The Allahabad High Court on Wednesday rejected the bail application of Unnati Fortune Holdings Ltd.'s main promoter and builder, Anil Mithas, who faces money laundering charges under the PMLA over the alleged diversion of ₹126.30 crore belonging to homebuyers.

In a significant observation, the bench said that white-collar crime has "grown too pervasive and too costly" to be met with anything less than "firm, uncompromising enforcement".

It added that treating such offences with an "iron hand" would close the perception that "wealth and status buy a softer form of justice".

A bench of Justice Krishan Pahal declined relief to Mithas, noting that the allegation of diverted ₹126.30 crore from various allottees was established by the independent audit report. The Court also noted that the applicant's counsel had been "dillydallying with the trial".

The Court, however, expressly clarified that its observations were limited to the facts before it for deciding the bail application and would not bear on the merits of the case at trial.

Case in brief

The Enforcement Directorate (ED) registered an ECIR on December 23, 2024, in Lucknow, alleging that Mithas had collected ₹522.90 crore from home buyers for 1,468 units in the Aranya Project, but delivered possession to only 35 home buyers. An audit report reportedly revealed a divergence of ₹107 crore.

The ED subsequently alleged that its investigation identified ₹126.30 crore as proceeds of crime, allegedly diverted through various financial instruments, including equity investment, debentures, bonds, preference shares, and loans and advances to associate companies.

The agency further alleged that ₹88 crore was given as an advance and shown as irrecoverable in the books of account.

Arguments advanced

Disputing the prosecution's case, Mithas' counsel submitted that the amounts alleged to have been diverted were, in fact, promoter contribution, inter-corporate loans, institutional borrowings or security deposits.

It was also submitted that the company had received approximately ₹500 crore from home buyers but had incurred expenditure of about ₹670 crore, and that the company had consequently fallen into severe financial crisis.

The applicant argued that this financial position indicated an absence of any story of money laundering or wrongful gain.

He also argued that he had cooperated with the investigating agency and personally appeared before it on several dates in March and April 2025. Since the prosecution complaint had already been filed, it was argued that there was no risk of tampering with evidence.

ED's stance

Opposing the bail plea, the Enforcement Directorate supported the allegations and submitted that the applicant's immovable properties had been attached and that, if released, he was likely to commit further offences.

It further alleged that he was a flight risk and had a criminal history of nine cases.

High Court's observations

While considering the bail plea, the Court made extensive observations regarding white-collar crime. It remarked thus:

"White-collar crime has grown too pervasive and too costly to be met with anything less than firm, uncompromising enforcement".

The Court noted that corporate fraud, embezzlement, insider trading and large-scale financial deception routinely destroy pensions, savings and livelihoods on a scale that, in its words, "dwarfs the damage caused by many street crimes".

The Court further observed that offenders had often faced comparatively lenient sentences, fines their companies could absorb as a cost of doing business, or plea deals that avoided "real accountability".

The Court stated that treating such offences with an "iron hand" through measures including mandatory custodial sentences, personal liability for executives regardless of corporate shielding, asset forfeiture and aggressive prosecution would address the perception that "wealth and status buy a softer form of justice".

"A firm stance", the Court said, would send an "unambiguous signal" that economic offences, because of their often "invisible and diffuse" harm, deserve no less severity than crimes committed with a weapon.

The Court had called for a status report from the trial court. The report showed that the applicant had been present on several dates, while his counsel had been absent on various occasions.

The report further revealed that arguments on behalf of the applicant for framing of charge had concluded on July 30, 2026, and the case was fixed for a cognizance order on August 24, 2026.

The Court noted that the applicant had been charged with allegedly diverting ₹126.30 crore from various allottees and that, at the bail stage, the Court found the amount established by the independent audit report.

Coupled with the Court's finding regarding the conduct of the applicant's counsel during the trial proceedings, Justice Pahal held that it was not a fit case for bail.

The bail application was accordingly rejected.

The Court nevertheless directed that the case pending before the trial court be decided expeditiously, in accordance with law, without granting unnecessary adjournments to either party, if there was no legal impediment.

It also clarified that the observations made while deciding the bail application would not affect the merits of the case during trial.

Senior Advocate Vinay Saran, assisted by Saumitra Dwivedi and Pankaj Sahni, appeared for the applicant

Advocate Sushant Chandra appeared for ED.

Case Title - Anil Mithas vs. Directorate of Enforcement 2026 LiveLaw (AB) 717

Case citation: 2026 LiveLaw (AB) 717

Click Here To Read/Download Order