Pune Builder Avinash Bhosale Granted Bail in Money Laundering Case by Bombay High Court

Pune, 29th August 2024: The Bombay High Court on Wednesday granted bail to Pune-based builder Avinash Bhosale in a money laundering case, acknowledging that he had established a strong prima facie case in his favor concerning the alleged proceeds of crime and related transactions. Bhosale, who had been in custody since his arrest on June 28, 2022, was released from St George Hospital, where he had been receiving treatment as per court orders. His solicitor, Dhawal Mehta, confirmed the bail, which was granted on a personal bond of ₹1 lakh.

The case, filed by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA), revolves around the disbursal of ₹3,983 crore in loans and investments by Yes Bank Ltd to Dewan Housing Finance Corporation Ltd (DHFL). The ED alleges that ₹600 crore was paid as kickbacks by DHFL to the promoters of Yes Bank, including co-accused Rana Kapoor and his firms. DHFL is also accused of transferring funds to co-accused Sanjay Chhabria and his companies, who allegedly funneled part of these funds, identified as proceeds of crime, into accounts associated with Bhosale and his firms.

Senior counsel Aabad Ponda, representing Bhosale, argued that the transactions in question were legitimate money transactions or loans, with an interest rate of 18% per annum, which is not considered exorbitant in the financial market. He also emphasized that the money had been returned, a point that the High Court found persuasive. The court noted that the investor returns in the real estate sector in 2019 were around 27%, further supporting Bhosale’s stance.

Justice Manish Pitale of the Bombay High Court observed in his order that the investments made in 2014-15 were based on mutually agreed terms, and the money had been returned accordingly. This, the court noted, strongly suggests that it was never anticipated in 2014 or 2015 that these transactions would later be deemed as involving proceeds of crime, as alleged by the ED.

One of the key allegations against Bhosale by the ED involved the sale of ABIL Dairy LLP to Chhabria. The ED highlighted a discrepancy in the dates, noting that the Memorandum of Understanding (MoU) was dated January 15, 2016, but the stamp paper used for the execution was purchased in March 2016. ED counsel H.S. Venegaonkar argued that this inconsistency suggested that the MoU was a fabricated document.

However, the High Court acknowledged the possibility that the discrepancy might be a typographical error, as argued by Bhosale’s defence, and stated that this issue could be addressed during the trial. The court also noted that Chhabria made the first payment of ₹25 crore in 2016, prior to the alleged generation of proceeds of crime, with another ₹25 crore paid on February 28, 2019, after the alleged proceeds had been generated.