Bombay HC Quashes PMLA Complaint Against Advocate Linked to Anil Deshmukh Case, Citing Lack of Prima Facie Evidence [Read Judgment]

Mumbai: The Bombay High Court, on February 23, 2026, quashed a money laundering complaint filed by the Enforcement Directorate against Kishore Dewani, a Nagpur-based Chartered Accountant and advocate named as Accused No. 11 in the PMLA case arising from the Anil Deshmukh corruption scandal. Justice Ashwin D. Bhobe held that the offence under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002, was not made out against the applicant, and that the Designated Court had issued process against him without any application of judicial mind to the material on record.

The case stemmed from an FIR registered on April 21, 2021, by the Central Bureau of Investigation against Anil Deshmukh, the erstwhile Home Minister of Maharashtra, and others, for offences under Section 7 of the Prevention of Corruption Act, 1988, and Section 120-B of the Indian Penal Code. The prosecution alleged that Deshmukh had directed police officials, including then-API Sachin Waze, to collect approximately ₹4.70 crores from orchestra bar owners across Mumbai between December 2020 and February 2021. The ED subsequently recorded ECIR No. ECIR/MBZO-1/66/2021 and filed a complaint before the Designated Court, which issued process against 14 accused persons, including Dewani, by an order dated September 16, 2021.

The ED’s case against Dewani rested primarily on his role as Director of M/s Premier Port Links Pvt. Ltd., a company that, as per Dewani’s own statement to the ED, had purchased approximately 20 acres of agricultural land at Dhutum Village from various individuals and farmers between 2004 and 2008. The prosecution alleged that M/s Flourish Properties Pvt. Ltd., a company indirectly controlled by Hrishikesh Deshmukh, son of Anil Deshmukh, had infused funds and extended a loan of approximately ₹2.20 crores to Premier Port Links, which was then used for the purchase of this land. The ED further alleged that Dewani had conspired with the Deshmukh family and transferred 50% of the company’s shares to Salil Deshmukh for a mere ₹17.5 lakhs, despite the company holding assets worth approximately ₹5.4 crores at the time.

Senior Advocate Sunil Manohar, appearing for Dewani, argued that the Court’s findings focused on the period 2005 to 2007 for the relevant property transactions, well before the alleged proceeds of crime were generated between December 2020 and February 2021. He contended that no averment existed in the charge sheet that Dewani had any knowledge of the proceeds of crime, which were generated approximately 15 years after the land purchases. He further pointed out that Dewani had himself invested an amount equal to that of the Deshmukh family in the company.

The Court found this argument legally sound and applied the principles laid down by the Supreme Court in Pavana Dibbur v. Directorate of Enforcement and Vijay Madanlal Choudhary v. Union of India. On the foundational requirement of establishing proceeds of crime, the Court observed that the existence of proceeds of crime is a sine qua non of the offence under Section 3 of the PMLA, 2002, and that property derived or obtained before the commission of the scheduled offence cannot be treated as proceeds of crime.

Addressing the central issue of timing, the Court categorically held that the property at Dhutum Village had no connection whatsoever with the proceeds of crime, observing:

“The property at Dhutum Village, acquired between 2005 and 2007, ex facie, cannot be said to have any connection with the proceeds of crime, as the acts constituting the scheduled offence took place during the period 2020–2021, i.e., after its acquisition.”

The Court also examined whether the prosecution’s alternative contention—that moneys were transferred into the trust account of Anil Deshmukh from as far back as 2013—could rescue the case against Dewani. It rejected this argument firmly, noting that even if the money trail from 2013 were accepted at face value:

“Even assuming the prosecution’s case that the moneys were transferred to the trust account of the principal accused, Anil Deshmukh, from 2013, the property purchased in 2005–2007 would still have no connection to the proceeds of crime.”

The Court faulted the Designated Court’s order dated September 16, 2021, observing that it did not disclose any application of judicial mind to the specific material, if any, available against Dewani. Relying on Sunil Bharti Mittal v. Central Bureau of Investigation, the Court underscored the importance of judicial application of mind before issuing process, quoting:

“The words ‘sufficient ground for proceeding’ appearing in Section 204 are of immense importance…”

Applying this standard, the Court found the Designated Court’s order bad in law and liable to be set aside for absence of reasons recorded with respect to the applicant. On the overall insufficiency of the charge-sheet material, it concluded:

“The charge-sheet and the material on record do not make out any case for the offence under Sections 3 and 4 of the PMLA, 2002, against the Applicant.”

Noting the complete absence of any evidentiary link between Dewani and the alleged crime, the Court further recorded:

“Mr. Prashant Mishra, Special Counsel for Respondent No. 1, was unable to point out any material… indicating the involvement of the Applicant in the crime in question.”

Accordingly, the Court allowed the Criminal Application and quashed both the process issued against Dewani and the complaint in PMLA Special Case No. 1089 of 2021 to the extent it pertained to him, holding that the case squarely fell within the principles justifying exercise of inherent powers under Section 528 of the Bharatiya Nagarik Suraksha Sanhita, 2023, to prevent abuse of the process of law.

Case Details:

• Case Title: Kishore S/o Pessulal Dewani v. The Directorate of Enforcement & The State of Maharashtra
• Case Number: Criminal Application No. 1075 of 2023 with Interim Application No. 575 of 2026
• Court: High Court of Judicature at Bombay, Criminal Appellate Jurisdiction
• Presiding Judge: Justice Ashwin D. Bhobe
• Date of Judgment: February 23, 2026
• Applicant’s Counsel: Mr. Sunil Manohar (Senior Advocate), Mr. Pralhad Paranjape, Ms. Sakshi Jogdand, Mr. Omkar Prashant Mulekar
• ED’s Counsel: Mr. Prashant Mishra (Special Counsel), Mr. Bharat Jadhav, Mr. Krish Kariya
• State’s Counsel: Ms. Pallavi N. Dabholkar (APP)

[Read Judgment]