In a strongly worded judgment questioning the Enforcement Directorate’s reasoning in the YES Bank–DHFL matter, the Bombay High Court on Wednesday set aside the continuing attachment of properties linked to businessman Avinash Bhosale, holding that the transactions under examination were lawful and could not be construed as proceeds of crime.

A Division Bench of Justice A.S. Gadkari and Justice Kamal Khata allowed Criminal Appeal No. 478 of 2026 filed by Bhosale, Samit Realty Pvt. Ltd. and Gauri Avinash Bhosale, and dismissed the ED’s Criminal Appeal No. 816 of 2026.

The judgment, authored by Justice Khata, removes the surviving attachment of ₹25 crore over properties in Pune and Nagpur. The Appellate Tribunal’s April 1, 2026 order had continued the attachment over a Pune land parcel belonging to Samit Realty, valued at ₹14.65 crore, and the requisite portion of a Nagpur property belonging to Gauri Bhosale.

Court Questions ED’s Foundational Premise

The ED’s complaint alleged that proceeds of crime amounting to ₹3,983 crore originated from YES Bank’s investments in, and lending to, DHFL. Against Bhosale and his entities, the agency alleged proceeds of crime of ₹164.64 crore across debenture repayments, consultancy payments and a dairy business transaction.

The Bench questioned the agency’s explanation of how the banking transactions attracted money-laundering provisions.

“We are unable to comprehend, nor has the learned Special Counsel for the ED been able to explain, how official bank transaction(s) between a Bank and a Corporate entity, carried out in the usual course of business, could be construed as proceeds of crime and thereby constitute the offence of money laundering,” it observed.

‘Entirely Baseless’ Conclusion On Repayments

Examining the debenture transactions, the Court noted that Nibodh Realty had invested ₹237.50 crore in Sanjay Chhabria’s company during 2014–15 under three Debenture Subscription Agreements carrying interest at 18 per cent annually.

It rejected the ED’s contention that ₹67.85 crore of subsequent receipts constituted proceeds of crime.

“The conclusion arrived by ED is entirely baseless because, the monies were repaid by Sanjay Chhabria under the DSAs executed in 2014,” the Bench held.

The Court found no established link between those repayments and YES Bank’s disbursements in 2018.

On consultancy payments, it noted that ₹47.52 crore had been disbursed before the relevant YES Bank loan disbursement on April 12, 2018, and could not be connected to its alleged proceeds of crime.

Dairy Sale Was An Independent Transaction

The Bench also rejected the agency’s treatment of ₹25 crore received towards the balance consideration for a dairy business sale.

The agreement dated back to 2016, when half the consideration had already been paid. Payment of the balance in 2019, the Court held, did not establish a connection with the alleged proceeds of crime.

“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,” the judgment stated.

The Bench further found no cogent material even prima facie supporting the ED’s allegation that DHFL’s ₹600 crore loan to DOIT Urban Ventures, allegedly a Rana Kapoor family entity, represented a kickback.

No Basis To Continue Attachment

Describing the investigation’s underlying hypothesis as erroneous, the Court concluded:

“Having concluded that all the transactions were legal transactions and could not be construed as proceeds of crime, we find no basis for continuing the attachment of the properties.”

The operative relief concerns the property attachment and the two appeals; the judgment does not record an acquittal in the criminal prosecution.

Welcoming the ruling in a statement, Bhosale said his faith in the judiciary stood reaffirmed. He thanked Senior Advocate Aabad Ponda, his team, Wadia Ghandy & Co. and those who had supported him.

Ponda appeared with Aditya Mehta, Abinash Pradhan, Garima Agrawal and Yash Dedhia, instructed by Wadia Ghandy & Co. The ED was represented by Special Counsel Prashant Mishra, assisted by Bharat Jadhav, Purva Birla, Shruti Chande, Krish Kariya, Akshun Thakur and Ketan Gavhane. S.V. Gavand appeared for the State.