The Enforcement Directorate (ED) in Mumbai has started the process of returning immovable properties worth ₹55.85 crore to the State Bank of India (SBI). These properties were earlier attached by the ED under Section 5 of the Prevention of Money Laundering Act (PMLA) in connection with a major bank fraud involving M/s Varron Aluminium Private Limited (VAPL) and its group companies.
The ED had started its investigation based on FIRs registered by the CBI, BS&FC, Mumbai, against VAPL and others. According to these cases, Bank of India was cheated of ₹293.74 crore, while SBI suffered a loss of ₹401.25 crore. The chargesheet stated that a manual Letter of Credit (LC) of ₹300 crore was issued by Canara Bank on behalf of VAPL in favour of its group company M/s VACPL. This LC was then discounted by Bank of India using fake documents, without proper verification.
During its investigation, ED discovered that new Letters of Credit were constantly opened to repay older ones. This circular method involved VAPL, VIPL, and several shell companies. The aim was to repay old loans, reduce cash-credit liabilities and artificially inflate the company’s financial records. ED started the investigation, identified the Proceeds of Crime (POC) and issued two attachment orders covering immovable properties worth ₹179.27 crore in total.
SBI has suffered the maximum loss and requested ED to return the seized properties to it so that it can sell the properties and adjust its loss. Section 8(8) of PMLA allows the ED to return attached or confiscated properties to rightful owners or victims of money laundering. These provisions ensure that when a property has been acquired through illegal means but the rightful claimant is innocent, the property can be restored to them.
SBI filed an application before the Special PMLA Court in Mumbai, seeking the return of three attached properties worth ₹55.85 crore. During the hearings, the ED submitted an affidavit supporting SBI’s claim and agreed to return the properties. On 26 September 2025, the Hon’ble Special PMLA Court, Mumbai, allowed SBI’s application and ordered the restitution of the three immovable properties to the bank.
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