A special court under India’s Prevention of Money Laundering Act (PMLA) has closed proceedings against a private company, its promoter and BJP leader Mohit Kamboj, and several co-directors, ending a case linked to an alleged ₹67.22 crore loan default involving Bank of India.
The order, passed by Special Judge R.B. Rote in Mumbai, accepted a closure report filed by the Enforcement Directorate (ED). The agency told the court it could not continue with the money laundering prosecution after the Central Bureau of Investigation (CBI) had already closed the underlying—or “predicate”—offence on which the ED’s case was based.
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In his order dated January 16, the judge noted that once the CBI court had accepted the closure of the main offence, the Enforcement Case Information Report (ECIR) could not legally survive. The only course left, he said, was to formally close the PMLA case as well.
Origins of the Alleged Loan Fraud
The case traces its roots to a complaint filed by Bank of India, which accused Bagla Overseas Private Limited—earlier known as Avyaan Overseas Pvt. Ltd.—and its promoters and directors of defrauding the bank of ₹67.22 crore.
In June 2020, the CBI registered an FIR against Mohit Kamboj, the company’s managing director, along with directors Jitendra Gulshan Kapoor, the late Naresh Madanji Kapoor, Siddhant R. Bagla and Irtesh Mishra. The FIR also named KBJ Hotels Goa Pvt. Ltd. and unidentified bank officials.
According to the CBI, the company had obtained a ₹60 crore credit facility meant to support export operations, including procurement of raw materials, manufacturing and packaging, until export proceeds were realised. Investigators alleged that instead of routing transactions through Bank of India as required, the firm raised bills on sister concerns in India and abroad.
The export proceeds, the CBI claimed, were never brought back to the bank, causing the account to turn into a non-performing asset. The agency also alleged that funds were diverted to purchase properties in the names of family members, and questioned the acceptance of a Goa property as collateral, saying its market value was far below the loan exposure.
Settlement Changes the Legal Trajectory
The trajectory of the case shifted in 2023, when Bank of India agreed to a one-time settlement of ₹30 crore with the company and issued a no-objection certificate for closure of the account. Following the settlement, the CBI filed a closure report in May 2023, which was accepted by a special CBI court the following month.
With the principal criminal case closed, the ED found itself without a legal foundation to pursue money laundering charges. Although the agency had launched its probe in June 2020 on the strength of the CBI FIR, it told the PMLA court that prosecution could not continue once the predicate offence no longer existed in law.
Judge Rote agreed, observing that the continuation of the ECIR was “not maintainable” in the absence of an active scheduled offence.
Wider Implications for Financial Crime Probes
The closure highlights a recurring feature of India’s financial crime framework: the dependence of money laundering cases on the survival of the underlying offence. Legal experts note that while the ED often pursues parallel action under PMLA, its cases can unravel if banks settle disputes and investigative agencies close primary complaints.
For Mohit Kamboj and the other accused, the court’s order brings an end to nearly four years of criminal scrutiny tied to the loan default. For enforcement agencies, the case illustrates the limits of prosecution when financial settlements alter the evidentiary and legal landscape.
As banks increasingly turn to negotiated settlements to recover stressed assets, such outcomes may continue to shape the contours of economic offence litigation—raising broader questions about deterrence, accountability and the balance between recovery and prosecution in India’s financial system.
About the author — Suvedita Nath is a science student with a growing interest in cybercrime and digital safety. She writes on online activity, cyber threats, and technology-driven risks. Her work focuses on clarity, accuracy, and public awareness.
