ED attaches Rs 131 crore, files PMLA complaint in Kotak-Panchkula case

The Enforcement Action

The Directorate of Enforcement (ED), Chandigarh Zonal Unit, has filed a prosecution complaint against nine accused persons and provisionally attached assets worth Rs 131.13 crore in what it terms the Kotak Mahindra Bank Fraud Case involving the funds of the Municipal Corporation (MC), Panchkula. According to the ED's press release dated 5 August 2026, the complaint was filed on 30 July 2026 and the Provisional Attachment Order (PAO) was issued on 29 July 2026 under the Prevention of Money Laundering Act, 2002 (PMLA).

The attached sum of Rs 131.13 crore comprises bank balances of Rs 12.85 crore and immovable properties worth Rs 118.28 crore, per the order. The ED states this represents "100% of the embezzled funds of MC Panchkula", together with a portion of cash interest payments linked to the matter, and that the attachment was completed within four months of the first information report (FIR) being registered by the law-enforcement agency.

The agency says its investigation began on the basis of an FIR registered by the Anti-Corruption Bureau (ACB), Panchkula, Haryana, under various sections of the Bharatiya Nyaya Sanhita, 2023, and the Prevention of Corruption Act, 1988, against unknown officers and officials of Kotak Mahindra Bank. The FIR, the ED says, revealed the alleged embezzlement of MC Panchkula funds through what it describes as a "deep-rooted and well-organised criminal conspiracy" by unknown bank officials.

The ED names Pushpinder Singh, described in the release as the then Deputy Vice President of the bank (and elsewhere in the same release as its former Branch Manager), as the person it alleges played the pivotal role. Per the release, Pushpinder Singh was arrested on 1 June 2026 and remanded to nine days of custody for interrogation by the Special PMLA Court, Panchkula. The individuals named in the ED's action have not publicly responded to it on the record reviewed for this report.

How the Scheme Worked

The mechanism described in the ED's order centres on two bank accounts the agency alleges were opened without authorisation. According to the release, Pushpinder Singh, "in connivance with Vikas Kaushik, an official of MC Panchkula", and with the involvement of Dilip Raghav, an employee of Kotak Mahindra Bank, opened two unauthorised accounts in the name of MC Panchkula using "a series of fake documents and authorisations" purportedly on the corporation's behalf. The ED alleges that genuine communications and authorisation letters from MC Panchkula were disregarded and that parallel authorisation letters were created instead. It also states that Satish Kumar of Kotak Mahindra Bank was involved in the alleged siphoning.

The agency alleges that the mobile numbers and email IDs linked to the two fake accounts and to the genuine MC Panchkula accounts were changed to contacts under the effective control of Vikas Kaushik and Pushpinder Singh. This, per the ED, circumvented the checks prescribed in the bank's Standard Operating Procedures (SOPs) against unauthorised transfers, so that confirmation requests for the disputed transactions reached devices the accused allegedly controlled. Funds in the genuine MC Panchkula accounts were then moved to the two unauthorised accounts, the ED alleges, using fake authorisation letters.

Once the money reached the unauthorised accounts, the ED alleges it was layered onward to several named individuals and to entities described as S.K. Agrotech and S.K. Agrofirm, "for further layering of the funds and to disguise the source of the Proceeds of Crime". The accounts of some intermediaries were under Pushpinder Singh's effective control, the agency alleges, and were used to route funds to his personal accounts, to those of Preeti Thakur (his wife), and towards immovable property and movable assets such as luxury cars, watches and furniture.

Per the ED, the funds were also used to advance unsecured loans in return for cash interest of "3% per month or 36% per annum". The agency says searches under Section 17(1) of the PMLA were conducted on 22 April 2026 at premises linked to Pushpinder Singh and others, resulting in the seizure of documents. The ED further alleges that after the alleged fraud was detected, luxury vehicles - including a Porsche Cayenne, several BMW models, Jeep Wranglers, a Land Cruiser and a Harley-Davidson - were sold to third parties, and that a Sector 2, Panchkula property was sold to Pushpinder Singh's sister in what it characterises as "round tripping of funds" intended to shield assets from attachment. The ED states that total net MC Panchkula funds of Rs 107.24 crore were retained across the illegal and intermediary accounts.

The Law Invoked

The proceeding is grounded in the Prevention of Money Laundering Act, 2002. The ED says it provisionally attached the proceeds of crime under Section 5(1) of the PMLA, the provision that lets an authorised officer attach property believed to be involved in money laundering, subject to later confirmation. The searches, per the release, were carried out under Section 17(1), which governs search and seizure during a PMLA investigation.

The prosecution complaint - the PMLA equivalent of a chargesheet - has been filed under Sections 44 and 45 of the Act. Section 44 deals with the trial of money-laundering offences by the designated Special Court, while Section 45 sets out the conditions governing offences and bail under the PMLA.

The predicate, or underlying, offence sits in the ACB Panchkula FIR, which the ED says was registered under various sections of the Bharatiya Nyaya Sanhita, 2023 - the penal code that has replaced the Indian Penal Code - and the Prevention of Corruption Act, 1988. Money laundering under the PMLA is a standalone offence that depends on such a predicate ("scheduled") offence having been alleged. The ED's release does not enumerate the specific BNS or PC Act section numbers, and none are supplied here.

What Happens Next

A provisional attachment is not the end of the process. Under the PMLA, a PAO must be placed before the Adjudicating Authority, which decides within the statutory window whether to confirm the attachment after hearing the affected parties. A confirmed attachment can then be challenged before the Appellate Tribunal under the PMLA, and onward before the High Court. The property remains attached, not forfeited, until the proceedings conclude; final confiscation follows only on the outcome of the trial.

On the criminal side, the Special PMLA Court, Panchkula, will consider whether to take cognizance of the prosecution complaint filed against the nine accused. If it does, the matter proceeds to trial, where the allegations must be proved. The ED has said its investigation is continuing, which leaves open the possibility of supplementary complaints or further action.

At every stage before a conviction, the contents of the FIR, the attachment order and the prosecution complaint remain allegations to be tested through due process, not findings of guilt. The accused are entitled to contest the attachment before the Adjudicating Authority and to defend the complaint at trial.

What It Means

For ordinary readers, the case is less about luxury cars than about how public money held in a bank can allegedly be moved without the account-holder's knowledge if internal controls are defeated. The ED's narrative turns on tampering with the mobile numbers and email IDs tied to the accounts - the same alert channels ordinary customers rely on. The practical lesson is that confirmation messages are a control only if the contact details on record are genuinely yours and are checked regularly.

For institutions and public bodies that park large balances, the matter underscores why authorisation letters, signatory mandates and account-opening approvals need independent verification rather than trust placed in a single relationship manager. Reconciling statements against the entity's own records, and confirming registered contact details directly with the bank, are the routine checks that catch parallel accounts early.

It is also worth knowing what an ED attachment does and does not do. It freezes identified proceeds of crime so they cannot be dissipated during the case; it does not, by itself, decide guilt. Anyone can verify a bank's or an intermediary's regulatory standing through the RBI and SEBI public registers before entrusting funds.

FAQ

Does this mean the people named are guilty?

No. A prosecution complaint and a provisional attachment order contain allegations, not findings of guilt; the accused are presumed innocent until proven guilty, and due process continues. The attachment freezes assets pending confirmation and trial, and the named individuals are entitled to contest both the attachment before the Adjudicating Authority and the complaint before the Special PMLA Court.

What exactly did the ED order?

Per its release, the ED provisionally attached assets worth Rs 131.13 crore (Rs 12.85 crore in bank balances and Rs 118.28 crore in immovable property) under Section 5(1) of the PMLA on 29 July 2026, and filed a prosecution complaint against nine accused persons under Sections 44 and 45 of the PMLA on 30 July 2026 in the Kotak Mahindra Bank Fraud Case.

Can the attachment be appealed?

Yes. A provisional attachment must first be confirmed by the Adjudicating Authority under the PMLA after the affected parties are heard. A confirmed attachment can then be challenged before the Appellate Tribunal under the Act, and thereafter before the High Court. The property stays attached, not forfeited, until proceedings conclude.

What is the underlying case the ED is investigating?

The ED says it acted on an FIR registered by the Anti-Corruption Bureau, Panchkula, under the Bharatiya Nyaya Sanhita, 2023, and the Prevention of Corruption Act, 1988, alleging embezzlement of Municipal Corporation, Panchkula, funds through unauthorised bank accounts. Money laundering under the PMLA is a separate offence built on that predicate allegation.

How can I check if a bank or intermediary is genuine?

Banks are listed on the Reserve Bank of India's website, and market intermediaries such as brokers and advisers are searchable on SEBI's public registers. For high-value accounts, insist on written authorisation mandates, confirm the registered mobile number and email directly with the bank, and reconcile statements against your own records regularly.

This report is based on the official ED press release dated 5 August 2026 in the Kotak Mahindra Bank Fraud Case. It was surfaced via coverage in The Hindu BusinessLine.