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New Delhi: The arrest of Shiv Sena MP Sanjay Raut in a money laundering case by the Enforcement Directorate (ED) was “illegal” and a “witch-hunt”, a Mumbai special court said on Wednesday while granting him bail in an alleged money laundering case.
It also questioned why the main accused in the case, Rakesh and Sarang Wadhawan of real estate firm HDIL, were never arrested by the ED.
It was an “astonishing admitted fact that main accused Rakesh and Sarang Wadhawan of HDIL, who had not only generated over Rs 1,000 crore, but also allegedly placed, layered and integrated the same, were never arrested by the ED,” it said.
The order was pronounced by the special judge for cases under the Prevention of Money Laundering Act, M.G. Deshpande.
Hours after the order, Raul walked out of jail. He was arrested on August 1. His aide Praveen Raut, who was arrested in February 2022, was also granted bail.
“I hold that both accused are basically arrested illegally. Both of them are entitled to parity in view of the disparity made by the ED in not arresting the main accused persons Rakesh and Sarang” and other government officials who were “responsible” for the misdeeds of the Wadhawans at the relevant time, the judge said.
The judge also slammed the ED, saying it arrests accused persons at an extraordinary pace but when it comes to conducting trials, “even a snail speed” is not observed.
What is the case?
The ED’s probe pertained to alleged financial irregularities in the redevelopment of the Patra Chawl, an area in suburban Goregaon, and related financial transactions involving Sanjay Raut’s wife and associates.
In 2008, the Maharashtra Housing and Area Development Authority, a government agency, assigned a redevelopment contract for the Chawl to Guru Ashish Construction Private Limited (GACPL), a sister company of HDIL.
The GACPL was supposed to build 672 flats for the tenants and also give some flats to MHADA. It was free to sell the remaining land to private developers.
But the tenants did not get a single flat in the last 14 years as the company did not redevelop the Patra Chawl and sold land parcels and Floor Space Index (FSI) to other builders for Rs 1,034 crore, as per the ED.
According to the Indian Express, the ED claims that Pravin Raut, an associate of Sanjay Raut, and other directors of GACPL were involved in this process. It claims that Pravin Raut received Rs 100 crore from HDIL and “diverted” it to various accounts of “his close associates, family member, his business entities”, which includes Sanjay Raut’s family.
The agency claimed that in 2010, Rs 83 lakh from the proceeds of the crime was transferred to Sanjay Raut’s wife Varsha Raut, who used the money to buy a flat in Dadar.
Raut and the Thackeray faction of Shiv Sena have long held that the case is baseless and have accused the ED of carrying out the BJP’s “political vendetta”.
The judge noted that the Wadhawans were arrested and could not secure bail to date in many other cases filed by the ED. “However, in the instant case considering the major role attributed to them which they have also admitted, yet ED has not arrested and allowed them to be scot free, for the reason best known to them(probe agency),” the judge said.
The ED arrested Pravin Raut purely for a “civil dispute” and Sanjay Raut for “no reasons”, it said.
“Basically, there was no reason nor any occasion to arrest both of them under section 19 of the PMLA for the allegations which are basically nothing but a civil dispute,” the court said.
Section 19 of PMLA grants the power to arrest any person to the concerned government officials.
“Simply labelling pure civil disputes with ‘money laundering’ 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 section 19 and stringent twin conditions of section 45(1)(i)(ii) of PMLA. The Court has to do what is right irrespective of who is before it,” the judge added, according to LiveLaw.
“There is absolutely nothing to show that right from the inception in 2006 -2007 Pravin Raut and Sanjay Raut entered the redevelopment project with an intention to fraudulently induce and cheat MHADA and 672 occupants thereof,” the court said.
Wadhawans and their firm, HDIL, had clearly admitted that their misdeeds caused delay and the same was acknowledged by the High Court when the MHADA too consented, said the judge. All this has been ignored by ED, he added.
Sanjay Raut had sought time to appear before the ED when it summoned him, but this could not be the reason to arrest him, said the court.
“Therefore, I am of the firm opinion that the arrest of both accused is basically illegal without any qualifications required under the provisions of PML Act,” it said.
It also referred to Sanjay Raut’s plea that he had undergone angioplasty twice and was kept in a room where there was no ventilation.
“It is only then due to the court intervention he could get a room with some ventilation in ED custody. All this prima- facie indicates that his arrest is nothing but a witch-hunt and annihilation of his valuable rights,” the judge said.
The court referred to the statement of a witness Chandan Kelekar who alleged there were two meetings regarding the redevelopment which were attended by then Union agriculture minister (Sharad Pawar) and then Maharashtra chief minister (Vilasrao Deshmukh); and this formed the basis for a supplementary complaint.
“Skipping all MHADA and government officials (from arrest) is nothing, but conveying a message to the then Union agriculture minister and then chief minister, creating a fear psyche in their mind that they are the next in this queue,” the court held.
The court also said there were no proceeds of crime in the case that could have attracted PMLA, nor was there any evidence that whatever received by Sanjay Raut was proceeds of crime.
The ED had not concluded “even a single trial right from the establishment of this designated court by leading evidence and the court could not give a single judgment right from the last decade,” the judge observed.
“…the extra ordinary pace with which ED arrests accused becomes not even a snail speed in conducting trials,” the court added.
According to LiveLaw, soon after the order was pronounced, the ED approached the Bombay high court, which agreed to hear the appeal on Thursday but refused to stay the bail order.
(With PTI inputs)
Note: This article was originally published at 2:02 pm on November 9, 2022 and republished at 8:50 pm on the same day with additional details.