Yes Bank-DHFL Case: PMLA Appellate Tribunal Sets Aside Most ED Attachments Against Avinash Bhosale

The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has partly set aside Enforcement Directorate (ED) attachments in a case linked to the Yes Bank–DHFL Rs 3700 crore transaction, sustaining attachment to the extent of ₹25 crore against properties of Avinash Bhosale and his entities.

A bench comprising Chairman Justice Munishwar Nath Bhandari and Member G.C. Mishra held that transactions predating the alleged offence and not forming part of the FIR or ECIR could not be subjected to scrutiny or treated as proceeds of crime.

However, it upheld attachment in respect of Rs 25 crore linked to a 2019 payment under the Abil Dairy deal, holding that the payment could not be justified, particularly in view of the three-year delay and the manner in which the transaction was structured.

“In the light of the discussion made above, we find reason to cause interference in the impugned order for provisional attachment of the properties other than the properties worth of Rs.25 Crores for which we do not find a case to cause interference in the impugned order,” the tribunal said.

The case arises from allegations that funds from Yes Bank's Rs 3700 crore investment in DHFL were diverted through entities linked to Sanjay Chhabria. The ED claimed Rs 431 crore was routed to entities beneficially owned by Avinash Bhosale, identifying ₹67.85 crore as proceeds of crime, along with Rs 71.82 crore paid as consultancy fees and Rs 25 crore from a 2019 dairy transaction.

Properties of Avinash Bhosale and his entities, including land parcels in Pune and Nagpur, were continued under attachment (wholly and partly, respectively) to the extent upheld by the tribunal.

Avinash Bhosale and others argued that the transactions were legitimate commercial dealings, including a 2014 loan agreement and consultancy arrangements, and could not be linked to proceeds of crime, as they predated the alleged offence and were not part of the FIR or ECIR.

Accepting this in part, the tribunal held that such transactions could not be examined in the absence of any allegation in the FIR or ECIR and found that the investigating officer had exceeded jurisdiction in inter-connecting them.

“The IO exceeded to his jurisdiction to inter-connect those transactions and accordingly the counsel for the respondents could not show and refer the ECIR to contend allegation regarding a commercial transaction which took place almost four years prior to the commission of crime to be a subject matter of scrutiny by the respondents. The provision for interconnected transaction would come in reference to the transaction, which was the framework of causing offence or layering the proceeds. It cannot be to any other transaction.,” it observed.

The tribunal ultimately sustained attachment only to the extent of Rs 25 crore over properties of Avinash Bhosale and his entities comprising a Pune land parcel (wholly) and a Nagpur land parcel (partly), while all other attached properties stand released.