TaxTMI 
TaxTMI 
2022 (11) TMI 927
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....ng the pendency of the investigation. In this way when Supplementary Complaint against him was filed, bail applications of both i.e. Pravin Raut(A3) and Sanjay Raut(A5) were pending. Basic case of the Directorate of Enforcement (for short 'ED') in both i.e. Main and Supplementary Complaints is that, Pravin Raut (A3) was the Director of GACPL, who was responsible for selling free sale component, generated Proceeds of Crime (in short 'POC') Rs.95 Cr./ Rs.100 Cr./ Rs.112 Cr. and subsequently laundered it. The trail of the said money came to Sanjay Raut(A5) and his wife. This is the basic case pleaded in the Main and Supplementary Complaint. Therefore facts, circumstances of transaction and reasons required for discussion of bail application (Exh.8) of Pravin Raut(A5) are similar in respect of bail application Sanjay Raut(A5). In order to avoid multiplicity and length of separate orders, this Court finds it necessary to decide both applications by way of this common order; but with separate discussions wherein Bail Application (Exh.8) of Pravin Raut(A3) will be discussed first and thereafter, that of Sanjay Raut(A5). 2. Applicant Pravin Madhukar Raut in application (....
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....ublic Prosecutor opposes the application, the Court has to be satisfied that there are reasonable grounds for believing that accused is/are not guilty of such offence and that he/they is/are not likely to commit any offence while on bail. Therefore, in the background of arguments in both bail applications, it is inevitable to frame following points as per language of Sec.45(1)(i)(ii) of the PML Act for determination. I am recording following findings thereon for the reasons discussed below :­ POINTS FINDINGS 1. On opposing the applications by the Ld. A.S.G and Ld. S.P.P., whether the applicants (A3 and A5) have satisfied that, there are reasonable grounds for believing that they are not guilty of such offence and that, they are not likely to commit any offence while on bail, as per Sec.45(1)(i) (ii) of the PML Act? Yes. 2. What Order ? As per final order. REASONS ALL POINTS. 7. As noted above, first of all Bail Application (Exh.8) of Pravin Raut(A3) is being discussed and after conclusion thereof, Bail Application No.582 of 2022 will be discussed. I. BAIL APPLICATION (EXH.8) OF PRAVIN RAUT (A3). CASE OF ENFORCEMENT DIRECTORATE. 8. EOW, Mumbai lo....
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....FSI calculation towards the portion of developed area to be handed over to MHADA by the developer was based on the area of 1,65,805.20 sq.mt. Hence, there was manipulation of FSI which had resulted in undue benefit to the Developer. It was also found that by virtue of three years delay between the signing of the agreement and completion of the actual measurement resulted in escalation of property prices considerably which caused undue benefits to the Developer. g. Hence, on 15.06.2011 MHADA issued notice to the Developer seeking revision of the developed area to be handed over to MHADA. The developer replied the said notice on 22.06.2011, accepted and agreed that without the prior written consent of the other party (MHADA) the developer had no right to assign the rights and obligations under the said Tripartite Agreement to any third party and also confirmed that they had not done so. h. Thereafter Deed of Confirmation and Modification was executed on 09.11.2011 between the parties. On the basis thereof and a letter dt.26.07.2011 issued by then VP and CEO of MHADA, the Developer disposed off various parcels of MHADA land for construction of free sale component to ....
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....kesh Kumar Wadhawan (A1) and Sarang Wadhawan (A2) in various activities relating to the project. He (A3) has received huge amount around Rs.95 Crore from HDIL during 2008­2010 without any valid reason. According to him (A3) Rs.50 Crore out of Rs.95 Crore he received against the sale of Sweat equity and remaining Rs.45 Crore from land deal at Palghar. It was revealed that, 25% Sweat Equity (12500 equity shares) of M/s GACPL was not a Sweat Equity, but it was an alibi created by Pravin Raut (A3) and Wadhawans (A1 and A2) to create facade of legitimacy and this money meant for construction of flats for displaced tenants and home buyers, were illegally transferred. Such allotment of 25 % Sweat Equity (12500 equity) shares has not been reflected in the books of account of the company. In this way Pravin Raut (A3) due to his involvement in obtaining the approval for sale of FSI from MHADA laundered POC approximately Rs.1040 Crore which he generated from the said activity. d. GACPL sold FSI to various third party developers for Rs.1034 Crore and transferred the said amount to the parent company i.e. HDIL and also sister concern for their business purpose. Money trail revealed....
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....wned by MHADA, referred in the complaint having total area around 40 Acres, MHADA had constructed 808 Ground floor structures consisting of "Patra Chawls" having each tenements ad­meausring 220 sq. feet (Siddharth Nagar). The 672 tenants thereof organized themselves in a society known as 'Goregaon Siddharath Nagar Sahakari Grihanirman Sanstha Ltd.' (for short 'the society'). c. The said society on 09.09.1986 entered into an agreement with Lokhandwala Society and Development Company (Lokhandwala Developers) to develop a gross land of 13.18 Acres of the said land. d. In 1991-1992 Lokhandwala Developers constructed 3 buildings comprising of Ground plus 4 floor upper storeys. On 23.11.1992 the society terminated agreement with Lokhandwala Developers as the said developers had offered accommodation ad­measuring 325 sq. feet of Carpet Area as opposed to 365 sq. feet for each occupant. e. Lokhandwala Developers instituted Suit No.4476/1985 before the Hon'ble Bombay High Court. f. The Accused No.3 with his old acquaintance Mr. Nippun Thakkar had executed Projects in partnership with him in Nalasopara. g. Some projects....
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....h MHADA and obtaining approval from time to time. q. Accused No.3 was already granted bail by the Ld. Sessions Court on 21.03.2020 in respect of EOW FIR which was filed in 2018, wherein the Court clearly observed that (i) from the amount misappropriated out of redevelopment work, no amount is deposited in the bank account of the accused No.3, (ii) the applicant has not signed any agreement with any developer, (iii) since 2010 the applicant has not participated any transaction and (iv) the applicant is not signatory of any bank transaction. r. There are no grounds for believing that, the accused No.3 is guilty of offence of money laundering as there is no material evidence against him. s. The prosecution complaint fails to disclose the commission of Predicate Offence. Whatever alleged in the complaint discloses the occurrence of civil dispute which is not a Predicate Offence. t. The accused No.3 had very limited period in GACPL. u. At the relevant time his limited tenure in GACPL was related to obtain individual letters from the tenants and agreements relating to permanent alternate accommodation, eviction of tenants, field work and proce....
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....l activity, Ld. SPP Mr. Venegavkar referred clause (v) of page NO.6 of the complaint pointing out the facts revealed in searches and surveys during investigation. He further submitted that the developer first of all collected bookings for the project MEADOWS by selling the FSI to third party developers and never constructed anything in the land proposed for MHADA occupants. With thse and various other factors alleged in the complaint Ld. SPP Mr. Venegavkar submitted that, Rs.1039.79 Crore POC was raised. The Applicant(A3) was instrumental and played an important role in generating and laundering POC and ultimately received Rs.112 Crore from the POC, transferred some part thereof in the account of Mrs. Varsha Raut and Sanjay Raut(A5) and also both of them further invested the same by purchasing plots/lands at Kihim, Alibaug. In this way he committed offence of money laundering and hence, not entitled to bail. I carefully examined this argument. 17. Whole attack of ED and their arguments advanced by Ld. ASG Mr. Anil Singh is that, there is money­laundering. In an offence of money laundering, due to seriousness thereof, "JAIL IS RULE AND BAIL IS AN EXCEPTION". Hence, thoroug....
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....(1)(u) of the 2002 Act - so long as the whole or some portion of the property has been derived or obtained by any person "as a result of" criminal activity relating to the stated scheduled offence. To be proceeds of crime, therefore, the property must be derived or obtained, directly or indirectly, "as a result of" criminal activity relating to a scheduled offence. To put it differently, the vehicle used in commission of scheduled offence may be attached as property in the concerned case (crime), it may still not be proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act. Similarly, possession of unaccounted property acquired by legal means may be actionable for tax violation and yet, will not be regarded as proceeds of crime unless the concerned tax legislation prescribes such violation as an offence and such offence is included in the Schedule of the 2002 Act. For being regarded as proceeds of crime, the property associated with the scheduled offence must have been derived or obtained by a person "as a result of" criminal activity relating to the concerned scheduled offence. This distinction must be borne in mind while reckoning any property referred to in the sch....
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....nder the 2002 Act cannot resort to action against any person for money­laundering on an assumption that the property recovered by them must be proceeds of crime and that a scheduled offence has been committed, unless the same is registered with the jurisdictional police or pending inquiry by way of complaint before the competent forum. For, the expression "derived or obtained" is indicative of criminal activity relating to a scheduled offence already accomplished. Similarly, in the event the person named in the criminal activity relating to a scheduled offence is finally absolved by a Court of competent jurisdiction owing to an order of discharge, acquittal or because of quashing of the criminal case (scheduled offence) against him/her, there can be no action for money­laundering against such a person or person claiming through him in relation to the property linked to the stated scheduled offence. This interpretation alone can be countenanced on the basis of the provisions of the 2002 Act, in particular Section 2(1)(u) read with Section 3. Taking any other view would be rewriting of these provisions and disregarding the express language of definition clause "proceeds of cr....
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.... from the criminal activity relating to offence under Ss.420 and 120B IPC and he was dealing with the same having full knowledge thereof that it was tainted POC and further projected the same as 'untainted'. In order to make prima­facie examination as to whether there was any criminal activity relating to offences of cheating and criminal conspiracy, the test therefore would be, whether the Applicant (A3) had a dishonest or fraudulent intention at the time of entering into the Tripartite Agreement dt.10.04.2008 on behalf of GACPL or while addressing the letter dt.09.06.2011 on behalf of GACPL. 20. In other words it has to be examined prima­facie to find out, (a) Whether the applicant(A3) with his wise brain took calculated steps right from the beginning, initially hatched criminal conspiracy with Mr. Nippun Thakkar and subsequently with co­accused persons, and then entered into a Tripartite Agreement on 10.04.2008 with inducement and dishonest intention only and only to defraud and cheat 672 tenants as well as MHADA and induced them with such intention, executed the agreement for cheating them forever. Dishonest intention right from the inception of such indu....
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....th the basic requirements to apply stringent twin conditions under Sec.45, the PML Act. Hence, thorough examination is necessary that too without any mini­trial to find out whether the complaint and materials on record are qualified. 23. Admittedly, there was no FIR for the allegations and circumstances of transactions happened in 2006­07 till the date of resignation of Pravin Raut (A3). FIR No.22/2018 was lodged much subsequently on 13.03.2018. Definition under Sec.3 of the PML Act clearly states that money­laundering is inextricably linked to the Predicate Offence. So, it is bounden duty and obligatory on the Court to sit in the arm­chair of the contemporary period and examine those facts associated to it. This exercise is unavoidable and inevitable, but necessary to find out whether there was any criminal activity relating to the Predicate Offence for which no FIR was registered at that time. At the cost of repetition it has to be noted that, this exercise is necessary and inevitable to find out whether there was any inducement and cheating at the inception when there was no such FIR till 2013 and even thereafter till 13.03.2018. MATERIALS WHETHER INDICATE ....
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....90 of 2010 dt.02.12.2010, (ii) Writ Petition No.851 of 2010 dt.08.04.2010, (iii) Notice of Motion No.523 of 2010 dt.01.10.2010 and (iv) Notice of Motion No.547 and 548 of 2010 in Writ Petition No.1478 of 2009 dt.11.10.2010. The Hon'ble High Court dismissed all these proceedings specifically noting as follows :­ a. the work of development has already progressed. b. out of the 672 occupants, the present developer claims to have consents of 571 occupants. c. documents have been registered with 472 of the occupants. The structure of 412 occupants have already been demolished and they have either shifted to transit accommodation or are in receipt of payment in lieu thereof. The Hon'ble High Court further held that it would be manifestly against the interest of the occupants whose structures have been demolished and who are now awaiting the completion of the schemes. Judicial note requires to be taken that the process of obtaining consent from the occupants is a tedious and time consuming task for any Developer including the instant. In this way after noting the remarkable progress of development and justifying the said process, the Hon&....
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....nt to 96% have been demolished. (iii) An amount approximately of Rs.113.23 Crores has been expended towards the project; and (iv) The work of construction has substantially progressed." Even the order of the Hon'ble Bombay High Court was challenged before the Hon'ble Supreme Court and same was pending before the Hon'ble Supreme Court till 06.07.2012. However, on 06.07.2012 the Hon'ble Supreme Court dismissed the same and this fact is evident from the copy of order dt.06.07.2012 in Special Leave to Appeal (Civil)CC 10282/2012. 29. Volume VI page 218 with PC shows that MHADA approved layout on 19.05.2009. Eviction orders by MHADA were served upon the occupants on 18.12.2010. In the meantime the said land was surveyed and Modification Deed was executed. Prima­facie it is crystal clear that, till 06.07.2012 (the Hon'ble Supreme Court order) though the development project was dragged in the battle of litigations, yet simultaneously it was progressing and the same was acknowledged by the Hon'ble Bombay High Court. Can all these activities and the litigations cropped up as such, be termed as criminal activities relating to a Scheduled Of....
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....ant(A3) pointed out to the MHADA how substantial time was consumed in various litigations before the Hon'ble Bombay High Court in respect of Resolution and Tripartite Agreement. MHADA was further pointed out the time consumed and expenses incurred for vacating the land. It was also requested for appointing an Officer from MHADA for signing Agreements on its behalf. Responding the said request as such made vide the letter dt.09.06.2011, MHADA vide their letter dt.26.07.2011, clearly conveyed as follows, "3. To appoint an Officer who can sign Sale Agreement on behalf of MHADA for the Free Sale Component in the share of the Developer. However, it is suggested that by signing of every Agreement, MHADA may create a huge liability of free sale component of the developer upon MHADA. For this reason, free sale area should be allowed to be sold by the developer on his own responsibility with the condition that saleable area should not exceed the approved share of the Developer in terms of FSI or constructed flats and construction should be carried out in proportion for MHADA, Society and the Developer as approved by MHADA. During the discussion you have agreed that ins....
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....per permission granted vide letter dt.27.07.2011. MHADA's internal note dt.23.09.2011 states as follows, "... Considering all other clauses as per the observations of the Hon. VP & CEO/A, draft Deed of Confirmation and Modification has been prepared and kept forthwith. CO/MB is requested to kindly get the same verified as per the approval granted by the Hon. VP&CEO/A and thereafter steps to finalise/execute the same may be taken. After execution, the deed will have to be submitted to the Authority for ex facto approval." MHADA's internal note dt.01.11.2011 while approving Modification Deed states as under, "After discussion the Hon. VP&CEO/A has accorded its approval for the clauses to be included and accordingly the draft has been finalized. Along with the draft Modification, certain annexures are required to be annexed which have been prepared considering the subsequent changes in the area of the plot etc. This draft is in order...." 36. On 09.11.2011 the Modification Deed was executed between MHADA, the Society and GACPL. The applicant(A3) signed the same in the capacity of Director of GACPL. By virtue of Clause 11 of the Modification Dee....
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....ments prima­facie reflects that the applicant(A3) had never entered into or participated directly or indirectly any discussions relating to Sale of Development Rights on the said land to third party developers. On the contrary the record clearly shows that and even it is the case of ED that, the third party developers entered into Development Agreement for Siddharth Nagar Project at the instance of Rakesh Kumar Wadhawan (A1) and Sarang Wadhawan(A2). Statements of various witnesses recorded under Sec.50(2) and (3) of the PML Act prima­facie corroborate that the applicant(A3) was never privy to the discussions that transpired between the third party developers, Rakesh Kumar Wadhawan(A1) and Sarang Wadhawan (A2). All such discussions were fronted entirely by Accused No.1 and 2. 38. It is also clear that after applicant's resignation as a Director from GACPL (dt.18.11.2013), the applicant(A3) was not involved in the management or affairs of GACPL. Even the case of ED speaks the same that, whatever POC generated, it was during 2008 to 2011. Admittedly, the first part of battle of litigations continued till the Hon'ble Supreme Court dismissed SLP II No.10282 of 2012 on....
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....note of the stand previously taken by MHADA. All documents with the Prosecution Complaint indicate that previously MHADA had taken stand that the purported wrong doings have been committed by Rakesh Kumar Wadhawan (A1), Sarang Wadhawan (A2) and their HDIL. Ld. Sr. Counsel Mr. Aabad Pond submitted an order passed by the Hon'ble Bombay High Court restraining HDIL from disposing of any of its immovable properties/assets, except in ordinary course of business. The said order states as follows, "HDIL shall file an Affidavit setting out its immovable properties/ assets (encumbered and unencumbered) and a copy of the same shall be handed over to the Advocates for the parties on or before 26th April, 2018. The said assets shall not be disposed of by HDIL except in usual course of business." Ld. Sr. Counsel Mr. Aabad Ponda further pointed out that HDIL preferred Notice of Motion (LODG) No.1279 of 2018 and sought clarification of the above referred order. The Hon'ble High Court by order dt.06.08.2018 disposed off the same noting HDIL's role in the execution of Development Agreements with third party developers as follows, "8. The plaintiff's filed the abo....
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....ess of making agreements with third party developers and selling the free sale component? At the same time no prima­facie evidence is required to hold that the applicant had absolutely no role in all such transactions and earnings therefrom. Apart from this, judicial note has to be taken that in the said proceeding before the Hon'ble High Court, MHADA was the party and accepted this situation. Nowhere at that time MHADA had contended a word that the Applicant(A3) had cheated them and 672 occupants of Patra Chawl. Sarang Wadhawan (A2) had filed affidavit in the said matter on 08.02.2017 and made a sworn statement as referred above. Thereafter, vide order dt.24.04.2018 MHADA's contention was recorded wherein it has stated "HDIL, which is holding company of GACPL, is responsible for misdeeds". Sworn statements made by Sarang Wadhawan (A2), findings given by the Hon'ble High Court on the basis thereof and conduct of MHADA make it abundantly clear as follows, a. Even MHADA believed that after execution of Tripartite Agreement, substantial progress took place in Siddharth Nagar Project. b. Conduct of MHADA prima­facie indicates that it intentionally ....
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....iscussion referred above clearly demonstrates that, it was a long battle of Civil disputes which delayed the project and parties had approached proper and competent forum for the same; and offences under Sec.420, 120B IPC do not attract as there is prima­facie nothing to show that, POC were generated by accused No.3 from the criminal activity relating to the Predicate Offence. When there is no offence of cheating and criminal conspiracy i.e. Predicate Offence and any criminal activity relating to it, there cannot be a Proceeds Of Crime. When there are no POC, question of arresting the applicant(A3) under Sec.19 of the PML Act does not arise nor the rigors of stringent twin conditions under Sec.45(1) of the PML Act come in the way for deciding his bail application. In order to arrest any person under Sec.19 of the PML Act the qualification is 'reason to believe that such person has been guilty of an offence punishable under the PML Act'. This basic qualification is missing in the instant case for arresting the Applicant(A3). 44. What is prima­facie evident from the materials on record and statements recorded under Sec.50(2) and (3) of the PML Act is that, the appl....
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....No.1,2 and HDIL to maintain status­quo in respect of proposed construction. However, the Hon'ble High Court vide Order dt.20.02.2017 permitted accused No.1 and 2 with construction of project. The Hon'ble High Court by an Order dt.20.02.2017 recorded certain representations made by accused No.1 and 2, whereby both of them undertook to comply with all the requirements of MHADA and Municipal Corporation to ensure that no stop work notice is issued. Also, it was agreed that, the Agreement and Contracts entered into with Contractors by defendants should be shared with plaintiff therein by defendants No.1 and 2 (A1 and A2). Accused No. 1 and 2 undertook to ensure that there will be no default by them in completing the buildings agreed to be handed over to MHADA. It was agreed that, there will be no interference in appointment of any Contractor / Consultant and defendants No.1 and 2 shall have full liberty and freedom to appoint the Contractor. 47. The Hon'ble High Court by an Order dt.14.03.2018 directed accused No.1 and 2 and their HDIL to disclose (a) all their assets, movable and immovable, (b) all their bank accounts and (c) Income Tax Returns. This Court is theref....
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....e High Court disposed of the same by noting HDIL's role in the execution of Development Agreements with Third Party Developers as follows, "8. The plaintiff's filed the above Suits before this Court impugning the termination notice dated 12th January, 2018. At the ad­interim stage, the Senior Advocates appearing for the Plaintiffs in the above Suits submitted that MHADA cannot terminate the Agreement with GACPL since the same will cause grave harm, loss and damage to the Plaintiffs and MHADA. It was submitted on behalf of MHADA, that GACPL was not entitled in law to enter into any such Agreements with the Plaintiffs and the termination notice was valid. However, the Plaintiffs in the above Suits as well as MHADA agreed, that in view of the undertakings given by Shri Wadhawan in the Meadows Suit, HDIL, which is a holding Company of GACPL, is responsible for the misdeeds of GACPL." 50. Wadhawans were holding maximum shares of GACPL which cannot be ignored. Yet, they were not even arrested and ED has availed pick and choose strategy while arresting Pravin Raut(A3) and Sanjay Raut (A5). PC as well as supplementary complaint have not a whisper of any of above-ref....
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....ng (A1 and A2) entered into development agreements with various third party developers and generated the FSI sale proceeds. Further, scrutiny of bank accounts referred in the PC reveals that the sale proceeds of FSI were transferred to HDIL and its group companies. There is nothing to show that the Applicant(A3) has received any amount from the alleged FSI sale proceeds. The tables referred in the PC nowhere reflect Applicant's (A3) name or any bank account in relation to whether he has received any amount from the customer, third party developers or any amount has been transferred to him otherwise. 53. On the contrary ED's own case which it (ED) had put before the Adjudicating Authority vide OC 1396 of 2021 is that, Pravin Raut (A3) received Rs.95 Crore from Outstanding Loan which was illegally availed by the HDIL from Punjab and Maharashtra Cooperative Bank Ltd. (PMC). Their own contention of ED as such prima-facie demolishes their case alleged in the Prosecution Complaint that, Rs.95 Crore Pravin Raut (A3) had generated and placed by illegal sale of free component FSI. These self contradictory contentions of ED, clearly indicate that no evidence is required to prima&s....
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....easonable doubt. 56. Quantum of POC claimed by ED in paragraph 11 at page 38 of the Main PC, it is alleged as follows, "11. Quantum of POC : GuruAshish Construction Pvt. Ltd has illegally sold the FSI to third party developers and raised Rs.1048.96 Crore. Out of this amount Rs.147.17 Crore has been paid to Municipal Corporation of Greater Mumbai. Further GuruAshish Construction Pvt. Ltd. through HDIL launched a project in the year 2010 namely MEADOWS at Patra Chawl, Goregaon and against bookings from 458 home buyers an amount of Rs.138 Crore were collected. Thus, for illegal sale of FSI the accused has generated total amount of Rs.1039.79 Crore. Accordingly, approx. Rs. 1039.79 Crore were received in the bank account of GuruAshish, HDIL and its group companies during the year 2010­14. Some part of these amounts were utilised in developing the project which remains incomplete. Whereas most of the funds were siphoned off to various accounts. The Company had availed Terms loans from Union Bank of India round Rs.100 Crore by way of Non­Convertible Debentures and around Rs.215 Crore from IL&FS Ltd. Some part of these amount were utilised in developing the pr....
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....nd fancies. It was already discussed in detail how the Hon'ble High Court recorded the conclusive findings holding the same. Even Affidavit of Sarang (A2) filed in the Hon'ble High Court in one of such proceedings contains his sworn statement admitting everything as referred above. Even MHADA who is now making hue and cry to hush up its own wrongs by filing FIR No.22 of 2018, had also clearly consented all this before the Court of Law. What more is required for prima­facie holding that Pravin Raut(A3) has absolutely no role or whatsoever concern with such activities of Rakesh(A1), Sarang(A2), their HDIL and also GACPL. So how Pravin Raut(A3) can be prima-facie held as 'Generator and Launderer' of money (POC) Rs.95 Crore/Rs.100 Crore/Rs.112 Crore/Rs.1039.79 Crore? 58. Another aspect requires consideration. In both prosecution complaints ED has alleged that, Pravin Raut(A3) is generator of POC and recipient of Rs.95 Cr./Rs.100 Cr./Rs.112 Cr. thereof. Some out of it, he (A3) further transferred to his wife and the wife of Sanjay Raut(A5). It is a fact that the ED on 31.12.2020 in relation to separate ECIR/MBZO­I/09/2019 took Order No.16 of 2020 i.e. for Prov....
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....Authority ought not to be implemented till the question of law involved in the Writ Petition is finally decided by the Hon'ble Division Bench of the Hon'ble Delhi High Court. Ld. Sr. Counsel Mr. Aabad Ponda further pointed out that the Order dt.14.12.2021 passed by the MUM/Adjudicating Authority has been challenged before the Hon'ble PMLA Appellate Tribunal, New Delhi vide FPA/PMLA/2022 and the same is pending. 60. All this prima­facie glaringly demonstrates how the ED had taken altogether different self­contradictory rather self­destructive stands for claiming the same POC Rs.95 Crore. At the cost of repetition it has to be noted that, the same amount of Rs.95 Crore, ED has been alleging as POC for two altogether different ECIRs. On one hand in ECIR 2019, ED's case in the OC 1396 of 2021 is that Rs.95 Crore received by the Applicant(A3) forms a part of the outstanding loan which was taken by HDIL from the PMC Bank. On the other hand, ED has taken exact self­contradictory stand in the present PC making allegations against the Applicant(A3) by contending the same Rs.95 Crore being the alleged FSI Sale Proceeds, which is not established prima­fa....
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....disbelieved. If ED wants to rely on Rs.95 Crore POC alleged in ECIR 2019 being true, then whatever contended by them in the present ECIR/MBZO­I/80/2021 is presumed to be false and should be disbelieved. In this way prima­facie it is evident that, ED has blown hot and cold. All this is nothing but a Classic example of "Approbate and Reprobate", which cannot be acknowledged at law. One cannot approbate and reprobate and blow hot and cold. If someone does so and Court upholds the same, that will amount putting premium on such approbate and reprobate attitude. Certainly Court cannot do as such. 62. Next aspect which requires consideration is that, after giving details of money trail in the prosecution complaint, pursuant to the Bail Application (Exh.8), ED filed its Reply(Exh.8A) and referred various new details of alleged money trail, which were basically not given in the PC. For that ED has given a table on page No.13 of their say/reply (Exh.8A). The said table refers certain transactions from three entities - Bhoomi Shashwat Estate Pvt. Ltd., Ekta Everglade Homes and Kiyana Ventures LLP. Ld. Sr. Counsel Mr. Aabad Ponda in his oral as well as written submissions pointed ou....
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.... understand this aspect with more clarity Ld. Sr. Counsel Mr. Aabad Ponda pointed out and placed reliance on the table which accused No.3 has submitted in his rejoinder (Exh.8C). There cannot be any hesitation to reproduce the same as it will help to discover the truth which is the ultimate goal of the criminal trial/proceedings. Nor the Court can overlook or ignore the same when specifically pointed out in the written submissions. Therefore, the said table is being reproduced as it is below, SR.NO. PARTY NAME DATE AMOUNT (IN INR) CORRESPONDING SERIAL NO/PAGE NUMBER IN PC CORRESPONDING BENEFICIARY AS PER THE PC 1. Bhoomi Shashwat Estate Pvt Ltd 15.03.2010 1 Crore Serial No. 6 / Page 29 TRF TO SAPPHIRE PMC 1024 2. 18.03.2010 2 Crore Serial No. 7 / Page 29 TRF TO SAPPHIRE PMC 1024 3. 22.03.2010 1 Crore Serial No. 8 / Page 29 TRF TO SAPPHIRE PMC 1024 4. 07.09.2010 2 Crore Serial No. 9 / Page 29 TRF TO SAPPHIRE PMC 1024 5. 24.10.2009 5 Crore Not mentioned in the Prosecution Complaint 6. 03.11.2009 2 Crore Serial No. 14 / Page 29 TRF TO HDIL IDBI & VENDORS 7. 03.11.2009 2....
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....Applicant(A3) was being heard on the basis of specific role PC attributed to him. Hearing of this bail application was going on from June, 2022. In the meantime ED arrested Sanjay Raut(A5) on 01.08.2022. Investigation in respect of Supplementary Complaint against him (A5) was allegedly going on. PC against the Applicant(A3) was filed on 07.04.2022. In this way, in the meantime prior to filing of Supplementary Complaint against Sanjay Raut(A5), the present Applicant(A3) had disclosed his defence by way of two volumes of this bail application, detailed written submissions (Exh.8B and Exh.8E). Therefore, filing of Supplementary Complaint deviating earlier stand taken in the Main PC by ED attributing main role to Sanjay Raut(A5) speaks volumes. 65. The basic case of ED in the Main PC was that it is the Applicant(A3) who generated POC and received Rs.95 Crore/Rs.100 Crore/Rs.112 Crore out of Rs.1039.79 Crore and further transferred a very meager of Rs.1.06 Crore to his wife and then to the wife of Sanjay Raut(A5). In this background Supplementary Complaint against Sanjay Raut(A5) came with an altogether new invention that it was not the Applicant(A3), but Sanjay Raut(A5) is the main ....
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....n 13.8 Acres. After the entry of Mr. Sanjay Raut(A5) the scope of the project increased to 47 Acres. The role played by Mr. Sanjay Raut(A5) was crucial in granting the Siddharth Nagar Project to GACPL. He introduced Pravin Raut (A3) as his front in GACPL at 25% share without any investment in the company. g. Mr. Pravin Raut(A3) was a proxy and confidante of Mr. Sanjay Raut(A5). Due to the understanding between Accused No.1,2 and 5, the Applicant(A3) was inducted in GACPL and was authorised to liaise with MHADA on behalf of GACPL. Mr. Pravin Raut (A3) was a close a friend of Mr. Sanjay Raut(A5) and was authorised to correspond with MHADA and other local authorities. Mr. Pravin Raut (A3) obtained favourable approvals from MHADA and was able to sell FSI to developers, due to his proximity with Mr. Sanjay Raut(A5). h. Cash worth INR 13.6 Crores was withdrawn from the account of accused No.4 by accused No.1 and 2. Mr. Sanjay Raut has been connected with the purported proceeds of crime by stating that, "Sanjay Raut has acquired many assets during the period the POC was siphoned off and also cash amount has been used by Sanjay Raut and for acquiring some of these assets ....
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....g (A2) and their HDIL solely responsible for generating POC and laundering it. Not only this but, I have already discussed in detail how the Hon'ble High Court took the note of this fact and held A1, A2 and HDIL responsible for the misdeeds in respect of GACPL. I have also noted the stand taken by MHADA everywhere consenting and admitting this situation. I have also noted how even MHADA has not pointed any finger of objection towards the Applicant(A3) or even Sanjay Raut(A5) at the relevant time right from the beginning i.e. from 2006­07 till before resignation of Applicant(A3) in 2013 and thereafter, till 2018 (even after registration of FIR No.22 of 2018) before the Hon'ble High Court in various proceedings. Records further clearly show that even after termination of Tripartite Agreement and Modification Deed, MHADA went on negotiating with Rakesh(A1), Sarang(A2) and HDIL and also accepted the verdicts of the Hon'ble High Court wherein Sarang(A2) had filed Affidavit making a sworn statement how he, Rakesh (A1) and HDIL had executed 12 agreements with third party developers for the sale of FSI. 69. It has to be noted that, contention of ED without any particular....
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....spect of Supplementary Complaint was allegedly going on. Therefore, this date 25.08.2022 regarding second statement of Chandan Kelekar is material and significant. It is because previously when the investigation against the Applicant(A3) was going on prior to filing of the Main PC, this Mr. Chandan Kelekar had submitted his first statement under Sec.50(2) and (3) of the PML Act on 17.09.2021. It is material to note that in this first statement he has not even whispered about any such meeting among the then Union Minister, Chief Minister, MHADA Officers, he himself etc. But it is only after the Applicant(A3) filed two big volumes of this bail application with written submissions and made out his defence. For the first time on 25.08.2022, Mr. Chandan Kelekar has made statement as follows, "Firstly, in around September 2007 a meeting was called upon by the then Hon'ble Chief Minister of Maharashtra, Shri Vilasrao Deshmukh to know the financial implications of the project as per the current as well as the future proposed Development Control Regulations. In this meeting Shri Sanjay Raut, the office bearer of Patra Chawl viz Shri Rajaran Shinde, Shri P.Y. Shinde, Coordinator....
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....s is the first statement in the Supplementary Complaint against Sanjay Raut(A5) and thereafter ED did 'Dramatis Personae' and transposed the role of the Applicant(A3) and attributing main role to Sanjay Raut(A5). Except this statement there is absolutely nothing against the Applicant(A3) and even against Sanjay Raut(A5). Even otherwise also his statement prima­facie demonstrates that the Applicant(A3) was liasoning with MHADA, occupants and the same which supports the contentions of the Applicant(A3). 72. Careful examination of the statement dt.21.02.2022 of Mr. Parag Munot recorded under Sec.50(2) and (3) of the PML Act, clearly indicates that he specifically stated how HDIL was marketing for selling the Development Rights/FSI in Siddharth Nagar. He further states that in an around August­September,2010 they had a meeting with Rakesh Wadhawan(A1) and Sarang Wadhawan (A2) of HDIL . Stepping head he further clearly states that he had not interacted with Pravin Raut(A3) relating to this project. As such there is no interaction with him, however, in one meeting with Rakesh Wadhawan(A3) and Sarang Wadhawan (A2) in HDIL Tower, Mr. Rakesh Kumar Wadhawan (A1) introduced....
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....and (3) of the PML Act, states that, he is Chief Financial Officer of KBJ Developers Pvt. Ltd. He further specifically stated that Rakesh Kumar Wadhawan (A1) was the person with whom persons from his company KBJ Developers Pvt. Ltd. were interacting. He specifically stated that, they do not know Pravin Raut (A3). 77. Mr. Akshay Jayantilal Doshi in his statement dt.02.03.2022 recorded under Sec.50(2) and (3) of the PML Act, gave answer to the question as to how he had received project from GACPL, as Rakesh Kumar Wadhawan (A1) himself approached him, introduced and convinced him for the project of Siddharth Nagar, which is available for investment and potential business. He clearly states that, he had never any interaction with Pravin Raut (A3) with regard to the dealing of the project and Mr. Chandan Kelekar, their Project Architect introduced him to Pravin Raut (A3), during a meeting with MHADA. 78. Rakesh Wadhawan (A1) in his statement dt.24.03.2022 recorded under Sec.50(2) and (3) of the PML Act, states that, the FSI was sold for raising finance and increasing the viability of the project. He further stated that, money was utilised for payment of rent to the Society members....
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....02514 with Bank of India, Borivali West Branch. In this way he has submitted a chart showing Rs.95 Cr. received by the Applicant(A3) from 03.04.2008 till 14.10.2010. The charge is Annexure 'X' to Part­II of the Bail Application. The Applicant(A3) has also filed bank statement of Pravin Raut showing the flow of these amounts which prima­facie indicates that not a single penny he(A3) had received from any third party FSI buyer of free sale component. Even otherwise contention raised by ED is PAO for ECIR 2019, itself indicates that whatever they contended in this present ECIR is false and Pravin Raut(A3) did not receive anything. 82. Similarly in his statement Mr. Hemant Patil states his awareness about applicant's (A3) association with HDIL in Siddharth Nagar Project as, "I am not linked or connected with Patra Chawl Redevelopment Project". Prosecution has recorded statements of number of witnesses, but I am of the opinion that unless prosecution prima­facie establishes that the amount of Rs.95 Crore/Rs.100 Crore/Rs.112 Crore is the POC generated from the criminal activity relating to the Scheduled Offence of cheating and criminal conspiracy, that too supp....
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....r Project during 01.04.2008 to 14.10.2010. In his statement under Sec.50 of the PML Act dt.21.09.2020 while answering question No.5 regarding remainder he received in relation to minimum guaranteed profits in Irani land deal and Siddharath Nagar Project from 23.04.2010 to 14.10.2010. He has filed various documents which prima­facie justify his role in resolving the property of Iranis situated at Palghar. In this way, according to him, none of these amounts were received during the period when the POC Rs.1039.79 Crore was received/illegally collected. There is no document to prima­facie show that the applicant received any POC. On the other hand ED contends that whatever he received i.e. Rs.95 Crore, is POC in respect of ECIR 2019, which was generated and laundered by A1,A2 and their HDIL by illegally raising loan from PMC Bank, which itself prima­facie proves contention of Pravin Raut (A3). 85. In order to support his contention regarding Rs.50 Crore, he filed the Annual Returns of GACPL dt.21.05.2010, Evincing that he had transferred 2,49,900 shares in GACPL in favour of HDIL and 100 shares in GACPL in favour of Rakesh Kumar Wadhawan (A1). Secondly Form 20B filed by....
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.... of Crime and committed alleged money­laundering were not even arrested by the ED under Sec.19 of the PML Act. Even after their release under Sec.88 Cr.P.C., ED has not challenged the said order and allowed it to become absolute and final. On the contrary alleged meager recipients of Rs.95 Cr./Rs.100 Cr./Rs.112 (A3) Cr. as well as Rs.1,06,44,375. (A5) are behind bars from a very long time, indicating disparity. 87. Apart from this, prima­facie it appears that the huge-battle of litigations which is going on right from the inception of the Project (and even prior to it since 1995 when Lokhandwala Developers were initially undertook the task, but did nothing till 2006) and the same continued even after 2013 (A3's resignation) till date, delayed the said project and it was not due to any money­laundering by the Applicant(A3). I have already discussed in detail with the settled position of law that intention of cheating right from the inception i.e. beginning, is a material ingredient to attract offence of cheating. I have clearly noted that absence thereof which further goes to show that there was no Predicate Offence. It is also apparent that initially Accused No.3....
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....this application, this Court is satisfied that there are reasonable grounds for believing that the Applicant(A3) is not guilty of such offence and that he is not likely to commit any offence while on bail. I, therefore, hold that the Applicant(A3) has satisfied rigors of twin conditions. At the cost of repetition I am of the opinion that, basically there is no Scheduled Offence and whatever alleged is a purely civil dispute, which is not a Predicate Offence to qualify arrest under Sec.19 of the PML Act and further to satisfy the rigors of twin conditions under Sec.45(1) of the PML Act. II. BAIL APPLICATION NO.582 OF 2022 OF SANJAY RAUT (A5) 90. This applicant(A5) was subsequently arrested when the Prosecution Complaint against Pravin Raut (A3) was filed and his Bail Application was being heard. So by way of supplementary complaint this applicant (A5) is being prosecuted. The case alleged in the Supplementary Prosecution Complaint is as follows, FIR No.22/2018 dt.13.03.2018 was registered by EOW, Mumbai under Ss. 409, 420, 120B of IPC against Rakesh Kumar Wadhawan(A1), Sarang Wadhawan (A2) and others on the complaint of Mr. Nitin Gadkari, Executive Engineer, MHADA, Mu....
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.... Raut. 2011 Rs.37.50 Lakhs over and above the original amount with in the span of 1 month Smt. Varsha Raut and Shri Sanjay Raut 3 For investment of Rs.5625/only in firm Avani Infrastructure by Smt Varsha Raut. Rs.13,94,375/­ Smt. Varsha Raut Total Rs.1,06,44,375/­ 92. Rakeshkumar Wadhawan(A1), Sarang Wadhawan(A2), Pravin Raut (A3) through M/s GACPL (A4) entered into an agreement for the redevelopment of the Patra Chawl, Siddharth Nagar, Goregaon (West), Mumbai. As per the terms of agreement entered into with the Society and MHADA, they were to rehabilitate 672 tenants and to provide to MHADA constructed built­up area 1,11,476.82 sqmtrs on the said property. Further they agreed to construct flats for MHADA. In consideration, the Developer was entitled to develop the free sale component on the land belonging to MHADA and to sell flats to various third party flat purchasers. However, GACPL sold the free sale component before completing its obligation. The sale proceeds of FSI amounting Rs.1034 Crore were siphoned off to the Companies of HDIL Group for business purposes while the obligation with regard to....
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....reholder/ owner. In this way Sanjay Raut(A5) was operating from behind the veil and controlling the activities through his proxy Pravin Raut (A3). In this way, IT APPEARS that Pravin Raut (A3)/Sanjay Raut(A5) MIGHT HAVE received more POC in the manner best known to them. It is also revealed that, Sanjay Raut(A5) has acquired many assets during the period the POC was siphoned off and also cash amount has been used by him (A5) for acquiring some of these assets and also for meeting the various personal expenses. He(A5) sourced these cash from his proxy Pravin Raut (A3) through GACPL. Besides the recipient of the amount of POC directly through banking channel, huge cash were received by him(A5) from GACPL(A4) and/or A1 and A2. It was utilized for acquisition of assets in Kihim for the proposed Resort project during that period. The details of cash utilized in the purchase are as under, Sr No Name of Sellers Details of the property Registered Value Cash given to the sellers. 1. Amol Shripad Khale Village Kihim, TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.1 & 2. 8,00,000/­ 34,00,000 2. Dilip Madhusudan Morjaria Village Kihim, TalAlibag....
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....e and G'Diam Jewel reportedly belongs to "Kanti Bhai Dadar" which is yet to be identified. Scope of initial project of Patra Chawl for constructing rehab for tenants in 13.18 Acres was extended to 47 Acres after entry of Sanjay Raut(A5), hence he played crucial role in granting the same. He introduced Pravin Raut(A3) as his front in GACPL at 25% share without investment. Pravin Raut (A3), old acquaintance of Sanjay Raut(A5) was spending his money on Air­ticket, domestic and foreign visits of Sanjay Raut and his family. He has provided huge amount in cheque to Sanjay Raut(A5) in the garb of return of investment etc. He has also provided huge unaccounted cash to Sanjay Raut(A5), which was siphoned off from the Patra Chawl Project. He(A5) mislead investigation regarding infusion of cash in the bank accounts of his wife and also payment of POC in cash for purchase of Alibaug land in the name of his wife and dummy person. He(A5) has threatened various witnesses from whom he had purchased land in Alibaug. He has abused Swapna Patkar with dire consequences, trying to take back the Benami land purchased in her name. He has taken POC in cash and used for personal purposes and pur....
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.... and used for purposes other than completing the project, then certainly such money is not POC and the same is not derived by committing a Predicate Offence or any activity relating to it. j. Basically no Predicate Offence is made out as any rights, liabilities, performances, non­performances violation of terms of agreement would be Civil in nature and warrant Civil Remedies before appropriate Forum. k. The applicant (A5) is charged of receiving proceeds of Crime to the tune of Rs.1,06,44,375/­ on 3 major allegations against him being (i) Receiving of Rs.55 Lakh from the account of Mrs.Madhuri Pravin Raut which is allegedly is POC. (ii) An amount of Rs.37,50,000/­ received by the applicant (A5) from Prathamesh Developers. (iii) An amount of Rs.13,94,375/­ allegedly received by the the Applicant from Avani Infrastructure. l. The Applicant (A5) had taken a personal loan of Rs.55 Lakh from Mrs. Madhuri Pravin Raut and the same had been shown in the Rajya Sabha Affidavit of the Applicant (A5) and the same was repaid by him from legal and valid source of funds. m. Rs.37,50,000/­ received by Applicant (A5)....
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....Pravin Raut (A3) is POC derived from the sale of FSI in the Patra Chawl Project, which itself speaks volumes. t. The Applicant (A5) is a victim of the Political change of power and thereby abuse of criminal machinery at the hands of ruling party. There is no likelihood of his absconding. u. The Applicant(A5) is heart patient and has undergone Angioplasty twice and there are 6 stents in his heart. He is under strict diet, medication and observation of the doctor. He is ready to abide conditions imposed by the Court and undertakes to remain present whenever called. These are the grounds the Sanjay Raut(A5) claimed for bail. 98. This Bail Application was filed when the Supplementary Prosecution Complaint against him(A5) was awaiting. Ld. Sr. Counsel Mr. Ashok Mundergi after receiving Supplementary Prosecution Complaint, opted not to take additional grounds but answer and rebut various new allegations made in the Supplementary PC by way of argument, written submission relating to argument (as per Purshis Exh.16) and various documents. Ld. A.S.G. Mr. Anil Singh raised objection that Accused No.5 has not taken any additional grounds after filing of Supplementary C....
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....s i.e. Sec.420,120B IPC. B. In the background of "A" above, I further prima­facie arrived at conclusion that there is absolutely no Predicate Offence involved in this case as alleged in the FIR. Hence, question of any criminal activity relating to it for generating POC does not arise. C. It is further held that Accused No.3 is prima­facie neither generator of POC Rs.95 Cr./Rs.100 Cr./Rs.112 Cr. nor recipient thereof by way of criminal activity relating to Scheduled Offence. D. It is also prima­facie held how ED itself contended in ECIR 2019 that Accused No.3 received Rs.95 Crore through HDIL out of outstanding illegal loan of Rs.6117.93 Crore raised by Rakesh (A1) and Sarang (A2) from PMC Bank. In this way, it is prima­facie held that accused No.3 is neither generator of Rs.95 Crore POC nor recipient thereof and the selfcontradictory rather self­destructive stand taken by ED as such, itself prima­facie establishes as such. 101. Right from the beginning (in Main PC) till the Supplementary Complaint against Accused No.5, ED's contention is that accused No.3 is generator, recipient of Rs.95 Cr. / Rs.100 Cr. / Rs.112 Cr. From th....
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....,A2 and their HDIL, in his bank account. Out of these, 1.06 Cr. was moved from Pravin Raut's (A3) bank account to the bank account of Sanjay Raut(A5). b. On 14.08.2006 Secretary, Housing Department, prepared a Note contending that, the then Union Agricultural Minister had desired discussion about redevelopment of Siddharth Nagar Project. Sanjay Raut(A5) participated the said meeting and indicated that redevelopment of the Siddharth Nagar Project as per G.R. of 1988 may not be viable. c. Thereafter, Development Agreement dt.18.08.2006 was executed between the Society and GACPL for 13.18 Acres of land for 672 tenants. d. Some time in September, 2007 a meeting was called upon by the then Chief Minister to know the financial implications of the Siddharth Nagar Project as per the current and proposed Development Control Regulations. In the meeting Mr.Sanjay Raut(A5), the Office bearers of the Society and MHADA Officers were present. No minutes were prepared for this meeting. e. GACPL, thereafter, changed shareholding pattern and structure by exit of earlier shareholder and entry of Accused No.1 to 3. f. The scope of initial project for th....
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....etings had been recorded. In fact minutes of such high level official meetings are bound to be recorded as per the Protocol. Even some record is always maintained in respect of such meetings for the official purpose. Because those two meetings were not held by politicians but were held by the then Union Agriculture Minister and Chief Minister of Maharashtra. 105. Careful examination of whole documents and statements it is prima­facie evident that, except Chandan Kelekar, who is not any Government Official, but allegedly participated those meetings states about the same with minute details out of his photographic memory. ED has not recorded statements of the MHADA and Government Officers present in the said meeting viz. T. Chandrashekhar (V.P.), Chief Officer, Legal Adviser, Chief Engineer, Chief Architect. Even no official record which is bound to be preserved by the Office of the Chief Minister, regarding the suggestions given by Mr. Vilasrao Deshmukh, the then Chief Minister, in the said meeting as stated by Chandan Kelekar in answer to question No.3 of his statement dt.25.08.2022. As noted above, no statement of Government/MHADA Officers allegedly present in the said meeting....
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....alleged two meetings of the then Union Agriculture Minister and the then Chief Minister, therefore requires cautious consideration and examination. 108. The date 25.08.2022 when Mr. Chandan Kelekar's second statement was recorded, has great significance. It is material to note that his second statement was recorded when Main Prosecution Complaint was already filed and Pravin Raut (A3) had already filed his bail application (Exh.8) way back on 05.05.2022 and also had completely disclosed his defence, making it known to everyone including ED. Hence, the date 25.08.2022 of his second statement carries great significance. I have already noted how by Supplementary Complaint, ED astonishingly made 'Dramatis Personae' transposing the roles attributed to Pravin Raut (A3) and Sanjay Raut(A5) making this applicant(A5) as a main culprit. The date of statement of Mr. Chandan Kelekar has to be viewed with this background. It has to be noted that his first statement was recorded on 17.09.2021, wherein he had not stated a word about such two meetings with the then Union Agriculture Minister and the then Chief Minister late Mr. Vilasrao Deshmukh, though it was allegedly within his k....
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....s true, without application of judicial mind, T. Chandrashekhar, the then V.P. and high level MHADA Officers, Government Officials will also have to be considered as a part of the said criminal conspiracy as per Sec.120B IPC. 110. Careful perusal of the Main and Supplementary Complaints prima­facie indicates that, ED has allegations against MHADA, yet the following questions still remain unanswered : i. Why all the Government and MHADA Officials participated the said two meetings are not accused herein? ii. Why only Pravin Raut (A3) and Sanjay Raut(A5) were arrested and main money­launderers Rakesh Wadhawan (A1) and Sarang Wadhawan (A2) who had admitted their misdeeds by making sworn statements in the Affidavit before the Hon'ble High Court, were not even arrested, when the ED had arrested them in almost every other previous crimes? iii. How it can be justified at law? 111. When prima­facie this truth is glaring, how can it be hushed up? Particularly when the Hon'ble Supreme Court repeatedly laid down as "Truth is the guiding star. Criminal Trial is a voyage for discovery of truth. Truth alone triumphs and Court should always mak....
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....ss the bar that, he and prosecution would be filing report under Sec.169 Cr.P.C against Pravin Raut (A3) and this aspect cannot be ignored. 114. It is an admitted fact that, once upon a time Pravin Raut (A3), his wife, Sanjay Raut(A5), his wife, Swapna Patkar and her husband Mr. Sujit Patkar, were very close family friends. Except statements recorded under Sec.50(2) and (3) of the PML Act, there is nothing which remotely suggests that the Applicant(A5) was instrumental in all what has been alleged in the Supplementary Complaint. Old acquaintance between Pravin Raut (A3) and Sanjay Raut(A5) as well as their family relations is not much disputed fact. Mere giving of money by Pravin Raut (A3) to Sanjay Raut(A5) would not amount sharing of POC, when the main component of the POC is absolutely absent, as held in the Bail Application of Pravin Raut (A3). 115. Much capital is made by the ED of five statements of Ms. Swapna Patkar recorded under Sec.50 of the PML Act. In the statement dt.09.12.2020 she states that she is Consultant Physiologist with Lilavati Hospital and has her own Clinic in her residence at Kalina. She also does Corporate Training and has been teaching in Mumbai Unive....
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....y threatened the said land owners and compelled them to sell their lands/plots to him and Sujit Patkar. Their contention as such is based on the statements of witnesses including this witness Ms. Swapna Patkar. She on page 184 (Vol.II) clearly states that when she met Mr. Shridhar Edekar he was a very old person and he informed her that, "I came to know later that he has been threatened to sell his land. Therefore, prima­facie it is clear that it is not her first hand knowledge of the said fact, but the same is based on the hearsay knowledge of someone else. I am constrained to note that, Ld. A.S.G. Mr. Anil Singh while arguing the case vehemently referred word "Whosoever" in Sec.3 of the PML Act and contended how the case of Sanjay Raut(A5) falls under the said caption having dealt with POC. If the same parameter is applied to the case of Ms. Swapna Patkar, she being recipient of alleged POC and purchased land/plot for herself and her husband at the instance of Sanjay Raut(A5), would be equally liable under Sec.3 of the PML Act. Astonishingly regarding her also, the ED appears to have availed pick and choose strategy for the reasons best known to them. Prima­facie it is....
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....ration of the land, which is against the statement and contention of Ms. Swapna Patkar that, it was her husband Sujit Patkar who did all the negotiations. While answering question No.11 (page 479) he specifically states that he had not negotiated with the sellers of the land at Kihim and his wife Ms. Swapna Patkar has carried out the deals by herself at her office in Sion, Mumbai. 120. As noted above Mrs. Swapna Patkar, her husband Sujit Patkar had dealt with other work i.e. meeting land owners etc., but on page 479 while answering question No.12 Mr. Sujit Patkar states that, he was not even present at the time of negotiations with the land owners and further relating to question No.15 states that, he does not have any information if any payments were given through other means. In his second statement dt.09.09.2022 at page 490, he again confirmed that, it was Mrs. Swapna Patkar who wanted to start the Resort at Kihim and after Mr. Sanjay Raut had shown interest, they started looking for plots. On page 492, question No.6 he further states that, he does not know from where the cash part of the payment to the land owner was made. Question No.8 on page No.492 (Vol.II) he specificall....
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....states having received Rs.24 Lakh in cash and Rs.6 through cheque. 124. Mr. Avinash Deshpande on 04.02.2022 states that he received Rs.13 Lakh in cash and Rs.17 lakh through cheque. Whereas in the statement dt.07.09.2022 he states having received Rs.30 lakh in cash and Rs.17 through cheques. Mr. Amit Shukla in his statement dt.04.02.2022 states that he did not receive any payment in cash. Whereas, in the statement dt.05.08.2022 he states having received Rs.24 Lakh in cash and Rs.4 Lakh through cheque. Mr. Dilip Morgaria in his statement dt.04.02.2022 states that he did not receive cash. Whereas, in his third statement dt.05.08.2022 states that, he received Rs.18 Lakh in cash and Rs.4 through cheque. 125. All these, which are referred above, are the statements of vendors who allegedly sold their plot/lands at Kihim, Dist. Raigad which Sanjay Raut(A5) allegedly purchased through the POC. Quality of statements as noted previously, cannot be ignored when the bail application under PML Act is to be decided in the background of twin conditions under Sec.45(1) of the PML Act. Particularly, such quality of material which clearly indicates that all these witnesses have been stating th....
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....ndertaken in doing to amounts to offence of 'money­laundering'. Sanjay Raut(A5) though had received some monies as alleged in the Prosecution Complaint from Pravin Raut (A3), yet there is absolutely nothing to show that, it is a POC with knowledge thereof to Sanjay Raut(A5). Basically it is not a POC. Therefore, some unaccounted money had been dealt with by Sanjay Raut(A5) at the relevant time during 2007­11 or any other period thereafter, for purchasing plots at Kihim, cannot be thrown in the stock of POC. Possessing and dealing with unaccounted money may have different consequences under the different Penal Laws, but the same cannot be equated with the term POC defined under Sec.2(1)(u) of the PML Act for making Sanjay Raut(A5) accountable and liable under the wide meaning of the opening word "Whosoever" in Sec.3 of the PML Act. 128. In the above context, it can be added that even if Sanjay Raut(A5) in his statement under Sec.50 of the PML Act had referred the name of one Kantibhai of Dadar to justify alleged unaccounted cash and ED contended that no such person or entity was actually found in existence, the same will not throw him (A5) directly under ....
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....ul (tenancy right holder) had filed an appeal claiming tenancy right before Prant Adhikari, wherein the Appellate Authority passed an order in his favour. When he(A3) took bookings, was not aware of this fact, hence, he returned the total amount + profit i.e. Rs.50 Lakh (booking amount of Rs.35 Lakh + profit of Rs.15 Lakh) taken from Mrs. Varsha and Sanjay Raut(A5). He further stated that when the said tenancy dispute was revealed, Mrs. Varsha and Sanjay Raut(A5) were interested in that particular premise only therefore, he returned the initial booking amount + profit within a month. Therefore, whatever stated by Kantilal Doshi on 07.08.2022 is fully corroborated to the statement of Pravin Raut (A3) dt.05.02.2022. Again the question remains that, those amounts Rs.17,10,000/­ and Rs.12,40,000/­ invested by Mrs. Varsha and Sanjay Raut(A5) do not have any nexus between them and alleged POC. 131. Ramji Veera, friend of Pravin Raut (A3) in his statement dt.24.08.2012 stated that Pravin Raut (A3) is his good friend. ED's case is that when they took search in the house of Sanjay Raut(A5) got certificate­cum­policy schedule in respect of Innova bearing MH02­CV 77....
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....stand of the ED cannot be acknowledged at law. There are no POC nor any criminal activity relating to the Scheduled Offence to prima­facie hold Pravin Raut (A3) responsible for the same. 133. Ld. Sr. Counsel Mr. Mundergi submitted that Sanjay Raut(A5) has shown Rs.55 Lakh personal loan taken from Mrs. Madhuri Pravin Raut and mentioned the same in his Affidavit submitted for Rajya Sabha Election. Simply he had returned the same, pursuant notice received from EOW, does not mean that he admits his guilt in respect of money­laundering. Regarding Rs.30 Lakh he has given the explanation that Mrs. Varsha Raut received the same from Avani Infrastructure and the same is supported by the Ledger Account of the said Avani Infrastructure. Not only this but also Sanjay Raut(A5) had mentioned this amount as outstanding loan in his Rajya Sabha Declaration Form. Regarding repayment of Rs.37 Lakh within one month, Pravin Raut (A3) has given plausible explanation for the same. Even then the same does not point out any nexus with the alleged POC. 134. Ld. A.S.G. Mr. Anil Singh argued that, contradiction between statements of the witnesses cannot be looked into and therefore, whatever sta....
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.... bogus entity availed by the applicant(A5) only to accommodate entries in the name of Mrs. Varsha Ratu. However, copies of Ledger Account of Avani Infrastructure which is the best prima­facie evidence do not support such contention of ED. In this background, I hold that even statement of Shoaib Sequeira dt.11.07.2022 does not carry much importance as the same has no connection with the Scheduled Offence and had been recorded when Pravin Raut(A3) filed his bail application and disclosed his contention. 137. It is ED's contention that, Sanjay Raut(A5) has purchased several plots at village Kihim, Alibaug at the rate below market value and also paid the remaining amount in cash and thereby he (A5) has used and influenced the cash received from the POC for purchasing the said plots. I have already discussed in detail the quality of material available through the statements of plots sellers. It cannot be ignored that, those plots were purchased long long ago at the prevailing market rate. He purchased it in the name of his wife Mrs. Varsha alongwith this then partners Ms. Swapna Patkar, Sujit Patkar. Ld. Sr. Counsel Mr. Ashok Mundergi produced copies of INDEX­II, which pr....
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....dispute over property. The disputes are civil in nature and both parties can approach competent courts to resolve the issues. Hence, the application needs no further inquiry." 139. Statement of Pravin Raut (A3) recorded by ED on 05.02.2022 gives prima­facie clear account about the claims of ED. In the written submissions (Exh.20) filed by ED on 02.11.2022, everywhere the same story is repeated which is alleged in the Supplementary Complaint. It is also reiterated how Sanjay Raut(A5) could not give satisfactory explanation for the amount came into his account and in the account of his wife. Basically ED cannot travel reverse saying that particular amounts revealed in the investigation and found during house search of Sanjay Raut(A5) were unaccounted and without any satisfactory explanations, hence the same are POC. Basically first of all ED has to point out foundational facts relating to existence of POC beyond reasonable doubt as to any particular amount having generated as POC from the criminal activities relating to Scheduled Offences. 'Unaccounted Money' without explanation and without nexus with POC or any activity relating to Scheduled Offence cannot be capitali....
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....having full knowledge of the same, the person concerned projects it as 'untainted property'. The process undertaken in doing so amounts to offence of 'money­laundering'. 140. In the background of above detailed discussion in respect of bail application of Pravin Raut (A3) and Sanjay Raut(A5), I hold that, basically there are no POC nor was there any Scheduled Offence to qualify the ECIR. Pravin Raut (A3) was arrested for civil litigation and Sanjay Raut(A5) for no reason. Basically arrest of both of them under Sec.19 PML Act is illegal for want of Scheduled Offence and the civil dispute not being Scheduled Offence. Therefore, question of coming rigors of stringent twin conditions under Sec.45(1)(i)(ii) in their way does not arise. Even if for the sake of consideration it is assumed that the said rigors attract, yet I hold that both accused (A3 and A5) have satisfied the twin conditions as held by the Hon'ble High Court in the case of Madan Gopal Chaturvedi Vs. Directorate of Enforcement (Cr. Bail Application No.330 of 2022) held as follows, 20. In this case, the Investigating Agency did not arrest Sarang Wadhawan and as a result thereof, Sarang Wadhawan could se....
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....d with great caution, sparingly as a last resort. The Hon'ble Lordship Shri Justice R.V. Raveendran of the Hon'ble Supreme Court recently in the Journal Section of the (2022)8 SCC (J)1 mentioned various factors in his article "JUSTICE DELIVERY - SOME CHALLENGES AND SOLUTIONS, on page 9 para 2 as follows, "Not all accused are guilty. Many an innocent are being accused of crimes or are framed on the basis of slip­shod investigations, false accusations, political or local rivalry, and family vendetta. Though a person accused of a crime is deemed innocent till proved guilty in a court of law, an arrest or being charged with an offence takes away his freedom and livelihood, apart from destroying his reputation. His family members are shunned, becoming outcasts overnight. At any given point of time, there are about three lakh undertrials (persons held in custody awaiting trial) locked up in prisons, making up fo about two­thirds of the prison population." ED Investigating Officers are not Police Officers, but have power to arrest as per Sec.19 (1) of the PML Act, which reads as follows, 19. Power to arrest - (1) If the Director, Deputy Director, As....
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....asons. All this prima­facie indicates that the extreme and exceptional powers of arrest, ED Investigating Officers have used very casually in utter disregard to Sec.19 of the PML Act, which is very very serious in the background of repeated guidelines of the Hon'ble Supreme Court in respect of arrest. It cannot be ignored that Pravin Raut (A3) was arrested on 02.02.2022 and eversince till date for about nine months he has been behind bars. Similarly Sanjay Raut(A5) was arrested on 01.08.2022 and eversince till date behind bars more than three months. Basically, there was no reason nor any occasion to arrest both of them under Sec.19 of the PML Act for the allegations which are basically nothing but a civil dispute. Basically, the arrest of both of them under Sec.19 is not qualified. It is material to note that, initially ED raided the house of Sanjay Raut(A5) on 31.07.2022 and did not allow him(A5) to move anywhere throughout the day. Thereafter, he was brought to ED office and after grilling him, in the mid­night of 31.07.2022 arrested him at 12.35 a.m. of 01.08.2022. Basically there was no legal necessity to arrest him in the mid­night when in reality he could not....
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....g him automatically gets down to almost zero. Once the applicant (accused) files bail applications, ED takes at least three to four weeks or more than that to file their reply. In the instant case, Pravin Raut filed his bail application on 05.05.2022. From 18.05.2022 onwards, 31.05.2022 and 08.06.2022 ED did not file their say. On 21.06.2022 ED filed their say, which clearly indicates that one and half months ED took to file say to bail application of Pravin Raut (A3) when he is an under­trial prisoner. Decision of his bail application is condition precedent to decide bail application of Sanjay Raut(A5) also, which the ED wanted to prolong for long time. Apart from this, in every matter it is noticed that, ED takes very very long time to reply the simple applications filed by any accused. 147. I am constrained to refer the example on this aspect. In Special Case No.6 of 2019 Purshis (Exh.127) on behalf of Accused No.2 informing his death was filed on 12.05.2022 alongwith copy of death certificate. In order to safeguard interest of the ED, this Court simply asked them to verify this fact to pass an order of abatement. I am constrained to note that ED simply consumed time from....
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....ly as possible not more than the span of time provided therein. In this background it is necessary to take serious note that Pravin Raut's (A3) bail application has been pending since 05.05.2022 i.e. more than six months, and even Sanjay Raut's (A5) bail application has been pending since 08.09.2022 i.e. more than three months, even if both of them were illegally arrested under Sec.19 of the PML Act. Yet, the ED wants to keep those applications pending for uncertain period. This is very serious. All this prima­facie indicates that, ED is forgetting that, we are in the era of Vijay Madanlal Choudhary (paragraphs 31 to 33), D.K. Basu, Arnesh Kumar and Satender Kumar Antil. The directions in the Satender Kumar Antil are equally binding on ED. 149. Contention of ED in the Supplementary Complaint of making 'Dramatis Personae' while transposing roles attributed to Pravin Raut (A3) and Sanjay Raut(A5) and that Pravin Raut (A3) was front­man, proxy for Sanjay Raut(A5), is not sustainable in the natural course of conduct. Their own case indicates that Pravin Raut (A3) generated and laundered Rs.112 Crore and Sanjay Raut(A5) received Rs.1,06,44,375 (Main PC) and Rs....
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.... (2007)11 SCC 195. vi. Gharban Ali Pour Azadi Vs. Intelligence Officer, Air Intelligence Unit, Bombay and Others (1996 SCC OnLine Bom 59). vii. Gautam Kundu Vs. Directorate of Enforcement (Prevention of Money­Laundering Act) Government of India, through Manoj Kumar, Assistaant Director, Eastern Region, (2015)15 SCC 1. I carefully studied the ratio, guidelines and law laid down in the above authorities. However, facts in the instant case are peculiar, wherein ED has taken duel stand and contended the Proceed of Crime involved in the instant ECIR and in the ECIR of 2019 is one and the same. Basically this Court prima­facie held that such self­destructive stand itself proves the case of the applicants. Apart from this, I am of the prima­facie opinion that civil litigation is the reason for arrest and ECIR of both accused which is basically not a Predicate Offence. There is absolutely nothing to show that right from the inception in 20062007 Pravin Raut (A3) and also Sanjay Raut(A5) keeping himself behind the curtain, entered this project with a wise brain with an intention to fraudulently induce and cheat MHADA and 672 occupants thereof. A1,A2 and ....
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....R No.22 of 2018 for the facts and circumstances of transaction which had allegedly taken place during 2006 to 2013. In this way the conduct of MHADA right from beginning till date is suspicious and even ED admitted the same in their complaints, yet ED has not made any MHADA staff accused. vi MHADA's attitude as such lodging FIR No.22 of 2018 on one fine morning can neither throw dust in the eyes of the Court nor can brush of and wash out long civil litigations which were even acknowledged by the Hon'High Court. Hence, this Court cannot join its voice in the chorus of ED and MHADA. vii Rakesh and Sarang (A1 and A2) for their misdeeds and being the main accused persons admitted the same by affidvit of Sarang Wadhawan, were not arrested by the ED but they have been left scot­free. But at the same time Pravin Raut(A3) was arrested for civil dispute, whereas Sanjay Raut(A5) for no reason. All this clearly indicates disparity, pick and choose attitude of the ED and the Court cannot put premium on the same but legally bound to make parity. viii If the Court still accepts contention of ED and MHADA and further rejects the bail applications of Pravin R....