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ED Restitutes ₹386 Crore Worth Of Assets In Karnala Bank Fraud Case To Compensate 5 Lakh Depositors

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Mumbai: In a significant development in the Rs 560 crore Karnala Nagari Sahakari Bank fraud case, the Enforcement Directorate (ED) has restituted immovable assets worth Rs 386 crore to the Competent Authority appointed under the Maharashtra Protection of Interest of Depositors (MPID) Act. The move is a major step towards compensating over five lakh depositors, many of whom are senior citizens and small investors, who lost their savings following the bank’s collapse.

The restituted assets, now slated for auction, were previously provisionally attached by the ED during its money laundering probe. According to officials, the properties located across Panvel and Raigad districts were acquired using funds siphoned off through bogus loans issued in gross violation of Reserve Bank of India (RBI) norms.

Fraud Rooted in Fake Loan Accounts

The investigation stems from a First Information Report (FIR) registered on February 17, 2020, by the Economic Offences Wing (EOW), CID, Pune. The chargesheet alleges that the bank’sKarnala Charitable Trust former chairman, Mr. Vivekanand Shankar Patil, along with other senior officials, engaged in a criminal conspiracy to defraud the cooperative bank by creating 63 fictitious loan accounts using forged documentation. The fraud, reportedly operational since 2008, facilitated the diversion of approximately Rs 560 crore into entities controlled by Patil, including the Karnala Charitable Trust and the Karnala Sports Academy.

ED investigation revealed that the proceeds of crime were channelled through 63 fictitious accounts to disguise the fraudulent transactions. These funds were later diverted into multiple bank accounts held by entities associated with Patil and his relatives. The money was allegedly used for the construction of a sports complex, educational infrastructure, and other personal investments, while being projected as legitimate assets.

Main Accused in Judicial Custody Since 2021

Vivekanand Shankar Patil, a four-time legislator from the Raigad district and a former Member of the Maharashtra Legislative Council, is a prominent figure in the state’s cooperative movement. As chairman of the Karnala Nagari Sahakari Bank, Patil allegedly played a central role in orchestrating the fraud. The ED arrested him under provisions of the Prevention of Money Laundering Act (PMLA) in 2021. Patil has remained in judicial custody since his arrest.

The immovable properties in question, including a multi-acre sports academy in Panvel and a prime land parcel in Posari, Raigad district, were attached in two phases on August 17, 2021, and October 12, 2023. A prosecution complaint in the matter was filed before the Special PMLA Court in Mumbai on August 12, 2021, and trial proceedings are currently ongoing.

Court Authorises Liquidation for Repayment

The restitution was initiated after the Reserve Bank of India-appointed liquidator filed an application under Section 8(8) of the Prevention of Money Laundering Act (PMLA), seeking permission to auction the attached properties. The ED supported the request. Acting on the application, the Special PMLA Court, in an order dated July 22, 2025, authorised the auction of the Karnala Sports Academy and a land parcel in Posari. The proceeds from the sale will be used to compensate the bank’s depositors.

At the time of its collapse, Karnala Nagari Sahakari Bank held deposits worth ₹553 crore from over five lakh customers. Given the widespread financial damage, the ED stated it moved proactively to ensure the early handover of attached assets for liquidation and compensation.

General

Thane Tragedy: Environmentalist-Lawyer Sarita Khanchandani Dies By Suicide In Ulhasnagar, Family Alleges Harassment By Shiv Sena (UBT) Leader

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Thane: In connection with the death of environmentalist-activist-lawyer Sarita Khanchandani, who allegedly died by suicide on Thursday after jumping from the seventh floor of Roma Building where she lived in Ulhasnagar, her husband Purshottam Khanchandani has leveled serious allegations against Shiv Sena (UBT) leader and his associate accusing them of harassing his wife and trying to implicate her in a fabricated case.

He claimed that the harassment drove her to suicide and demanded that the case be probed by a senior officer under judicial supervision.

Purshottam, along with other family members, addressed a press conference to present his side of the story. He said Sarita had been helping Jiya Goplani, a woman whose domestic case she was handling. After being ousted by her in-laws, Goplani had no shelter, and Sarita allowed her to live in one of her homes for six years, providing food and support.

Although the court awarded Goplani a monthly maintenance of Rs 15,000, Sarita eventually asked her to vacate the house. Goplani assured her that she was looking for a house in Badlapur and would leave within two months.

According to Purshottam, on Wednesday, Goplani called Sarita claiming she was unwell. When Sarita went to meet her around 11:45 p.m., she found nearly 20 people present. Purshottam alleged that this was a conspiracy to trap Sarita, and a video of the incident later surfaced on the social media.

Although the police were called to the spot, both Sarita and Goplani told officers they had no complaints, after which Sarita returned home.

However, Purshottam alleged that later the same night, Goplani, along with a politician and others, went to the police station and registered a case against Sarita. Shocked by the development, Sarita went to the police station on Thursday but later returned home and jumped to her death from the terrace.

He also accused the Vithalwadi police station of facilitating the conspiracy to falsely implicate her. He clarified that Goplani was not a tenant but was staying at their residence purely on humanitarian grounds.

Purshottam linked the incident to an earlier dispute, alleging that the Shiv Sena (UBT) leader and his associate had encroached upon a government toilet block. Sarita had filed a petition in the High Court against the encroachment, after which the Shiv Sena Shakha on the premises was shut down and the property handed back to the municipal corporation.

In response to Purshottam’s allegations, Jiya Gopalani refused all allegations and stated that she was his wife’s tenant and that Sarita forced her to work according to her instructions; otherwise, she would not fight her domestic case in court.

“On Wednesday, Sarita came to my home because I was not picking up her call. Sarita arrived at my home and assaulted me badly, after which I visited the police station and filed a case against her.”

DCP Sachin Gore of Ulhasnagar said “Based on Jiya Goplani’s complaint, we filed a case of trespass and assault against Sarita. In Sarita’s suicide matter, no note was found. So far, we have registered an Accidental Death Report (ADR) . We will record the statements of witnesses. Further investigation is underway, and if anyone’s role emerges, action will take accordingly.”

Sarita Khanchandani, a practicing lawyer, was known for her environmental activism and had played a significant role in getting DJs banned in Maharashtra.

She also ran the Heerali Foundation, an organization dedicated to cleaning up the Ulhas and Waldhuni rivers that flow through Ulhasnagar. She was a prominent figure in pollution activism in the city, petitioning police to act against violators and raising awareness of environmental issues affecting the rivers.

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Crime

Maloney arrested with 7.2 million worth of ganja and pistol, five others

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Mumbai Maloni Police has claimed to have arrested five accused including ganja worth Rs 72 lakhs and a country-made pistol and live cartridges. In Maloni, the police had arrested Ashiq Hussain Khan with 1 kg 60 grams of ganja. He said that he buys this drug from Nashik. After that, Santosh More of Nashik was arrested. After that, a total of four accused were arrested in this case and a case was registered against them under the NDPS Act. A car was searched in Maloni Madh in which a country-made pistol and ganja were recovered. This operation was carried out by DCP Sandeep Jadhav on the instructions of Mumbai Police Commissioner Devin Bharti. The police is investigating the matter further.

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Maharashtra

The application date for Mumbai students’ education scholarship should be extended till September 1: Abu Asim Azmi

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Maharashtra Samajwadi Party leader and MLA Abu Asim Azmi has written a letter to the state Chief Minister Devendra Fadnavis and the Minister of Minority Affairs demanding extension of the application date for scholarship 2025-26 for students pursuing higher education abroad through the Minority Department and Ministry of Minority Affairs. The last date is August 28, 2025. Azmi has demanded an extension till September 1. He said that there is a three-day holiday in Maharashtra in view of Ganpati festival and other festivals, so students will have difficulty in submitting applications. Therefore, keeping in mind the convenience of the students, the date for submission of applications should be extended till September 1 and the government should take a positive decision on this.

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