Enforcement Directorate Conducts Multi-City Search Operations, Seizing Cash, Jewellery, and Incriminating Documents in Large-Scale Illegal Construction Case
(Syed Ali Taher Abedi)
Mumbai, May 15, 2025 — The Mumbai Zonal Office of the Directorate of Enforcement (ED) recently conducted extensive search operations at 13 different locations across Mumbai and Hyderabad under the provisions of the Prevention of Money Laundering Act (PMLA), 2002. These searches, carried out over two days—on May 14 and May 15, 2025—have resulted in significant seizures, including approximately ₹9.04 crore in cash and ₹23.25 crore worth of diamond-studded jewellery and bullion. Additionally, a substantial number of incriminating documents have been recovered, providing key insights into a widespread fraudulent construction racket.
The investigation by the ED stalks from multiple First Information Reports (FIRs) registered by the Mira Bhayandar Police Commissionerate against a group of builders, local operatives, and other associates. The case revolves around the illegal construction of residential and commercial buildings on government-owned and private land within the jurisdiction of Vasai Virar Municipal Corporation (VVMC). This illicit activity dates back to 2009, and over time, at least 41 illegal structures were erected on land earmarked for critical civic infrastructure—including a sewage treatment plant and a designated dumping ground—as per the officially approved development plan for Vasai Virar City.
Authorities have discovered that the builders and developers behind this scheme systematically deceived the general public by fraudulently fabricating approval documents. Despite being fully aware that the constructions were unauthorized and would eventually face demolition, these developers misled homebuyers and investors, selling units within these illegal buildings under false pretenses. This deceitful operation not only inflicted financial losses upon unsuspecting buyers but also undermined urban planning regulations and governance in the region.
Following legal proceedings, the Hon’ble Bombay High Court issued a decisive order on July 8, 2024, mandating the demolition of all 41 unauthorized buildings. Subsequently, an appeal in the form of a Special Leave Petition (SLP) was filed before the Hon’ble Supreme Court by families residing in these structures. However, this petition was dismissed, thereby upholding the High Court’s ruling. In compliance with the court’s directives, the Vasai Virar Municipal Corporation completed the demolition process of all 41 illegal buildings on February 20, 2025.
As the ED delved deeper into its investigation, it uncovered a longstanding and highly organized illegal construction network operating in the region since 2009. The prime perpetrators of this widespread scam have been identified as developers Sitaram Gupta and Arun Gupta, along with their associates. Furthermore, evidence suggests that these unauthorized constructions were facilitated through the direct involvement of multiple VVMC officials, who allegedly colluded with the developers to circumvent regulatory oversight.
One of the most significant discoveries during the ED’s search operation was at the residence of Y S Reddy, Deputy Director of Town Planning at VVMC. Officials seized a staggering ₹8.6 crore in cash along with diamond-studded jewellery and bullion valued at ₹23.25 crore. In addition to these material assets, a trove of incriminating documents was recovered, shedding light on the large-scale scam. These documents provide crucial evidence of the deeply entrenched nexus between corrupt municipal officials and unscrupulous builders, highlighting the extent to which fraudulent practices were conducted in Vasai Virar with official complicity.
The ED has assured that further investigation into the case is actively ongoing, with efforts to trace additional financial transactions, identify all beneficiaries of this illegal operation, and pursue legal action against those involved.
