Mumbai, Mar 10 (PTI) A person acquires proceeds of crime if he takes a bribe, the Bombay High Court has said while refusing relief to a former senior official of the Vasai Virar City Municipal Corporation arrested by the ED last year in a money laundering case.

A bench of Chief Justice Shree Chandrashekhar and Justice Gautam Ankhad on Monday dismissed the petition filed by Y Shiva Reddy, former deputy director of the VVCMC's town planning department, seeking to declare his arrest as illegal and also to quash the subsequent remand orders passed by a special court.

Reddy, currently in judicial custody since his arrest in August last year, in his plea said the predicate offence against him under provisions of the Prevention of Corruption Act was lodged after the Enforcement Directorate (ED) carried out searches at his residences.

He had also claimed that there was no evidence to show the alleged cash and jewellery recovered from his residence were acquired from the proceeds of crime from the predicate offence.

The HC, in its judgment, however, noted that the Prevention of Money Laundering Act (PMLA) provision defines "proceeds of crime" in expansive terms to mean any property derived or obtained, directly or indirectly, because of a criminal activity.

"If a person takes a bribe, he acquires proceeds of crime," the high court said in the order, a copy of which was made available on Tuesday.

The allegation against Reddy and other officials is that between 2019 and 2023, illegal construction of 41 buildings by developers was permitted using forged permissions and fabricated documents on lands that were reserved for a sewage treatment plant and dumping ground.

The HC bench in its order said prima facie the recovery of unaccounted cash, jewellery and other incriminating articles and the statement of witnesses taken together provided sufficient foundation for the ED to believe that Reddy was prima facie guilty of money laundering.

As per ED's allegations, Reddy had used the bribe amount to purchase jewellery and other luxury items, the high court said.

The arrest memo in the present case indicates that there was tangible and credible evidence of Reddy's involvement in the offence, it noted.

The high court also held that quantification of the proceeds of crime may vary as the investigation in the case progresses.

The ED, in its searches carried out at Reddy's residences, recovered unaccounted cash of Rs 8.23 crore and jewellery valued at Rs 23.28 crore, it noted.

While dismissing Reddy's petition, the bench said it did not find a prima facie case made out for interference, and hence no case was made out to declare his arrest as illegal or to quash the subsequent remand orders.

The Enforcement Directorate followed due process of law before arresting Reddy on August 13, 2025, the HC said.

The ED conducted searches at Reddy's residences on June 23, 2025 and shared information with the local police, based on which an FIR was registered on August 1, 2025.

The high court, in its order, noted that the ED began its probe into the alleged scam in February last year, and during the investigation, Reddy's role in relation to development permission and illegal construction on government land came to light. PTI SP GK