Hawala

Hawala is the informal, trust-based money transfer system that forms the financial circulatory system of the Mumbai underworld in this book. It is the invisible mechanism that connects the smuggling empires of the 1940s to the drug empires of the 1990s, and it is the key vulnerability that law enforcement and the women who navigate this world seek to exploit. The book presents hawala not as a mere criminal technique but as the very architecture of the illicit economy, a parallel financial universe that moves money across borders without a single physical transfer, making it the lifeblood of the gangs and the primary target for those who would bring them down.

The Invisible Financial Architecture

Hawala operates as a system of trust-based transfers that bypasses all formal banking channels, making it nearly impossible to trace. The book reveals its centrality to the underworld's operations when a police officer explains to Ashraf Khan, the widow of the gangster Mehmood Khan, that Dawood Ibrahim's money is channelled by hawala from dance bars, nightclubs, and film productions. The officer's advice is direct: find a way to stop the flow of money from these sources, and Dawood is sure to feel the pinch. This moment exposes the fundamental vulnerability of the entire criminal enterprise—its dependence on a financial system that, while invisible, can be targeted at its sources. The same officer later admits the system's power when he tells Ashraf that tracing the money is not easy because it is done through hawala, a confession that underscores how the system's very design is its greatest protection. The system's reach extends far beyond Mumbai, as the officer notes that most arms and fake currency come into India from Pakistan via the Kathmandu border, with well-connected intermediaries like Ram Singh Bahadur knowing exactly when and where consignments will arrive.

The Historical Roots of Illicit Finance

The hawala system in the book is rooted in the long history of smuggling that built Mumbai's underworld. The narrative traces this lineage back to the 1940s, when Haji Mastan, originally from Chennai, came to Mumbai in 1934 and started as a mechanic before moving to the docks as a coolie in 1944. His job unloading boxes from ships coming from Aden, Dubai, and Hong Kong eventually led him to make millions from smuggling gold, silver ingots, and electronic goods, forming one of the most formidable gangs in Mumbai alongside Karim Lala and Vardharajan Mudaliar. This early smuggling economy, built on the movement of physical goods, created the wealth and connections that the hawala system would later move invisibly. The book also shows that the informal economy was not limited to the underworld elite. Jenabai Daaruwali, before her rise to power, worked as a broker for smuggled grain in the 1940s, procuring foodgrain in bulk from wholesalers at Daana Bazaar on commission and selling it to dealers for a higher price. Her illegal trading in grain, punishable by law, was a precursor to the larger illicit financial networks that would come to define the city's criminal economy.

The Drug Empire's Cash Flow

The hawala system's power is most vividly illustrated in the drug empire built by Mahalaxmi Papamani in the Sion-Koliwada slum. Papamani's business model was simple and devastatingly effective: she would buy five kilogrammes of heroin for between one and three lakh rupees, convert ten grams into forty pudis, and sell each pudi at twenty-five rupees, making a profit of around three lakh rupees per month—about the salary of a CEO of a company in Mumbai. Her operation grew so large that she was forced to stock liquid cash in several hutments across the slum, with crores of rupees always at her disposal. She kept thirty to forty lakh rupees in cash tucked inside her sari and fearlessly walked the narrow alleys of her slum area, distributing money to poor Tamilians in return for their services. This cash-based empire, built on the sale of heroin in small packets, generated the vast sums that would eventually need to be laundered through systems like hawala to enter the legitimate economy.

The Corporate Don Wife and Money Laundering

The book shows how hawala and illicit wealth flow into legitimate enterprises through figures like Sujata Nikhalje, the wife of the gangster Chhota Rajan. In the late 1990s, with real estate prices soaring across Mumbai, Sujata began her own construction company, Khushi Developers Private Ltd, named after her youngest daughter. She employed a powerful team of chartered accountants to handle the company's finances and prepared a strategy to transform Tilak Nagar into a plush suburban locality, pulling down old buildings and replacing them with sprawling malls, high-rises, and office complexes. Throughout, she kept Rajan informed of her meetings via telephone calls, and following his advice, she involved his men to ensure she had her way. Rajan's goons would terrorise builders through extortion and land-grabbing, creating a fear psychosis that allowed Sujata to run her business smoothly. The police, who had been tapping Sujata's phone lines, learned that her conversations with Rajan would often drift into the acquisition of land and deals, eventually closing in on her when a builder from a society in Chembur filed a complaint. This intersection of criminal wealth, legitimate business, and police surveillance reveals the hawala system's ultimate purpose: converting the invisible profits of crime into visible, legitimate assets.

The System's Human Cost

The hawala system's efficiency in moving money is matched only by the brutality it funds. The book connects the financial flows to the violence that sustains them, from the murder of Sapna, who was stabbed over twenty-two times in her breasts and vagina by four men sent by Dawood and Shakeel, to the killing of Mehmood Khan in a fake encounter at Santa Cruz airport, where his widow Ashraf was told he had been shot dead while carrying a gun he could not possibly have had. The system also reaches into the lives of women like Madhu, a sixteen-year-old sold into prostitution and raped repeatedly by Jaggan seth, and Neeta Naik, murdered by her own husband Ashwin Naik after he acquired photographs of her with Laxmi Zhiman. The book shows that hawala is not an abstract financial concept but a system that enables the entire criminal ecosystem, from the smuggling of gold to the trafficking of women, and that its invisible flows are paid for in blood. The system's reach even extends to the highest levels of the underworld, as seen in the Lisbon arrest of Abu Salem and Monica Bedi, where the couple's extradition to India was the culmination of years of investigation into the financial and criminal networks that hawala made possible.