Mumbai: Bombay HC has held that ED’s Jan 5 arrest of the founder of a private company, The Green Billions Limited (TGBL), in a money laundering case “was illegal”.Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad on Tuesday set aside the Prevention of Money Laundering Act court’s Jan 6 and Jan 9 remand orders and directed that the founder, Prateek Kanakia, “shall be released forthwith” on filing an undertaking in PMLA court, including not to tamper with evidence or influence witnesses, remain within HC jurisdiction and not to leave the country without HC permission. In Sept 2024, CBI-ACB registered an FIR under IPC and Prevention of Corruption Act against six, including Kanakia and unknown others. Indian Renewable Energy Development Agency Limited had sanctioned a Rs 80-crore loan to Broadcast Engineering Consultants India Limited (BECIL), a govt undertaking, for a Pune waste management project. BECIL and TGBL entered into a contract. It was alleged that Rs 50 crore was diverted and utilised by Kanakia for his personal use. Kanakia was arrested in March 2025 by CBI and released on bail that Aug by a CBI court. Kanakia was shown by ED in Oct 2024 as a money launderer. The judges said Section 19 (power of arrest) provides that if the arresting officer forms a reason to believe a person is guilty, he may arrest him after informing him of the grounds of arrest as soon as possible. The investigating officer (IO), in the grounds for arrest, stated there existed sufficient reasons to believe Kanakia’s arrest was necessary to prevent destruction of evidence, trace diverted funds, preventing influencing of witnesses and identify persons involved. HC said ED’s case of fund diversion through bank transactions pertains to documentary evidence, which is in its possession. Even without arresting Kanakia, he could be confronted with statements of others allegedly involved, it said. ED did not allege Kanakia failed to cooperate or attempted to influence witnesses, it said. The CBI court had recorded that nothing was recovered and no money seized from Kanakia to establish the money trail. It was also noted that he did not pose a flight risk or a threat to witnesses. ED did not challenge that order.“In the background of these facts, we have formed an opinion the investigating officer exercised the powers of arrest in an illegal manner,” HC said. There seemed to be “no justifiable reason” for arresting Kanakia, particularly in reference to the IO’s “reasons to believe”, it said. In fact, the IO “attempted to provide false reasons to believe,” it said.
