The Supreme Court of India delivered a significant ruling on Tuesday, dismissing the special leave petition filed by the Enforcement Directorate (ED). The federal agency had challenged the bail granted to Anil Pawar, the former municipal commissioner of the Vasai-Virar City Municipal Corporation (VVCMC), in a high-profile money laundering case.
Bombay High Court's Bail Order Upheld
This Supreme Court decision effectively upholds the Bombay High Court's October 2025 order that granted bail to Anil Pawar. In that ruling, the High Court had strongly criticized the ED's actions, declaring Pawar's arrest on August 13 as "illegal." The court noted that the agency had merely reiterated the same or similar facts in both the "grounds of arrest" and "reasons to believe" documents.
Furthermore, the High Court characterized the ED's position as "speculative and based on hazy facts." It specifically addressed the core allegation, stating that "the case built up by ED, based on the statement of Y S Reddy [deputy director of town planning] that a codeword system for collection of commission was devised and huge tainted money was received, does not lead anywhere...as no recovery was effected from the premises of the petitioner, or from his possession, or...his family members."
Background of the Money Laundering Case
The legal proceedings stem from multiple First Information Reports (FIRs) concerning the construction of 41 illegal buildings in the Vasai-Virar region. These structures were erected on both government and private land parcels, including a significant 60-acre plot designated for a sewage treatment plant and dumping ground in the official development plan. Following a 2024 High Court order, all these illegal buildings were subsequently demolished.
The Enforcement Directorate's involvement intensified in May 2025 when the agency conducted a raid on the Hyderabad premises of Y S Reddy. During this operation, officials allegedly seized Rs 8.6 crore in unaccounted cash, along with jewellery and gold valued at approximately Rs 23.2 crore. While examining Reddy's digital records, investigators purportedly discovered Anil Pawar's involvement in suspicious financial transactions, which ultimately led to his arrest in the money laundering case.
Key Allegations and Counterarguments
The ED subsequently filed a chargesheet against Anil Pawar, his wife, and several others, accusing them of money laundering activities. The agency alleged that Pawar's wife acted as a front to infuse proceeds of crime amounting to Rs 169.6 crore into the legal financial system, thereby projecting these funds as untainted. As part of the investigation, the ED also attached properties worth Rs 71 crore, claiming that approximately Rs 44 crore of these assets belonged to Anil Pawar.
In his defense, Anil Pawar contended that the alleged proceeds of crime were generated many years prior, during a period when he was not posted at the VVCMC. Therefore, he argued that he had no role in the money laundering case. The Enforcement Directorate countered this claim by asserting that money laundering constitutes a continuous offence. The agency further alleged that Pawar had provided protection to the illegal buildings—which are central to the case and have since been demolished—in exchange for bribes.
The ED filed its special leave petition in the Supreme Court immediately after the Bombay High Court released Anil Pawar on bail, seeking to overturn the bail decision. However, the apex court's rejection of this petition represents a substantial legal setback for the agency in this particular case.
