Mumbai, September 22, 2026: The Bombay High Court has delivered a stern rebuke to the Enforcement Directorate (ED), ruling that the agency cannot bypass existing judicial orders to carry out arbitrary arrests.
Terming the ED’s actions a "colourable exercise of power," Justice Milind Jadhav set aside the remand orders passed against former director of Lodha Developers, Rajendra Narpatmal Lodha, under the Prevention of Money Laundering Act (PMLA) and ordered his immediate release on bail.
Dispute Over ED Arrest
The legal dispute stems from two FIRs registered against Lodha in September 2025, following which the ED initiated a parallel money laundering probe. On January 29, 2026, the ED applied to the Special Court under Section 50 of the PMLA, seeking permission to interrogate Lodha in judicial custody.
The court granted permission on January 30, directing the agency to record his statement between February 2 and February 6. However, instead of interrogating him, the ED abruptly arrested Lodha on February 12 under Section 19 of the Act, relying on the exact same material it had previously possessed.
Lodha’s counsel argued that the arrest was illegal because no fresh incriminating evidence or supervening circumstances emerged between January 30 and February 12 to justify a new "reason to believe" for arrest.
Additional Solicitor General representing ED countered that the agency's power to arrest under Section 19 operates independently of pending Section 50 interrogation orders.
Court Rejects ED's Argument
Rejecting the ED's argument, the High Court observed that abandoning a court-sanctioned interrogation process without new evidence undermines the statutory scheme:
"Such exercise of power of arrest shall amount to a colourable exercise of power on the part of Respondent No.1... Once such an opinion was formed in writing and an order thereon was passed by the Special Court, Respondent No.1 cannot forego the same and abandon the same within a period of 12 days... proceed with arresting the Petitioner... This is only justified if a supervening exigency so arises."
Justice Jadhav also reprimanded the agency for failing to inform the Special Court of its own prior application:
"The Application dated 12.02.2026 is a detailed Application running into 13 pages, but it conspicuously avoids reference to the previous application dated 29.01.2026 and order dated 30.01.2026 altogether. Such suppression in the facts and circumstances of the present case cannot be countenanced, since the power to arrest is a very drastic power which infringes upon the personal liberty of the arrestee."
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Lodha Granted Bail
The High Court granted Lodha bail on a personal bond of Rs 5 lakh with sureties, ordering him to surrender his passport and cooperate with the ongoing trial. An oral plea by the ED to stay the order was rejected.
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