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The Bombay High Court has ruled that the Enforcement Directorate's arrest of Prateek Kanakia, co-founder of The Green Billions Limited, was illegal and without sufficient justification under the Prevention of Money Laundering Act. The court quashed the remand orders passed by the PMLA court and directed his release with conditions. The case stems from alleged diversion of INR 50 crore from an INR 80-crore loan sanctioned for a Pune waste management project. The court noted lack of evidence linking Kanakia to the diverted funds and absence of non-cooperation.
The Bombay High Court has held that the Enforcement Directorate (ED) had no justifiable reason to arrest Prateek Kanakia, co-founder of The Green Billions Limited (TGBL), in a money-laundering case. The court ruled that the arrest was illegal under the Prevention of Money Laundering Act (PMLA) and set aside the remand orders passed by the special PMLA court. It directed that Kanakia be released upon filing an undertaking that he would cooperate with the investigation, not tamper with evidence, not influence witnesses, and not leave the country without prior permission. Advertisement
The case originates from a CBI-Anti-Corruption Branch FIR registered in 2024 concerning an INR 80-crore loan sanctioned by Indian Renewable Energy Development Agency Limited to Broadcast Engineering Consultants India Limited (BECIL) for a waste management project in Pune. Investigators alleged that INR 50 crore out of this loan amount was diverted and misused for personal purposes instead of being utilised for the project.
Kanakia was arrested by the CBI in March 2025 in connection with the predicate offence and was later granted bail by a special CBI court. The ED subsequently initiated proceedings under the PMLA based on the same FIR and arrested him again, alleging involvement in laundering the diverted funds.
During the hearing, the ED contended that it had recorded statements and that it had the power to arrest under Section 19 of the PMLA if there was reason to believe that a person was guilty of an offence. However, the High Court observed that the alleged diversion was based largely on documentary material already in the possession of the agency. The court noted that custodial interrogation was not necessary when the evidence was primarily document-based and when the accused had cooperated with the investigation.
The bench further pointed out that there was no allegation that Kanakia had failed to appear before investigators or that he attempted to influence witnesses. It also took note of the earlier CBI court's observation that no assets were recovered and no money trail was established directly linking Kanakia to the alleged diversion of INR 50 crore.
The High Court stated in its order that the reasons cited by the investigating officer did not justify arrest and appeared unsustainable in law. It concluded that the arrest lacked proper legal foundation and therefore could not be upheld.
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