MUMBAI: The Supreme Court on Tuesday dismissed the Enforcement Directorate’s (ED) special leave petition (SLP) challenging the Bombay High Court’s order dated October 15, 2025, which declared as illegal the arrest of former Vasai Virar City Municipal Corporation (VVCMC) commissioner Anilkumar Pawar in a money laundering case related to the construction of now-demolished 41 buildings in Vasai and alleged corruption in the VVCMC.
“We are not inclined to interfere with the impugned judgment and order passed by the High Court. The Special Leave Petition is, accordingly, dismissed. Pending application(s) shall stand disposed of,” the SC order read.
“The honorable Supreme Court agreed with the core reasoning of the Bombay High Court – that the grounds of arrest were vague and unsupported by tangible material, particularly as the alleged proceeds of crime were said to have arisen from illegal constructions dating back nearly 15 years, at a time when Mr Pawar was not even posted as VVCMC commissioner,” Pawar’s lawyer Ujjwalkumar Chavhan, a former Indian Revenue Service (IRS) officer, told Hindustan Times.
Tuesday’s apex court order, delivered by a bench comprising justices Vikram Nath and Sandeep Mehta, would set “a good precedent for future cases”, Chavan said.
Pawar, who served as VVCMC commissioner from January 2022 to July 2025, could not be reached for comments.
The Indian Administrative Services (IAS) officer was arrested by the ED’s Mumbai unit on August 13, 2025. He was released from jail after the Bombay High court on October 15, 2025 deemed his arrest illegal and quashed all remand orders passed by the additional sessions judge of the designated special PMLA court in Mumbai.
On October 16, 2025, the ED filed the criminal SLP in the Supreme Court. After two extensions, it was listed for final hearing on Tuesday, and dismissed after detailed arguments and a prolonged exchange between both sides.
The ED’s probe was initiated by registering an ECIR (Enforcement Case Information Report), based on multiple first information reports registered by the Mira-Bhayandar police Commissionerate in connection with the construction of 41 illegal buildings in Vasai East, on a 60-acre plot which was partially reserved for a dumping ground and sewage treatment plant. The buildings were demolished in early 2025, in pursuance with orders from the Bombay HIgh Court and the Supreme.
According to the ED, during his tenure as VVCMC chief, Pawar headed a cartel of civic officials, architects and liaison agents and accepted bribes in exchange for overlooking illegal constructions and approving building plans, allegedly making ₹169 crore from various bribes and commissions.
In its order, the Bombay High Court bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad strongly criticised the ED for arresting the IAS officer, and called its action arbitrary, illegal and unsupported by evidence.
The ED’s stand against Pawar was “speculative”, “based on hazy facts”; his arrest was made “without any tangible material”, in violation of the safeguards provided under the PMLA; and there was “no prima facie case made out” against Pawar as the same facts were reiterated under the “grounds of arrest” and “reasons to believe” clauses, the order said.
The high court noted that as of August 13, the arresting officer did not possess sufficient material to justify forming a “reason to believe” that the IAS officer had committed an offence under the PMLA. Pawar’s arrest was not only contrary to section 19 of the PMLA but also an infringement of his fundamental rights under Articles 14, 19 and 21 of the Constitution, the court said.
The court further noted that the ED’s case was built on the statement of YS Reddy, former deputy director of the VVCMC town-planning department, and a co-accused in the case who was arrested along with Pawar. The ED’s claim that a “code-word system” for collection of bribes was devised and huge tainted money was received “did not lead anywhere in as much as no recovery was effected” from the premises or possession of Pawar or his family members, the court said.
The high court turned down ED’s allegation about Pawar turning “a blind eye” to rampant illegal construction and receiving around ₹17.75 crore from co-accused Reddy, as they were not backed by details on specific projects or development plans as disclosed by ED.
The ED’s own search panchnama recorded that “no incriminating documents, unaccounted cash or electronic devices were found or seized” from Pawar’s home, and there was no recovery of any material that could be treated as proceeds of crime, the court said. The ED had failed to show how Pawar could be linked to any money trail or property derived from alleged criminal activity, it noted.
Apart from Pawar and Reddy, the ED had arrested former VVCMC corporator Sitaram Gupta and a co-accused identified as Arun Gupta for their alleged involvement in the case.