The Enforcement Directorate (ED) has frozen 215 bank accounts and seized ₹20 lakh in cash following searches at 12 locations across Mumbai and Ahmedabad in a money laundering investigation linked to alleged bank fraud by companies of the Tayal Group and the alleged misuse of insolvency proceedings. The agency has estimated the proceeds of crime at approximately ₹820.86 crore.

What the Searches Uncovered

The searches were conducted on 30 September 2026 by the ED's Kolkata Zonal Office-II under the Prevention of Money Laundering Act (PMLA), 2002, targeting Tayal Group promoters and directors Pravin Tayal, Saurabh Tayal, and others, as well as certain Resolution Professionals (RPs). The ₹20 lakh in cash was recovered from the residential premises of Pravin Tayal.

According to the ED, searches led to the recovery of documents relating to the incorporation and operation of shell companies, along with a large number of bank accounts in cooperative banks opened in the names of associates of the accused. Records relating to immovable properties allegedly concealed from the ED and lending banks were also identified, and fresh non-performing assets (NPAs) created by group companies were reportedly unearthed.

The Alleged Fraud Mechanism

The investigation stems from cases registered by the ED's Kolkata Zone-II in connection with alleged large-scale bank fraud involving Tayal Group companies, including K. Lifestyle & Industries Ltd., Actif Corporation Ltd., and Jaybharat Textiles & Real Estate Ltd.

The ED alleged that the group generated and availed bank funds through falsified stock statements, inflated production claims, and the unauthorised sale of hypothecated machinery. Funds were allegedly layered through shell companies and diverted into real estate assets, including Empress Mall in Nagpur, which was provisionally attached during the investigation at an estimated value of ₹483 crore, along with other immovable properties.

The Insolvency Misuse Angle

A central allegation in the ED's case is that after attachment of assets, the accused promoters and directors allegedly initiated corporate insolvency resolution process (CIRP) proceedings through shell entities under Section 7 of the Insolvency and Bankruptcy Code (IBC) — entities which the agency alleged were controlled by the accused and used as sham creditors to shield group assets from enforcement action.

The ED further alleged that the RPs — Kiran C. Shah, Vinod P. Ambavat, and Ravi Kapoor, whose premises were also searched — assisted the promoters by admitting unverified and inflated claims of related parties, thereby reducing the voting share of secured lenders. The agency alleged the RPs filed applications to set aside PMLA attachments, suppressed adverse orders before courts and tribunals, and created encumbrances that prevented the ED from taking possession of rent generated from attached properties. Rent worth several crores was allegedly continued to be received by companies floated by the accused.

The Ahmedabad Connection

A similar modus operandi was identified in a parallel investigation by the ED's Ahmedabad Zone involving Tayal Group entity Vidhant Realty Pvt Ltd. Insolvency proceedings were allegedly initiated against the company through another group entity, Kausar Textiles Pvt Ltd, to frustrate PMLA attachment proceedings.

In that case, Cubical Realty Pvt Ltd emerged as the successful resolution applicant — which the ED alleged was in violation of Section 29A of the IBC, as it was reportedly beneficially owned by members of the Tayal family, including Pravin Kumar Tayal and Navin Kumar Tayal. The agency said further investigation is ongoing.

Broader Significance

This case is notable for its alleged nexus between promoter-directors, shell company networks, and Resolution Professionals — raising questions about the integrity of insolvency proceedings that are meant to protect creditors. Notably, this is not the first time the ED has flagged attempts to weaponise the IBC's creditor-resolution framework to neutralise PMLA enforcement. The outcome of this investigation could have implications for how courts and regulators oversee the conduct of RPs in cases where PMLA attachments are already in place.