From Hyderabad to Mumbai: ED arrested Vasai town planning officer Y S Reddy in VVCMC scam

Hyderabad: The Enforcement Directorate (ED), Mumbai Zonal Office, has arrested Y. S. Reddy, Deputy Director of Town Planning, along with Anil Kumar Khanderao Pawar, IAS, former Commissioner of Vasai Virar City Municipal Corporation (VVCMC), Sitaram Gupta, ex-Corporator of Bahujan Vikas Aghadi, and Arun Gupta on Wednesday under PMLA in the money laundering investigation being conducted in the Vasai Virar illegal construction and corruption scam.

It is pertinent to note that on May 15, ED raids on the premises of Y S Reddy, Deputy Director Town Planning, VVMC in Hyderabad resulted in the agency recovering cash amounting to Rs. 8.6 Crore and diamond-studded jewellery and bullion worth Rs. 23.25 Crore being seized. Further, various incriminating documents have been seized, which throw light on a large-scale scam.

The Anti-money laundering agency initiated an investigation on the basis of multiple FIRs registered by Mira Bhayandar Police Commissionerate against builders, local henchmen, and others. The case pertains to “illegal construction of residential-cum-commercial buildings on government and private land” under the jurisdiction of “Vasai Virar City Municipal Corporation (VVCMC)” since 2009. Over a period of time, 41 illegal buildings were constructed on the land reserved for “Sewage Treatment Plant” and “Dumping Ground” as per the approved development plan of Vasai Virar City. The accused builders and developers have deceived the general public by first constructing illegal buildings on such land and subsequently selling them (the general public) by fabricating approval documents. Even with prior knowledge that these buildings were unauthorized and would eventually be demolished, the developers misled the people by selling units in these buildings, thereby committing serious fraud. 

The Bombay HC, vide its order dated 08.07.2024, ordered the demolition of all 41 buildings. Thereafter, an SLP was filed before the Supreme Court by the families residing in 41 illegal buildings, which was dismissed. The demolition of all 41 buildings was completed by VVCMC on 20.02.2025.

"The large-scale illegal construction in the area has been going on since 2009. It has been found that the key perpetrators Sitaram Gupta and Arun Gupta sold illegally 60 acres of government/private land based on forged agreement/Power of Attorney to local builders who, from 2013 to 2021, constructed 41 buildings with the close connivance of VVCMC officials/officers," said the ED in a statement.

Further, the ED investigation revealed that an organized cartel of VVCMC officers, viz. Commissioner, Deputy Director Town Planner, Junior Engineers, Architects, CAs, and Liaisoners, are operating in collusion with each other. This cartel is responsible for large-scale illegal construction in the jurisdiction of VVCMC in exchange for a huge amount of bribe. 

Commissioner VVCMC Anil Pawar, IAS, is allegedly responsible for organizing and running this cartel. Investigation revealed that, after the joining of Anil Pawar as Commissioner of VVCMC, the commission amount was fixed for giving various development permissions at the rate of Rs 20-25 per sq ft for the commissioner and Rs 10 per sq ft for Y. S. Reddy as DDTP on the total area of the project. Further, he fixed the rate of commission at the total rate of Rs 150 per sq ft for keeping a blind eye and taking no action over rampant illegal construction on government/private land and fixed the commission/bribe amount.

During the course of multiple search operations in the case, a large number of incriminating documents were seized which revealed that the accused has created a large number of entities in the name of his family members/relatives/benamidars to launder the bribe amount collected. 

All the 4 arrested accused were produced before the Special Court, PMLA, on 14.08.2025. The Court has granted ED custody for 6 days. Earlier search operations in the case led to the cash seizure of approx Rs. 10.27 Crore, diamond-studded jewellery and bullion worth Rs. 23.25 Crore, and the freezing of bank balances/shares/mutual funds/FDs worth Rs. 13.86 Crore. Further investigation is under progress.