Hyderabad: The appellate tribunal under SAFEMA has upheld the Enforcement Directorate’s retention of currency and documents seized from AP Mahesh Cooperative Urban Bank chairman Ramesh Kumar Bung, rejecting his challenge of the order of the PMLA Adjudicating Authority.In its recent order, a bench headed by chairman Justice Munishwar Nath Bhandari dismissed Bung’s appeal and held that the adjudicating authority has an independent power under Section 8(3) of the PMLA to order retention of property seized or frozen during an ED investigation.The tribunal, however, left Bung free to raise his arguments regarding his factual involvement in the alleged offences during the criminal trial or at the stage of framing of charges. The case relates to an alleged fraud at Mahesh Cooperative Bank in which FIRs were registered by Hyderabad police in 2024.Tribunal differs with Delhi HC interpretationBung had argued that the retention order dated Jan 6, 2025 was invalid as the ED had not first passed an order under Sections 20(1) and 20(2) of the PMLA. He relied on the Delhi high court’s Sept 12, 2025 ruling in Directorate of Enforcement v Rajesh Kumar Agarwal, which held that Section 8(3) permits the adjudicating authority only to confirm an existing retention order.The tribunal declined to follow that interpretation, holding the Delhi HC ruling to be per incuriam for not considering the Supreme Court’s three-judge bench judgment in Vijay Madanlal Choudhary v Union of India.Relying also on its April 2026 ruling in S. Srividhya v. Directorate of Enforcement, Chennai, the tribunal said Section 8(3) independently empowers the adjudicating authority to order “retention” of seized or frozen property. It said requiring a prior Section 20 order would create overlapping procedures and conflict with the 30-day timeline under Section 17(4).Case linked to AP Mahesh Bank probeThe ED investigation arose from Hyderabad police FIRs alleging cheating, criminal breach of trust and financial irregularities involving AP Mahesh Cooperative Urban Bank.In 2024, ED searches in Hyderabad covered premises linked to Bung, managing director Umesh Chand Asawa, vice-chairman Purushottamdas Mandhana, Solipuram Venkat Reddy and others.The underlying allegations included irregular loans exceeding ₹300 crore, alleged diversion of ₹18.3 crore linked to construction expenditure, forgery and misappropriation of funds. The complaints were lodged by AP Mahesh Cooperative Bank Shareholders Association secretary Shyam Sunder Biyani.Bung has maintained that the complaints were politically motivated and instigated by rivals in the cooperative society elections. His earlier petition seeking quashing of the primary FIR was dismissed by the Telangana high court.
