TaxTMI 
TaxTMI 
2022 (11) TMI 927
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.... 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 (Exh.8) is Accused No.3 in this case, prayed for gra....
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....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 lodged FIR No.22/2018 dt. 13.03.2018 on the basis of the complaint filed by Mr. ....
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.... 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 various third party developers without informing MHADA or obtaining its consent and thereby received substantial amount of money for the....
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....ring 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 that around Rs.100 Crore Pravin Raut (A3) received in his bank account from HDIL and further transferred the same in acquiring assets. Hence, he is knowingly involved ....
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....ing 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 of Nippun Thakkar in Mumbai were stuck in litigation and thereafter he suffered from health issues, hence he asked help of Accused No.3 acknowledging his experience in the field. h On 01.06.2000 GAPCL was incorporated with....
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....ount 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 procedural correspondence with MHADA and handling various litigations. v. Accused No.3 was never in­charge of sale of development rights nor has any knowledge thereof, when accused No.1 and 2 were directly connected for the same. w. Accused No.3 is not liable under Sec.70(2) of the PML Act. x. The prosecution complai....
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....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, thorough examination of available materials as required for ascertaining a prima­facie case, without any mini­trial, is inevitable. Guidelines of the Hon'ble Supreme Court and the Hon'ble High Court in recent authorities reiterated that if allegations and consequences thereof are serious, 'Beyond reasonable doubt and not preponderance of probabilities'....
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....ehicle 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 scheduled offence as proceeds of crime for the purpose of the 2002 Act. Dealing with proceeds of crime by way of any process or activity constitutes offence of money­laundering under Section 3 of the Act. 32. Be it noted that the definition clause includes any property derived or obtained "indirectly" as well. This would include property derived or obtained from the sale proceeds or in a gi....
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....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 crime", as it obtains as of now." It is, therefore clear that, there should be a nexus between property derived or obtained, directly or indirectly "as a result of" criminal activity relating to "the stated scheduled offence". Even at the stage of bail on the basis of available materials, examination to prima-facie find out, was there any scheduled offence, at the relevant (contemporary) time? Was the POC de....
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....d 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 inducement is also a material constituent aspect, which has to be satisfied. 21. Apart from the above, other three basic ingredients of Sec.3 of PML Act are necessary to be seen, which are Placement, Layering and Integration. (a) 'Placement' refers to the physical disposal of bulk cash proceeds derived from the illegal activity. Moving the funds from direct association with the crime. The ultimate aim of this phase....
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....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 EXISTENCE OF THE SCHEDULED OFFENCE? GENERATION OF POC AND MONEY­LAUNDERING? Facts and Material relating of Contemporary Period. 24. Execution of Tripartite Agreement dt.10.04.2008 by the Society, GACPL and MHADA is an admitted fact. On 20.03.2007 the applicant(A3) became Director of GACPL, specifically for handling various litigations concerning Siddharth Nagar Project. Prior to it there was similar project initiated by Lokhandwala Builders and....
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....ave 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'ble High Court refused to exercise of the jurisdiction and also considering the merits dismissed all those proceedings on 10.02.2011. 27. It is therefore apparent to prima­facie hold that until 10.02.2011, there was absolutely no element of cheating, intention to cheat and induce 672 occupants and MHADA nor any criminal conspiracy or breach of trust on the part of the applicant(A3) and GACPL. On the contrary the Hon'ble High Court had appreciated the development work and progress thereof. This fac....
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.... 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 Offence, as contemplated in Sec.2(1)(u) r.w. Sec.3 of the PML Act? Prima­facie there is absolutely nothing to show that there was dishonest intention of Pravin Raut(A3) from the inception and at the very beginning of the transaction, to hold him guilty for an offence under Sec.420 IPC or even Sec.120B IPC. On the contrary all such activities indicate genuineness thereof. 30. Ld. Sr. Counsel Mr. Aabad Ponda placed reliance on Pran Jyoti Bhuyan V. State of Assam, (2014 SCC OnLine Gau 18), wherein it was held that it is inbuilt in Section 415 of the IP....
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....ent 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 instead of signing the Sale Deed at this juncture, you will only take booking for free sale flats and enter into Agreement for Sale. It is further clarified that you will be permitted to sell free sale component where signature of the MHADA officers will not be required, however NOC to the Occupation Certificate for free sale component shall not be issued by MHADA unless and until proportionate share of built up area is handed over to MHADA. 33. This MHADA letter dt.26.07.2011 is prima­facie the best evidence to show that, GACPL was permitted to enter into agreements fo....
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....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 Deed, Clause (xviii) of the Tripartite Agreement was replaced as follows, "... It is further expressly agreed and understood between the parties hereto that in case the Developer desires to sell the free sale component on its own terms and responsibility either in its entirely or in part including sale of flats/units that would be construed in the free sale building component then the Developer may do so provided however, MHADA shall not be responsible for any liability that may arise from the same and the Developer shall not exceed the FSI that is allotted to it under the Joint Development Agreement, and shall further ensu....
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....etween 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 06.07.2012. Hardly one year and five months thereafter the applicant(A3) resigned GACPL. Till then and even in the second round of every litigation, MHADA was party. Yet, never contended that the applicant(A3) was the main person who induced MHADA and 672 occupants and further cheated them, laundered money from the activity relating to the Scheduled Offence (Ss.420,120B IPC), which is the basic requirement for offence of cheating. Even otherwise it is on record that right from the beginning a battle of civil litigations was going on in respect of the said project and the Hon'ble Supreme Court shut down this first round of litigati....
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....er 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 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....
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....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 permitted and affirmed the transactions between GACPL and third party developers for the free sale component. c. In the suit before the Hon'ble High Court, it is MHADA who affirmed that purported wrong doings alleged in the complaint were done by HDIL, Rakesh (A1) and Sarang (A2). So, MHADA is prima­facie estopped and cannot be allowed to deny the same and fasten criminal liability on the Applicant(A3). When the serious question of Right to Liberty of the applicant (A3) is there, the Court cannot accept and put premium on such approbate and reprobate attitude of the MHADA. All this what MHADA has been doing is by its declaration, act or omission, intentionally caused or ....
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....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 applicant(A3) was in­charge of handling the litigation arising out of Siddharth Nagar Project. He had to obtain individual letters from the tenants, eviction of the tenants, field work, make correspondence with MHADA and other authorities relating to project and handling various litigations. There is absolutely nothing to show that he was part of any criminal conspiracy for inducing and cheating 672 occupants as well as MHADA and generating POC from the activities relating to it, that too at the relevant time when no such FIR was lodged for those alleged contemporary activities. Even there is absolutely nothing before the Court to prima­facie satisfy that, he(A3) had sold FSI relating to free sale c....
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....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 therefore of the view that, ED has either lost sight or purposely not referred all these litigations and circumstances of transaction with such details in the PC, for the reasons best known to them. It is material to note that, ED has made much capital regarding MHADA's termination of Tripartite Agreement, yet the subsequent proceedings they had participated before the Hon'ble High Court (which are referred above) clearly indicate that MHADA was party before the Hon'ble High Court and accepted the order dt.14.03.2018 ignoring termination dt.12.01.2018. All such references which are discussed above, are also referred in the orders passed by the Hon'ble High Court. While making prima­facie examina....
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....hat 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-referred battle of litigations, circumstances of transaction and conclusive observations made by the Hon'ble High Court. Certainly all these cannot be lost of sight while deciding merits of the bail application. 51. Ld. Sr. Counsel Mr. Aabad Ponda, in order to juxtapose the above referred observations made by the Hon'ble High Court, placed his reliance on the Affidavit dt.08.02.2017 filed before the Hon'ble High Court, wherein Sarang Wadhawan (A2) has made sworn statements which are referred in paragraph 42 above. At the cost of repetition it has to be noted that MHADA was party to the said litigation before the Hon'ble High Court. Sarang Wadhawan (A2) has explicitly stated that, GACPL has entered into Development Agreements with ....
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....d 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 prima­facie hold that, entire money trail which allegedly pertains to FSI sale proceeds is prima­facie nothing but a false and feigned contention put forth by the ED, which basically has absolutely no link with the Applicant(A3). All this prima­facie goes to show how the ED is doing approbate and reprobate. 54. In the aforesaid premises argument of Ld. Sr. Counsel Mr. Aabad Ponda prima­facie justifies that, the restrictions contained in the obligations recited in the Tripartite Agreement were relatable only to the component of the project accruing to the benefit of MHADA and the tenants, which component was ascertained in the Tripartite Agreement. In this regard, the restrictions recited in Clause 9.3 of the Tripartite Agreement in the capaci....
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....mpanies 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 project which remains incomplete. Whereas most of the funds were siphoned off. The entire amount totalling to Rs.1039.79 Crore illegally collected by unauthorised sale of FSI is the Proceeds of Crime in terms of Section 2(1)(u) of PMLA,2002. The investigation is under progress to trace the proceeds of the crime. 57. It is material to note that even ED also pleaded in the Main Prosecution Complaint the specific role of Rakesh (A1), Sarang (A2) Wadhawans in paragraph 13.01 on page 42 in following words, "Rakesh Wadhawan and his son Sarang Wadhwan were the Directors of Guru Ashish Construction Pvt Ltd and also the decision makers. The decision to sale the FSI was decided by them and also decided the utilisation of the proceeds of sale. They have siphoned of the subject sale p....
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....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 Provisional Attachment Order (PAO) and provisionally attached various properties of the Applicant(A3) worth approximately Rs.72 Crore. Basis for this action was the allegation that, HDIL had availed huge illegal loan from PMC Bank and total Rs.6117.93 Crore thereof was outstanding. Next contention for the said PAO was that HDIL had paid an amount of Rs.95 Crore to the applicant(A3). For that Ld. Sr. Counsel Mr. Aabad Ponda filed copy of PAO No.16 of 2020 in F.No.ECIR/MBZOI/09/2019 dt.31.12.2020. It is necessary to reproduce relevant portions from OC 1396 of 2021 as follows, "The total outstanding loan of INR 6117.93 crores from PMC Bank to HDIL Group constitute the proceeds of crime." 9.1 Investigation also revealed that from the aforesaid proceeds of crime M/s. HDIL paid an amount of IN....
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....396 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 prima­facie. All this prima­facie indicates that Rs.95 Crore has neither any connection nor does it form a part of alleged FSI Sale Proceeds i.e. Rs.1039.79 Crore. ED may take such two altogether different self-contradictory rather self­destructive stands, but the same cannot be acknowledged at law, when the serious question of Right of Liberty of a person is before the Court. 61. At the cost of repetition, it is necessary to refer three different stands taken by ED which are as follows, a. HDIL (A1 and A2) are generators of Proceeds of Crime through illegal loan and Pravin Raut(A3) is recipient of Rs.95 Crore thereof. b. In Prosecution Complaint against the Applicant(A3) it is alleged that, he(A3) is generator of POC and also recipient of Rs.95 Crore thereof. c. In Supplementary Complaint against San....
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....y 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 out following facts :­ a. In the reply (Exh.8A) page 13 Items No.9, 10, 11, 12 and 14 relating to certain new transactions from Bhoomi to the HDIL, PMC Bank account, have been added, which basically have no place in the PC. b. None of the transactions from Bhoomi mentioned in PC and reply (Exh.8A), shows that those amounts were transferred to the personal account of the Applicant(A3). c. Similarly two transactions mentioned at Items 16 and 17, page 14 of reply (Exh.8A) to show that, monies from Ekta have been transferred to HDIL, PMC bank account. However, as per complaint in relation to the same transactions from Ekta (page 29 PC Items 1 and 3) monies were further transferred to certain accounts of other entities and not to the account of the Applicant(A3). d. Two transactions mentioned at Items 18 and 19 at page 14 of the ....
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....024 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 Crores Not mentioned in the Prosecution Complaint 8. 06.11.2009 50 Lakhs Serial No. 16 / TRF TO SAPPHIRE PMC 1024 9. 09.11.2009 1 Crore Not mentioned in the Prosecution Complaint 10. 21.11.2009 1 Crore Not mentioned in the Prosecution Complaint 11. 23.11.2009 1 Crore Not mentioned in the Prosecution Complaint 12. 24.11.2009 1 Crore Not mentioned in the Prosecution Complaint 13. 20.02.2010 1 Crore Not mentioned in the Prosecution Complaint 14. 22.02.2010 1 Crore Not mentioned in the Prosecution Complaint 15. 07.01.2012 1.25 Crores Serial No. 23/Page 29 TRF TO SATYAM PMC 141 16. Ekta Everglade Homes Pvt. Ltd 14.09.2010 2.5 Crores Serial No. 1 / Page 29 TRF TO SAPPHIRE PMC 1024 17. 26.10.2010 5 Crores Serial No. 3 / Page 29 TRF TO CDM 18. Kiyana Ventures LLP 05.10.2010 11 Crores Serial No. 2 / Page 34 TRF TO SAPPHIRE PMC 1024 19. 08.10.2010 14 Crores Serial No. 3 / Page 34 TRF....
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....st Sanjay Raut(A5) came with an altogether new invention that it was not the Applicant(A3), but Sanjay Raut(A5) is the main person/culprit who was doing all such activities behind the curtain and the Applicant(A3) was his proxy, front­man and a puppet in the hands of Sanjay Raut(A5). Hence, the case took a miraculous twist by way of Supplementary Complaint, thereby making 'Dramatis Personae' and transposing the roles attributed to them (A3 nd A5). And hence, Sanjay Raut(A5) was attributed a Prime Role which he allegedly played by keeping himself behind the curtain. While attributing such Main Role to Sanjay Raut (A5), prosecution completely forgot that everywhere in the Main PC they had attributed Main Role to Rakesh Kumar Wadhawan (A1), Sarang Wadhawan (A2) and their HDIL, making them responsible even for GACPL, which was confirmed by the Hon'ble High Court. 66. In this way, in the Supplementary Complaint dt.15.09.2022 ED levelled following allegations against the Applicant(A3), a. The Applicant (A3) received Rs.112 Crore in his bank account from HDIL in the guise of Sale of Equity and Redevelopment of the project during 2010­11. Out of this, Rs.1.06 Crore w....
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....s been used by Sanjay Raut and for acquiring some of these assets and also for meeting various personal expenses." The cash received by Accused No.5 has been utilised to acquire assets in Kihim, Alibaug. i. Accused No.1,2,3 and 5 have conspired with each other and indulged in the offence of money­laundering. 67. These are the main allegations made in the Supplementary Complaint against Sanjay Raut(A5) . I have already noted on the basis of materials available with the prosecution complaint and the copies of documents filed by the Applicant(A3) that basically the prosecution is failed to point out the proceeds of crime, as claimed in the complaint. I have also noted how the prosecution has blown hot and cold by making approbate and reprobate for the same and also how it claimed the same Rs.95 Crores being Proceeds of Crime in this as well as 2019 ECIR. I have also noted how such approbate and reprobate attitude of the ED cannot be acknowledged at law when the serious question of liberty of the Applicant(A3) is before the Court. I have also noted, how the alleged Proceeds of Crime Rs.95 Crore, Rs.100 Crore and Rs.112 Crore alleged in the Main PC cannot be a Proceeds of Crime a....
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....e noted that, contention of ED without any particulars of time and minutes of meetings with the then Union Minister and the then Chief Minister, Sanjay Raut and top Government Officer Secretary of Housing Department, has prima­facie absolutely no corroboration. Statement of Mr. Chandan Kelekar has to be viewed in this background, even if statements under Sec.50(2) and (3) of the PML Act carry weight. The quality of that statement can be looked into without touching the aspect of its appreciation for arriving at prima-facie opinion. Merits of such statement is certainly a matter of trial, but the quality of the said material can be seen in the background of stringent twin conditions under Sec.45(1)(i)(ii) of the PML Act and as held by the Hon'ble High Court in the case of Anil Vasantrao Deshmukh Vs. State of Maharashtra (Bail Application No.1021 of 2022, decided on 04.11.2022). 70. It is an admitted fact that once upon a time the Applicant(A3) and his wife, Ms. Swapna Patkar, Mr. Sujit Patkar, Sanjay Raut(A5) and his wife were close family friends. All of them had some trips and also purchased properties. If they had purchased any properties as such, and Ms. Swapna Patkar m....
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....aran Shinde, Shri P.Y. Shinde, Coordinator, Shri Gavas, the MHADA Officers viz T. Chandrashekhar (V.P.), Chief Officer, Legal Adviser, Chief Engineer, Chief Architect were present. On being asked I state, I was also present in the meeting being the project Architect. After understanding the financial implications in this Project, Shri Vilasrao Deshmukh suggested that the proposal should be first concluded in the MHADA Authority meeting and thereafter to be forwarded to the Govt. for its approval. On being asked if any minutes were prepared for the meeting I state that no minutes were prepared only directions were given to get the proposal sanctioned from the authority." Admittedly, he has not stated anything as such in his previous statement dt.17.09.2021 during investigation against the Pravin Raut(A3) and for the first time he is stating as such when the applicant(A3) had made out his case in two big volumes of bail application and written arguments. All this speaks volumes pointing out that this material is not of a quality to decide the fate of this bail application relating to the serious question of applicant's liberty. Apart from this, another important aspect has to be....
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....akesh Kumar Wadhawan (A1) introduced Pravin Raut(A3). 73. Careful perusal of the statement dt.21.02.2022 of Mr. Manish Agarwal recorded under Sec.50(2) and (3) of the PML Act indicates he clearly stated that they came to know about the project from market sources and contacted Mr. Rakesh Kumar Wadhawan (A1), Director of GACPL, who gave him information of the project referring to the Resolution dt.30.07.2011. He further states that only Rakesh(A1) was interacting with them and they had not interacted with any other persons. On further asking him he further states that, he had never met Sarang Wadhawan (A2) and their only point of contact was Rakesh Wadhawan(A1). 74. Statement of Ashok Mohanani dt.22.02.2022 recorded under Sec.50(2) and (3) of the PML Act indicates that, he was asked with whom he and his persons from Ekta Everglade Home Pvt. Ltd were interacting for the project? While answering it, he specifically referred the names Rakesh Kumar Wadhawan (A1), Sarang Wadhawan (A2), Mr. Ashok Gupta, Director of HDIL, Avinash Vyvhare, In­house Architect of HDIL. He was thereafter specifically asked to explain about his interaction with Pravin Raut (A3), Director of GACPL. It is m....
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....t to the Society members/tenants which may be in the range of Crores of rupees (Approximately to 600 tenants), payment to MHADA i.e. approval expenses which may be in the range of Rs.80 Cr., construction of tenants building Rs.180 Crore (basement+upper parking on first floor+ Ground+Stroreys), MHADA construction approximately Rs.170 Cr., development of infrastructure of MHADA around Rs.85 Cr., Premium to MCGM Rs.25 Cr., construction of sale building Rs.120 Cr., besides there were administrative expenses for the same. He further stated that he had paid Nippun Thakkar Rs.50 Cr. and Lokhandwala Builders was paid Rs.14.5 Cr. and all those expenses were on account of this project. 79. Even statement of Mr. Chandan Kelekar recorded on 17.09.2021 under Sec.50(2) and (3) of the PML Act clearly indicates that, layouts were prepared as per instruction of Rakesh Wadhawan. Statement of Jagdish Rai Agarwal dt.03.03.2022 under Sec.50(2) and (3) of the PML Act, who is substantial Shareholder and Director of Gold Finger Reality Investors Pvt. Ltd., looking after day­today work of his company for taking decision and implementing the same. He also states that for his company he and his persons ....
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....y, that too supported by prima­facie evidence, such materials by way of statements cannot become sole basis for prima­facie holding the Applicant(A3) is involved and had committed in the offence of money-laundering. Exactly here the prosecution is miserably failed to prima-facie establish that alleged Rs.95 Cr./Rs.100 Cr./Rs112 Cr. is an outcome of criminal activity relating to Scheduled Offence in order to hold the same Proceeds of Crime as defined under Sec.2(1)(u) of the PML Act. On the other hand Applicant(A3) everywhere submitted that he got Rs.50 Crore out of Rs.95 Crore from selling shares and remaining Rs.45 Crore he got out of his efforts in settling the dispute of Irani land at Palghar. His contention is supported by voluminous documents relating to Iran land. 83. Apart from this, basically ED itself has explained how the Applicant(A3) got Rs.95 Crore and eased his burden to explain the same. ED has specifically contended that Wadhawans obtained illegal huge loans from PMC Bank and Union Bank of India and Rs.6117.93 Crore thereof was outstanding. Wadhawans through HDIL transferred Rs.95 Crore thereof to the Applicant(A3). With this clear stand the ED had took att....
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....B filed by GACPL with the Ministry of Corporate Affairs evinces that during the financial year ending 31.03.2010, he had no shareholding in GACPL. He further filed following proofs of receipt of Rs.95 Crore. a. His bank statement b. Statements given by him before the ED on 21.09.2020 particularly responding questions No.3, 4 and 5. c. Statement given by him to the ED dt.09.10.2020 responding question No.3. d. Statement given by him to the ED dt.01.02.2022 responding question No.5. In Vijay Madanlal Choudhary and others Vs. Union of India and others, [Special Leave Petition (Criminal) No.4634 of 2014, decided on 27.07.2022] the Hon'ble Supreme Court has held that, "Authority of the Authorised Officer under the 2002 Act to prosecute any person for offence of money­laundering gets triggered only if there exists proceeds of crime within the meaning of Section 2(1)(u) of the 2002 Act and further it is involved in any process or activity. Not even in a case of existence of undisclosed income and irrespective of its volume, the definition of "proceeds of crime" under Section 2(1)(u) will get attracted, unless the property has been derived or obtained as a result of crimin....
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....19 of the PML Act purely for this Civil litigation, which is not a Predicate Offence. Therefore, prima­facie his arrest is completely illegal. Therefore, question of attracting stringent twin conditions under Sec.45(1) of the PML Act does not arise. Even otherwise, in the background of above detailed discussion, I hold that he(A3) has satisfied the rigors, if any, of the twin conditions under Sec.45 PML Act. A person who is wrongfully and illegally arrested is certainly entitled to get bail. 88. It is material to note that the Ld. Sessions Judge while granting bail to the Applicant(A3) in the crime relating to the Scheduled Offences Crime, in his order dt.21.03.2022 in Bail Application No.831 of 2020 clearly held firstly that, from the amount misappropriated out of redevelopment work, no amount is deposited in the bank account of the Applicant(A3). Secondly, the applicant has not signed any agreement with any developer. Thirdly, since 2010, the applicant has not participated any transaction and Fourthly, the Applicant(A3) is not signatory of any bank transaction. Admittedly, EOW and even ED had not challenged the said Bail Order and allowed it to become absolute. These observa....
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....vt. Ltd. (A4), has cheated MHADA by floating the proposal for redevelopment of the land belonging the MHADA and including MHADA to enter into contractual arrangement for rehabilitation of the tenants. Thereby GACPL obtained permissions from MHADA to enter upon MHADA land and carry out development activities but the Developer sold the FSI of the free sale component and created third party rights on the land belonging to MHADA. It is further alleged that the said 47 acres land at Patra Chawl, Goregon belongs to MHADA and there were 672 tenants in the said plot. Various permissions, approvals and additional FSIs were obtained by M/s GACPL. The Proceeds Of Crime (POC) were generated from the predicate offences mentioned in the FIR No.22/2018 dt.13.03.2018. Rakeshkumar Wadhawan (A1), Sarang Wadhawan (A2) and Pravin Raut (A3) all the Directors of M/s GACPL and Others sold FSI and generated POC of Rs.1039.79 Crore, instead of utilizing this collected amount of Rs.1039.79 Crore in constructions of flats for the tenants and MHADA. Rakesh Wadhawan (A1)and Sarang Wadhawan (A2) had diverted majority amounts to various accounts of their Companies. Both Rakesh Wadhawan (A1) and Sarang Wadhawan(A....
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....Wadhawan(A1) Sarang Wadhawan(A2) and Pravin Raut (A3) knowing indulged in laundering the Proceeds Of Crime as defined under Sec.3 of the PML Act. This is the basic case of ED against Sanjay Raut (A5) and highlighted portion is the gist thereof. BRIEF SUMMARY OF INVESTIGATION ALLEGED IN THE PARAGRAPH 10 OF THE SUPPLEMENTARY COMPLAINT. 93. 672 tenants relating to Patra Chawl Project were to receive rent till they get the possession of the flats constructed by the developers, and accordingly got the same till 2016­17. But thereafter developer stopped paying the rents. Many tenants opted to settle their dues by selling their tenements as they were not ready to wait. Rakesh Kumar Wadhawan (A1), Sarang Wadhawan (A2), Pravin Raut (A3), Sanjay Raut(A5) conspired and indulged in the offence of money laundering. On 12.08.2006 the then Union Agriculture Minister had desired a discussion at Y.B. Chavan Center, regarding redevelopment scheme for Siddharth Nagar, EWS Row Houses/Tenements at Goregaon. Secretary, Housing and Chief Officer Board, participated the said discussion. Sanjay Raut(A5) and Mr. Thakkar were present in the meeting. Besides that Sanjay Raut(A5) also participated the Ch....
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....TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.5 & 6. 4,00,000/­ 36,00,000 4. Girja Shanker Shukla Village Kihim, TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.7 4,00,000/­ 24,00,000 5. Sridhar Balkrishna Edekar Village Kihim, TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.8. 7,00,000/­ 38,00,000 6. Avinash Shriam Deshpande Village Kihim, TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.11. 7,00,000/­ 30,00,000 7. Avinash Shriam Deshpande Village Kihim, TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.12. 10,00,000/­ 8. Bharat Vijay Ushirkar Village Kihim, TalAlibag, Dist. Raigad, Gunta No.508 & 540, Plot No.13. 5,00,000/­ 24,00,000 2,04,00,000 95. Mr. Dhananjay Lendhe claimed that he received Rs.5 Lakh from Sanjay Raut and on depositing it in the bank he issued cheque of Rs.5 Lakh to Mrs. Varsha Raut. Sanjay Raut(A5) claimed that, he received a loan of Rs.12,41,100/­ from Kantibhai, Dadar, but no such person was identified. Bank Account revealed that the subject amount was received from the account of G'Diam Jewells, Opera House, when no such company in the name o....
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....tent of Rs.3,27,85,475/from GACPL. Apart from this he(A5) has also received huge cash through Pravin Raut(A3) and/or Rakesh(A1), Sarang(A2). 96. This is the case pleaded in the Supplementary Complaint in addition to the case alleged in the Main Complaint against Sanjay Raut. The same is reproduced as mentioned at page 50 to 55 of the Supplementary Complaint. 97. GROUNDS FOR CLAIMING BAIL. a. The applicant (A5) is nowhere connected to M/s GACPL or HDIL or Patra Chawl Project in any manner. b. He is a Member of Parliament (Rajyasabha) for more than 18 years and Senior Leader of the Shivsena Party and also holds a Diplomatic Pass­Port. c. He is the Executive Editor of Newspaper SAMANA which is mouth piece of the Shivsena Party and as such is a well respected person having deep roots in the Society. d. The present case is perfect example of abuse of powers and Political Vendetta and he is victimized to forcibly crush the opposition faced by the ruling party. e. Existence of a tripartite agreement dt.10.04.2008 is an admitted fact whereby M/s GACPL was authorized to redevelop the 47 Acres of land belonging to MHADA being CTS No.260,260/1 to 100,261 to 104, 264, 264/1 to ....
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....375/­ allegedly received by him (A5) from Avani Infrastructure in fact was never received by him and the same is only a booked profit in the books of the Company and never received by the Applicant and his family. o. Reply filed by the EOW, Mumbai to the Bail Application of Pravin Raut (A3) (after his arrest on 13.02.2020), is with contention that a third party being "Grat Thonrton" conducted forensic audit of the accounts of the Company and came to a conclusion that Pravin Raut (A3) had not signed any agreement with the 9 Developers to whom the said free sale component was sold and also that from the amount allegedly misappropriated out of the redevelopment work, no amount is deposited in the account of Mr. Pravin Raut (A3). All this demonstrates that alleged misappropriated funds had never received in the account of Pravin Raut (A3), hence the question of Applicant (A5) receiving any POC from Pravin Raut (A3) does not arise at all and the entire case against the Applicant(A5) becomes baseless, illegal and devoid of merits. p. Order dt.21.03.2020 passed by the Sessions Court gives a fatal blow to the entire case against the Applicant(A5). q. If money received by Pravin R....
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....he Supplementary Complaint. Accordingly, Ld. Sr.Counsel Mr. Mundergi argued each and every point alleged in the Supplementary Complaint and also filed written submissions (Exh.19). Thereafter, Ld. A.S.G. Mr. Anil Singh thoroughly argued for two long sessions on various points contended in the written submissions(Exh.19). Not only this but also ED filed their detailed rejoinder written submissions (Exh.20) on 02.11.2022 which runs into 34 pages. In this way, ED has availed an opportunity to rebut or refute whatever argued by Ld. Sr. Counsel Mr. Ashok Mundergi and Mr. Vikrant Sabne. Basically the question involved in law relating to the bail relates to the right to liberty of a person which is a fundamental right of everyone. If a person like Accused No.5 avails particular mode of presenting his case, argument and ED has orally as well as by written submissions (Exh.20) rejoined, rebutted and refuted it, there is absolutely no substance in raising such technical dispute particularly when the right to liberty of an arrested person is on stake. Therefore, such technicalities and technical objection raised by ED cannot debar the accused to argue the merits of the allegations made in the....
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....aint by keeping himself behind the curtain. 102. In the aforesaid background and for the detailed reasons in respect of Bail Application (Exh.8) of Pravin Raut (A3) basically Sanjay Raut(A5) is entitled to get bail without a word of further discussion. It is because there are no POC nor Pravin Raut(A3) had any role in generating POC and laundering the same. Nor he(A3) had indulged into any criminal activity relating to Scheduled Offence in order to attract Ss.420, 120B IPC (Predicate Offences) r.w. Ss.2(1)(u) and 3 of the PML Act. On this count itself it is prima­facie glaringly evident that the Applicant(A5) was neither arrested for any activity relating to Scheduled Offence nor involved in any process of generating POC, placing, layering and integration thereof. All the reasons exhaustively discussed in the bail order of Pravin Raut (A3) (supra) are applicable to the case of Sanjay Raut(A5). Failure of ED to prima­facie bring the case of Sanjay Raut(A5) under the stringent twin conditions, automatically benefits his (A5) case. In this way, I am of the firm opinion that, Sanjay Raut(A5) is entitled to be released on various contentions raised in the Main PC against Pravin....
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.... and was able to sell FSI to developers due to his proximity with Sanjay Raut(A5). h. Cash worth Rs.13.06 Cr. was withdrawn from the account of GACPL(A4) by Rakesh Kumar Wadhawan (A1) and Sarang Wadhawan (A2). Sanjay Raut(A5) has been connected with the purported POC by stating as, "Sanjay Raut has acquired many assets during the period the poc was siphoned off and also cash amount has been used by Sanjay Raut for acquiring some of these assets and also for meeting various personal expenses" In this way in Supplementary Complaint it is alleged that, Accused No.1 to 3 and 5 conspired and indulged in the offence of money laundering. 104. I carefully examined these allegations made in the Supplementary Complaint and argument of Ld. A.S.G. Mr. Anil Singh, based on the say to the bail application as well as rejoinders to the written submissions of Sanjay Raut(A5). All this prima­facie demonstrates that statement of Mr. Chandan Kelekar is the sole basis on which Sanjay Raut(A5) is connected and fastened to Siddharth Nagar Project. It is his bald and bare words regarding two meetings highlighted and referred above, wherein the then Union Agriculture Minister and the Chief Minister....
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....e case for bail, certainly we cannot forget the character and quality of the material required and prescribed under Sec.45(1)(i)(ii) of the PML Act. I strongly feel that, unless the quality and character of material is assessed, parameters for assessment of applicability of twin conditions, questions relating to prima­facie satisfaction - dissatisfaction of the twin conditions under Sec.45(1)(i) (ii) of the PML Act, cannot be resolved. Ratio of recent authority of the Hon'ble Bombay High Court in the case of Anil Vasantrao Deshmukh Vs. Stae of Maharashtra (Bail Application No.1021 of 2022, decided on 04.11.2022), wherein Vijay Madanlal Choudhary and others Vs. Union of India and others, [Special Leave Petition (Criminal) No.4634 of 2014, decided on 27.07.2022] is also relied upon, lays down that, character and quality of statements can certainly be seen at the stage of bail. 107. Apart from this, I am of the firm opinion that, simply provision under Sec.50(2) and (3) of the PML Act gives certain importance and weightage to the statements, does not mean that, such statements are straight way binding on the Court, whatever its quality may be. And, the Court is debarred to lo....
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....DIL and Pravin Raut entered the project together in the year 2006...." "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, Shri Gavas, the MHADA Officers viz T. Chandrashekhar (V.P.), Chief Officer, Legal Adviser, Chief Engineer, Chief Architect were present. On being asked I state, I was also present in the meeting being the project Architect. After understanding the financial implications in this Project, Shri Vilasrao Deshmukh suggested that the proposal should be first concluded in the MHADA Authority meeting and thereafter to be forwarded to the Govt. for its approval. On being asked if any minutes were prepared for the meeting I state that no minutes were prepared only directions were given to get the proposal sanctioned from the authority." 109. His (Chandan Kelekar's) above statement dt.25.08.2022 prima­facie indicates that he....
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....his amount is out of Rs.95 Cr./ Rs.100 Cr. / Rs.112 Cr. allegedly generated by Pravin Raut (A3) and thereafter, further laundered. I have already made an exhaustive discussion and noted the miserable failure of the ED to prima­facie establish the said amounts being POC. I have also noted how, the ED has made approbate and reprobate in respect of Rs.95 Cr. by saying on one hand having generated from selling FSI free sale component and on another hand saying the same having received from illegal loan obtained by Wadhawans from the PMC. This failure itself leaves nothing to prima-facie prove by Sanjay Raut(A5). 113. Various amounts are quoted by ED in the Supplementary Complaint and written submissions in rejoinder. But it is necessary to examine whether it has any nexus with the POC as defined under Sec.2(1)(u) r.w. Sec.3 of the PML Act. I have already noted above how is the statement of Mr.Chandan Kelekar and the quality thereof. Except this, regarding various other entries of money flow claimed by the ED is also based on the statements of various other witnesses and further contention of ED how the same was unaccounted but found with Sanjay Raut(A5). It is also necessary to ex....
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....he same statements Ms. Swapna Patkar further claims that, she had paid Rs.50 Lakh to Sanjay Raut(A5), regarding the registered cost of the plot at Alibaug. In her statement dt.01.09.2021 she specifically states that, she is not aware of the market value of the property, but it may be around Rs.10 Crore. She further states that she had never met the land owner and all negotiations were done by Mr. Sujit Patkar and Sanjay Raut(A5) and that the amount over and above the registered value was also dealt with by them and she only went for signing at Registration Office. In her third statement dt.23.12.2021 she claims that her husband Mr. Sujit Patkar was coordinating all the land owners for cash. He was handling cash on behalf of Sanjay Raut(A5). He was the person who was collecting cash and handing over the same to the land owners. She had witnessed too many of these discussions between Sujit Patkar and land owners. On the contrary in answer to Question No.3 (page 180 Vol.II), she states that as regard the source of money of Sujit Patkar, only he can explain, which is deviating from her earlier statement wherein she states that Sujit Patkar was handling cash on behalf of Sanjay Raut(A5)....
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....r statement dt.23.08.2022 she states that, she has not interacted directly with any seller and had not met any of the sellers before or after registration of the property and have only seen them at the time of registration and she had not given any cash to any of the sellers nor came in contact with them. On page 193 (Vol.II) she clearly states that she has no role to pay in the Resort at any stage of planning and execution. In this way all five statements of Ms. Swapna Patkar prima­facie indicate that her role was only to visit the office of registration and sign the execution of documents only. It is her own contention that, except this, she has no knowledge of anything, yet she states that whatever amount received by Sanjay Raut(A5) was from Patra Chawl project and her husband received the same from him(A5) and thereafter the properties were purchased. All this speaks volumes about her conduct and ED's reliance on her statements. Therefore, quality of material with which she has stated as such, is an important consideration at the stage of bail application. All this prima­facie raises question about quality of her statement, particularly at page No.177, 178, question....
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....al liberty of Accused No.5. 121. Amol Khale is one of the sellers of those plots which were allegedly purchased by Sanjay Raut(A5) with the help of POC. His statement dt.04.02.2022 refers that he had not received cash but entire payment was made in cheque. Whereas, in his another statement dt.05.08.2022 he states that, Rs.8 Lakh he received through cheque and Rs.34 Lakh in cash. He clearly states that, his brother Dilip Khale was paid through cheque. Whereas, while answering question No.13 on page 45 he states that, he was restricted to sell the said properties as per wish of his deceased Cousin he executed and he is completely unaware about any cash transaction. Stepping ahead while answering question No.9 (Page 54) he states that, 8.83 Gunthas mentioned is the exact land sold for which his brother might have received Rs.34 Lakh above the cheque amount of Rs.8 Lakh. Bare reading thereof prima­facie indicates that, his statement as such is self-contradictory to his statement dt.04.02.2022. 122. Smt. Shubhangi Patil is stating the facts which are within the knowledge of her deceased father. She states (question No.5, page 74) that, Sanjay Raut(A5) had paid the registered amoun....
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....22/2018 for the facts and circumstances allegedly taken place during 2007­11. 126. The second limb of contention of the ED is that Pravin Raut (A3) received Rs.95 Cr./Rs.100 Cr/ Rs.112 Cr being POC generated by Wadhawans for HDIL by raising illegal loans from the PMLC bank and keeping huge thereof outstanding. This another contention of ED itself demolishes their first contention that Pravin Raut (A3) had not generated any POC as alleged in the FIR. Therefore, prima­facie on both counts, there is no case to hold that, there were any POC as alleged, the same was generated by Pravin Raut (A3) or he obtained the part of POC (Rs.112 Cr.) from Wadhawans through their illegal bank loans and subsequently a meager part thereof was received by Sanjay Raut(A5) having clear knowledge that he had been dealing with the POC generated from the criminal activity relating to Scheduled Offence. 127. Basically there is no POC nor any Scheduled Offence in order to attract provision under Sec.2(1)(u) r.w. Sec.3 of the PML Act. Apart from this, prima­facie there is absolutely nothing to show that whatever received by Sanjay Raut(A5) is POC. Recently the Hon'ble Bombay High Court, in th....
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....wat Bank had transferred Rs.17,10,000/­ on 08.10.2011 and from the bank account in Kurla Nagrik Bank, Mrs. Varsha Raut had transferred Rs.12,40,000/­. In this way prima­facie he has given account of the money transfers which corroborate the contention of the applicant(A5). Question No.7 is put to him specifically asking as to how there was an extra amount of Rs.37.75 Lakh in addition to the original investment, was paid to Sanjay Raut and Mrs. Varsha Raut within one month of the investment, although the project was not started. However, he has stated that he is a small shareholder amongst the shareholder, holding shares of 5%. Most of the decisions of the company were taken by Pravin Raut(A3) who possessing major shares i.e.70% stake and he had paid the said amount as per the instruction of Pravin Raut (A3). He has specifically stated that, he does not know the reason why Pravin Raut (A3) decided to pay the extra amount to Sanjay Raut(A5) Mrs. Varsha Raut. He was further asked in a leading way, whether these transactions are done by Pravin Raut (A3) in his personal capacity and whether in lieu of these transactions any benefit was received by the company person and he w....
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....thmesh Developers LLP, wherein Pravin Raut was 70% shareholder, it cannot be said that the same is an incriminating material to prima­facie establish with POC. Many statements and even ED has also not disputed long friendship of Pravin Raut (A3) and Sanjay Raut(A5) and their close family relations. It is also an admitted fact that, Pravin Raut (A3) is in the business of real estate, builder and developer, even since 2000 onwards. Considering their close family relations if he purchases vehicle in the name of Ramji Veera and allows the same for the use of Sanjay Raut(A5) alongwith policy documents, can it be straight way said that it is POC generated from the criminal activities relating to Scheduled Offence or a property purchased from the POC? 132. In the same way ED has made a case that Pravin Raut from the POC arranged foreign trips for Sanjay Raut(A5) and his family. Even certain facts are on record. These two close families had travelled at the relevant time. Merely Pravin Raut (A3) could not give the account of money relating to travel tickets, for want of remembrance, can it be straight way connected with POC or the criminal activity relating to Scheduled Offence? Basic....
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....ven at the stage of bail as held by the Hon'ble High Court recently in the case of Anil Vasantrao Deshmukh (supra). 135. At the cost of repetition in order to point out the quality of the material relating to the statements, it is necessary to note that, in the statement of Amol Khale dt.04.02.2022 verification note was taken in his handwriting as to how he submitted the said statement voluntarily being true without any force, pressure and coercion. In some statements such verification is not appearing. It is material to note that, another witness Vijay Ushirkar in his previous statement dt.04.02.2022 specifically denied having received any cash for his land deal, but subsequently recently on 07.09.2022 in order to bring this fact in support of ED, question No.2 was put to him as to why he denied having received cash, in his statement dt.04.02.2022? At this time he states that at the time of his previous statement he was under fear, hence stated one thing and now on 07.09.2022 stating something contradictory to his statement dt.04.02.2022. How such material can be straight way accepted to uphold the contention of ED, even if statements under Sec.50 carry importance? Whether th....
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....d how the ED has not arraigned Ms. Swapna Patkar as accused nor arrested her when their own allegations in the complaint and materials available through her statements prima­facie demonstrate that, she had dealt with POC with alleged knowledge thereof. 138. ED has made much capital about alleged threats given by Sanjay Raut(A5) to Ms. Swapna Patkar and contended that Accused No.5 is an influential person, hence cannot be released on bail. It is material to note that, Ld. Sr. Counsel Mr. Mundergi placed reliance on the copy of FIR No.794/2022 dt.31.07.2022 registered at 20.00 hours at Vakola Police Station under Ss.504, 506, 509 IPC for the alleged incident/offence dt.22.11.2016, which itself speaks volumes. The most important thing is that Deputy Commissioner of Police, Zone­VIII, Mumbai, submitted his long report to the Registrar, National Commission for Women, New Delhi, on 26.08.2020 with conclusion of investigation as follows, "20. As far as matters reported to the police, necessary legal action as per law has already been taken by Vakola, Mahim and Manor Police Stations and are either pending before the competent court or are pending investigation. The allegations m....
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....ney involved in the offence of money­laundering is necessarily the proceeds of crime, arising out of a criminal activity in relation to the scheduled offence enlisted in the Schedule of the Act. Hence, the essential ingredients for the offence of Section 3 of the PMLA 2002 become : i) The proceeds of crime ii) Proceeds of crime arising out of the offences specified in schedule of the Act; iii) Factum of offence while committing the offence of money laundering. 33. Further it is clear that the allegations must be proved beyond reasonable doubt and the Court cannot proceed on the basis of preponderance of probabilities. Unless the allegations are substantiated by the authorities and proved against a person in the Court of law, the person is innocent. 34. Thus, in this case, to consider whether there is any reasonable ground to believe that the applicant is guilty of alleged crime, it is necessary to examine whether the alleged property being proceeds of crime, derived or obtained, directly or indirectly by the applicant as a result of criminal activity relating to a scheduled offence? 45. The expression "proceeds of crime" is defined under clause (u) of Section 2(1) ....
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.... entitled to get bail are necessary to be discussed which are as follows, ILLEGAL ARREST OF BOTH ACCUSED AS AN OUTCOME OF PICK AND CHOOSE STRATEGY. Prime and main object of the PML Act is 'Confiscation' and not an illegal arrest and detention of arrestee for uncertain period. Admittedly, in the instant case ED has attached properties of Pravin Raut (A3) worth Rs.72 Crore and properties of Sanjay Raut(A5) more than the claim of the money­laundering. I have already noted above, only bald and bare words of Chandan Kelekar alleging two meetings with the then Union Agriculture Minister and the then Chief Minister of Maharashtra, caused arrest of Sanjay Raut(A5) and formed basis for Supplementary Complaint. High level MHADA and Government officials had participated the said meetings as per Mr. Chandan Kelekar. Yet, none of them is made accused or even arrested, in spite of suspicious conduct of MHADA throughout right from 2007 till date. However, only Sanjay Raut(A5) was arrested. Skipping all officials of MHADA and Government i.e. T. Chandrashekhar etc, referred by Mr.Chandan Kelekar, Wadhawans and Ms. Swapna Patkar, is nothing but conveying a message to the then Union Agr....
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.... project, caused due to misdeeds of Rakesh Kumar Wadhawan (A1), Sarang Wadhawan (A2) and their HDIL, which too was acknowledged by the Hon'ble High Court. Yet, Pravin Raut (A3) and Sanjay Raut(A5) were arrested for the same. It is also a clear case of ED that initially there was huge amount of POC Rs.1039.79 Crore and hardly 10% thereof i.e. Rs.95 Cr./Rs.100 Cr/Rs.112 Cr. had come to Pravin Raut (A3) and very meager, approximately 1% of the said Rs.112 Cr., Sanjay Raut(A5) allegedly received Rs.1,06,44,375 (Main PC) and Rs.3,27,85,475 (as per Supplementary Complaint). Admittedly, their (A3 and A5) properties were attached by ED under PAO. ED has also taken a self­destructive stand that Pravin Raut (A3) received POC Rs.95 Crore from the illegal outstanding huge loan raised by Wadhawans and their HDIL from PMC Bank. 143. It is an astonishing admitted fact that Rakesh (A1) and Sarang (A2) Wadhawans who not only generated huge Rs.1039.79 Crore, but also allegedly placed, layered and integrated the same, were never arrested by the ED I.O. under the power of Sec.19 of the PML Act. It is the ED who had filed many complaints/ECIRs relating to money laundering wherein these Wadhawa....
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....ut any qualifications required under Sec.19 of the PML Act. This itself is sufficient to release both the accused on bail. It is pertinent to note that after such unusual mid­night arrest of Sanjay Raut(A5) and even during the first ED custody period he(A5) was kept in a windowless room where only four walls were around him. Accused No.5 pointed out that he had undergone Angioplasty twice and there are six stents in his heart. He also made complaint before this Court, how he was kept in a room where there is absolutely no ventilation and how he is unable to sustain air­condition. It is only then due to the Court intervention he could get a room with some ventilation in ED custody. All this prima­facie indicates that his arrest is nothing but a witch­hunt and annihilation of his valuable rights. Ld. Counsel Mr. Aabad Ponda and Mr. Ashok Mundergi pointed out disparity committed by the ED while arresting both accused(A3 and A5) by leaving the main accused persons Rakesh(A1) and Sarang(A2) Wadhawans scot­free. When this disparity is brought to the notice of the Court, the Court is under legal obligation to make parity. This alone is sufficient to release both accuse....
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....e judgment right from the last decade. This Court has submitted a detailed report to the Hon'ble Principal Judge, regarding such modus­operandi availed by the ED in conducting trials. Every time explanation to Sec.44 of the PML Act stating that, "Further investigation is going on in each and every case" is capitalised. Even the cases wherein this Court has framed charge, could not record evidence more than one­two pages. In this way, the extra­ordinary pace with which ED arrests accused becomes not even a snail speed in conducting trials. It appears that ED knows only Ss.19 and 45 of the PML Act, but forgets that there is a provision for trial of an offence under PML Act as per Sec.44 thereof. It is unfortunate that even this Court is forgetting that evidence has to be recorded, trials have to be conducted and judgments are to be delivered even in the PMLA special cases. There is absolutely not a single judgment after a complete trial in this Court right from the beginning and during the tenure of my all Ld. Predecessors. Is ED not accountable for such modus­operandi availed by them in not beginning and concluding a single trial? I have already noted above how E....
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....c. but the same cannot presumably bring him and fasten with the Proceeds of Crime when the ED is duty bound to prima­facie establish the existence of POC generated by a criminal activity relating to the Scheduled Offence. This vital element is absent in the case of both the accused (A3 and A5) for detaining them in judicial custody by rejecting their bail applications. 150. This is a fact that eversince Pravin Raut (A3) was granted bail in the Scheduled Offence, he has not committed breach of any conditions imposed by the then Court. Similarly Sanjay Raut(A5) is a Member of Parliament (Rajya Sabha) and there is no likelihood of fleeing from justice and absconding. In the background of all detailed discussion in respect of bail applications of Pravin Raut (A3) and Sanjay Raut(A5) on giving opportunity to the Ld. A.S.G. Mr. Anil Singh and Ld. S.P.P Mr. Hiten Venegavkar and opposing these applications by them, this Court is satisfied that there are reasonable grounds for believing that both accused (A3 and A5) are not guilty of such offence and that they are not likely to commit offence while on bail. 151. Ld. A.S.G. Mr. Anil Singh placed his reliance on following authorities, ....
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.... the ED Investigating Officers under Sec.19 of the PML Act, is ab­initio illegal. Hence, on this count alone the question of attracting rigors of stringent twin conditions under Sec.45(1)(i)(ii) of the PML Act does not arise and both accused cannot be detained in the judicial custody henceforth, for the same. ii. Simply labeling pure civil disputes with "money­laundering" or "an Economic Offence" itself cannot automatically acquire such status and ultimately drag an innocent person in a miserable situation in the guise of arrest under Sec.19 and stringent twin conditions of Sec.45(1)(i)(ii) of the PML Act. THE Court has to do what is right irrespective of who is before it. iii. From the records materials and the detailed discussion made above, it is clear how Pravin Raut (A3) is arrested for a pure civil litigation, whereas Sanjay Raut(A5) for no reason. This truth is glaring. The Court is under legal obligation and duty to find out truth even at the stage of bail. The Hon'ble Supreme Court time and again laid down, "Truth is the guiding star. Criminal trial is voyage of discovery of truth. The truth alone triumphs and every endeavour has to be made by the Court to ....
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....nd A5) behind bars for an uncertain period. x. Like the laudable object of the PML Act casting duty on the Court to safeguard it, equally the court is protector of rights of accused and innocent persons who are illegally arrested. The Court cannot become predator of such valuable rights of the accused, but is duty bound to be a protector thereof as laid down by the Hon'ble Supreme Court. If the Court ignores this aspect, where the people will go for justice? xi. This Court being the Court of First Instance has great responsibility of not committing a slightest mistake which will turn into miscarriage of justice. Therefore, this Court has taken a thorough survey of the available records/materials within four corners of the limits required to resolve this question relating to the twin conditions and only thereafter, arrived at such conclusion by not transgressing the boundaries and not committing any mini­trial. xii. In PMLA bail matters, orders become long and run into at least around 40­50 pages, does not mean that Court has done minitrial as argued by the Ld. A.S.G. Mr. Anil Singh. On the contrary the stringent twin conditions under Sec.45(1)(i)(ii) of the PML Ac....