted in law.

“These are official banking transactions and cannot be construed as proceeds of crime.” it held

The Bench held that DHFL's subsequent disbursement of funds to other legal entities could not, by itself, be treated as illegal, as these were also recognised lawful transactions. It observed that the ED's investigation was based on an erroneous premise.

“A loan transaction may be extended with or without appropriate security, and it is entirely for the lender, in its own commercial wisdom, to decide whether to lend monies to an individual or entity. Except bald statements in the pleadings, there is no cogent material on record to even prima facie substantiate the same.” the Court added

Accordingly, the Court dismissed the appeal filed by the ED and allowed Bhosale's appeal.

For Petitioners: Senior Advocate Aabad Ponda, Advocates Aditya Mehta, Abinash Pradhan, Garima Agrawal and Yash Dedhia

For Respondents: Advocates Prashant Mishra (Special Counsel), Bharat Jadhav, Purva Birla, Shruti Chande, Krish Kariya, Akshun Thakur, Ketan Gavjhane and S.V Gavand