Mumbai, Jan 13: In a significant ruling blending strict law with equitable relief, the Bombay High Court has directed that 50 per cent of the interest earned on Rs 46.5 crore deposited by the Directorate of Enforcement (ED) be paid to the Armed Forces Battle Casualties Welfare Fund (AFBCWF), citing the “urgent and pressing need” to support widows and children of soldiers who lost their lives for the country.
ED appeals dismissed
A bench of Justices Ajay Gadkari and R. R. Bhonsale passed the order while dismissing a batch of appeals filed by the ED against a 2019 decision of the PMLA Appellate Tribunal, which had set aside the attachment of assets worth Rs 141.50 crore belonging to Shapoorji Pallonji & Company Ltd (SPCL).
Background of the case
The case related to money paid by SPCL to Nitesh (also known as Nilesh) Thakur and his companies from 2005 onwards under an agreement to buy around 900 acres of land in Alibaug and Pen near Navi Mumbai at Rs 30 lakh per acre.
The ED claimed that these payments were “proceeds of crime” linked to a disproportionate assets case registered against Thakur, a public servant, under the Prevention of Corruption Act (PC Act) in 2009. After the PC Act became a scheduled offence under the Prevention of Money Laundering Act (PMLA), the ED attached properties allegedly bought from this money.
SPCL challenge upheld
However, SPCL challenged the attachment, pointing out that the money was paid under a land purchase agreement and was recorded as advance payments in income tax records. The company also argued that Thakur was on “unsanctioned leave” for nearly four years and was not performing public duties when the payments were made.
In January 2019, the PMLA Tribunal accepted SPCL’s arguments and ordered the release of the attached properties, holding that the money could not be treated as criminal proceeds. The ED then approached the High Court, which stayed the order but directed the agency to deposit Rs 46.5 crore with the court.
High Court’s final ruling
In its final judgment dated December 23, 2025 (made available on January 8), the High Court upheld the Tribunal’s decision. The bench said the ED had failed to prove that SPCL had bribed Thakur or that the money was linked to any criminal activity.
While ordering that the Rs 46.5 crore be returned to SPCL, the court directed that half of the interest earned on this amount be paid to the Armed Forces Battle Casualties Welfare Fund and acknowledged the “sacrifices of the soldiers for protecting the country and borders and also difficulties faced by the widows and the families of the soldiers who have sacrificed their lives for the country”.
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“There is an urgent and pressing need to provide for the families and widows of soldiers who have lost their lives in protecting the nation,” the judges said, adding that the direction was issued to “balance the equities”.
The High Court dismissed all ED appeals and confirmed the Tribunal’s 2019 order in favour of SPCL.
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