MUMBAI: The Bombay High Court on Tuesday declared the Enforcement Directorate’s (ED) arrest of businessman Prateek Kanakia in a money-laundering case illegal and ordered his immediate release from jail.
A division bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad held that there was “no justifiable and plausible reason” to arrest Kanakia months after he had already been granted bail in the predicate CBI case.
Kanakia, the founder of The Green Billions Ltd (TGBL), was arrested by the ED on January 5, 2026, in connection with an alleged diversion of ₹50 crore from a loan sanctioned for waste management and smart infrastructure projects.
The CBI had alleged that funds from an ₹80 crore loan sanctioned by the Indian Renewable Energy Development Agency (IREDA) to Broadcast Engineering Consultants India Ltd (BECIL) were diverted for personal use by Kanakia, and that documents including a bank guarantee were forged. Certain project-related documents were also allegedly missing.
Kanakia was first arrested by the CBI on March 24, 2025, and received bail from a special court on August 4, 2025. The ED subsequently initiated a money laundering probe and arrested him on January 5, 2026. The businessman moved the high court, claiming his arrest by the ED was illegal and sought his immediate release.
Opposing his plea, the ED claimed his custody was necessary to prevent tampering with evidence and influencing witnesses.
However, the division bench observed that the investigating officer had initially proposed issuing a notice before arresting him and that Kanakia had cooperated with the probe on multiple occasions.
The bench also noted that the case was largely based on documentary evidence already in the ED’s possession and that Kanakia had appeared for questioning on seven occasions. The court observed that the investigating officer had initially proposed issuing a notice of appearance on January 2 but proceeded to arrest him three days later.
The court directed Kanakia’s immediate release, holding that the powers of arrest were exercised illegally.
“We have formed an opinion that the Investigating Officer has exercised the powers of arrest in an illegal manner. There seems to be no justifiable reason for making the arrest,” the court said.