Rs 975-cr bank loan ‘fraud’: HC grants interim bail to former vice-president of Mandhana Industries arrested by ED
The central agency had also arrested Priyavrat’s father, Purushottam Mandhana, a director in the company.
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.The bench observed that the petitioner had cooperated with the probe from the date of first search on June 26, 2024. (File Photo)The Bombay High Court on Thursday granted interim bail to Priyavrat Mandhana (25), former vice-president of Mandhana Industries Limited, who was arrested by Enforcement Directorate (ED) in connection with the alleged Rs 975-crore bank loan fraud case.
A division bench of Justices Revati Mohite-Dere and Prithviraj K Chavan passed an order on Priyavrat’s plea claiming ‘illegal arrest’ on the ground that the agency failed to provide the ‘reason to believe’ that he had committed the offence, as mandated under PMLA.
The ED had claimed that a consortium of banks led by Bank of Baroda was defrauded, where the company through its promoters and directors, diverted funds given as loans to the tune of Rs 975 crore. The central agency had also arrested Priyavrat’s father, Purushottam Mandhana, a director in the company.
On July 25 this year, a special court designated under Prevention of Money Laundering Act (PMLA) had ordered his release, rendering his arrest “illegal” as the provisions of PMLA were not followed.Senior advocate Ravi Kadam representing the petitioner argued that his arrest and detention by the agency on July 29 this year around 7 in the morning by seven to nine officers, who approached his residence under the pretext of search and seizure, was ‘untenable’ and against the principles laid down in various Supreme Court judgments in Senthil Balaji, Pankaj Bansal and Arvind Kejriwal cases.The bench observed that the petitioner had cooperated with the probe from the date of first search on June 26, 2024.
“Prima facie, it seems that respondents already had sufficient material as being alleged proceeds of crime as enumerated in the grounds of arrest. If that being so, we find no reason to accept the argument of ED that in order to prevent the destruction or tampering of the evidence, the petitioner’s arrest was necessary…It has been observed that a higher threshold is required for making an arrest, necessitating a review of the material available to demonstrate the person’s guilt,” the HC noted.It observed that the respondent authorities was in possession of the material related to proceeds of crime prior to his arrest and could have arrested the petitioner at the time of alleged first search itself.Pending disposal of the plea, the bench granted interim relief to the petitioner citing that ‘right to life and liberty is sacrosanct in view of constitutional mandate” and posted further hearing to November 12.
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