Bombay High Court Quashes Former Lodha Developers Executive's PMLA Arrest For Lack Of Fresh Material

On 21 September, the Bombay High Court allowed former Lodha Developers executive Rajendra Narpatmal Lodha's writ petition and set aside the remand order dated 13 February 2026 passed in connection with the Enforcement Case Information Report registered by the ED.

Justice Milind N. Jadhav held that the Enforcement Directorate cannot arrest a person on the basis of material on which it had earlier sought a Special Court's permission to record his statement, unless fresh incriminating material or a supervening circumstance emerges warranting arrest. The Bench held:

“Once such an opinion was formed in writing and an order thereon was passed by the Special Court, Respondent No.1 cannot forego the same and abandon the same within a period of 12 days without complying with the order at the discretion of its Authorised Officer and proceed with arresting the Petitioner by supplying him the grounds of arrest invoking Section 19 on the basis of the very same material, which was the basis for forming the earlier opinion. This is only justified if a supervening exigency so arises in the interregnum such that the Petitioner is required to be arrested due to the same.”

The ED registered the ECIR on 30 September 2025 following two FIRs. Lodha was arrested in the predicate offence in September 2025. The ED subsequently searched his residence, seized documents and froze his bank accounts.

On 29 January 2026, the ED sought permission from the Special Court to record Lodha's statement under Section 50 of the Prevention of Money Laundering Act. The Special Court granted the permission on 30 January.

Instead of recording his statement, the ED moved an application seeking his arrest on 13 February. The Special Court permitted the arrest and Lodha was arrested on the same day.

The Court noted that the ED had itself sought permission to record Lodha's statement and had obtained an order permitting it to do so. It found that the ED subsequently abandoned that course and proceeded to arrest him. It also noted the ED's admission that no new, incriminating or extraneous material had emerged between 29 January and 13 February. It held that the arrest could not be based on the very material which had earlier led the ED to seek permission to interrogate Lodha.

Further, the Bench observed that the ED's application dated 12 February made no reference to its earlier application dated 29 January or the Special Court's order dated 30 January. It found the suppression significant, particularly because the power of arrest is drastic and affects personal liberty. It said:

“The conduct of Respondent No.1 in suppressing the order dated 30.01.2026 is clearly noticed by this Court. The Application dated 12.02.2026 is a detailed Application running into 13 pages, but it conspicuously avoids reference to the previous application dated 29.01.2026 and order dated 30.01.2026 altogether. Such suppression in the facts and circumstances of the present case cannot be countenanced, since the power to arrest is a very drastic power which infringes upon the personal liberty of the arrestee.”

Accordingly, the High Court quashed the remand order and directed Lodha's release on a Rs. 5 lakh personal bond with sureties. Lodha should report to the ED twice a month, cooperate with the investigation and trial, surrender his passport, and obtain the Court's permission before leaving India.

For Petitioners: Aabad Ponda, Senior Advocate a/w. Advait Helekar, Veertej Patil & Ananya Tambe, Advocates i/by Adithya R. Iyer, Shrey Lodha a/w. Dulraj Jain, Aryan Kotwal, Aarti Nishad, Anjali Joshi & Hrutik Chavan, Advocates

For ED: Anil Singh, Additional Solicitor General a/w. C.K. Pendse, Aditya Thakker, Sandeep Karnik, Krishnakant Deshmukh & Adarsh Vyas