PMLA Tribunal Sets Aside Majority of ED Attachments in Yes Bank–DHFL Case; Upholds ₹25 Crore as Proceeds of Crime

April 1, 2026 : The Appellate Tribunal under the Prevention of Money Laundering Act (PMLA) has partly allowed a batch of appeals filed by Avinash Bhosale and his associated entities, setting aside most of the provisional attachment orders issued by the Enforcement Directorate (ED) in connection with the Yes Bank–Dewan Housing Finance Corporation Limited (DHFL) transaction. The Tribunal, however, sustained the attachment to the limited extent of ₹25 crore, holding that only this portion could be legally established as proceeds of crime.

The case stems from allegations that Yes Bank invested approximately ₹3700 crore in DHFL’s debentures in 2018, following which funds were allegedly diverted through entities linked to Sanjay Chhabria and routed to entities beneficially owned by Avinash Bhosale. Acting on this, the ED provisionally attached multiple properties, treating portions of these transactions as proceeds of crime.

Upon examining the material, the Tribunal undertook a transaction-wise analysis and found that the majority of the ED’s conclusions were unsupported by foundational evidence. In relation to funds amounting to about ₹431 crore received by M/s Nibodh Realty LLP, the Tribunal rejected the ED’s determination that ₹67.85 crore constituted proceeds of crime. It noted that the underlying agreement dated back to 2014–15, nearly four years before the alleged offence in 2018, and held that there was no material to suggest that the parties had any knowledge of a future offence or had structured the transaction with criminal intent. The Tribunal further observed that the investigating agency had exceeded its jurisdiction by questioning a commercial arrangement that was neither part of the FIR nor the ECIR, describing the exercise as legally untenable.

A similar view was taken regarding ₹71.82 crore paid as consultancy fees by DHFL to entities linked to Bhosale. The Tribunal found that the agreements for consultancy services were executed prior to the alleged offence and that a substantial portion of the payments had also been made before the crime period. It held that, in the absence of credible material linking these payments to the alleged offence, they could not be treated as proceeds of crime. The Tribunal also noted that reliance solely on selective statements, while disregarding contrary evidence such as invoices and documented services, was insufficient to sustain attachment.

However, the Tribunal took a different position with respect to a ₹25 crore payment made in 2019 in connection with the Abil Dairy transaction. While the original agreement had been executed in 2016 and an initial payment made at that time, the subsequent payment after a gap of nearly three years was found to be inadequately explained. The Tribunal held that the structure and timing of this payment justified treating it as proceeds of crime and accordingly upheld attachment to that extent, including specific land parcels in Pune and Nagpur.

In its broader reasoning, the Tribunal underscored that the scope of investigation under the PMLA is confined to transactions forming part of the predicate offence or the ECIR. It clarified that pre-offence commercial dealings cannot be retrospectively classified as proceeds of crime merely because of subsequent events, and that the concept of interconnected transactions applies only where such transactions are part of the framework of the offence or its laundering mechanism.

Concluding that most of the attachments lacked legal basis, the Tribunal partly allowed the appeals and set aside the impugned orders except to the limited extent of ₹25 crore, which alone was held to be sustainable as proceeds of crime.

Case Details

Cause Title: Avinash Bhosale & Ors. v. Deputy Director, Directorate of Enforcement
Case No.: FPA-PMLA-5679, 5722, 5723 & 5724/DLI/2023
Coram: Justice Munishwar Nath Bhandari (Chairman) and Shri G.C. Mishra (Member)