The Enforcement Directorate has “illegally” arrested MP Sanjay Raut, one of former Maharashtra Prime Minister Uddhav Thackeray’s closest allies, in the Patra Chawl money laundering case, according to the PMLA Special Court in its detailed order for his release on bail.
Special Judge MG Deshpande pulled no punches to claim that Pravin Raut was arrested over a civil dispute while Sanjay Raut was arrested “without cause”. “This truth is glaring” he said.
Significantly, the Chamber considered that a civil proceeding was the reason for her arrest, which was not a predicate offence.
“A1, A2 (Wadhawans) and their HDIL unequivocally admitted their misdeeds caused delays and the same was recognized by the Hon’ble High Court when MHADA agreed as well. All of this was ignored by ED, causing the arrest of both defendants through extreme use of force. In this way, both were unlawfully arrested under Section 19 of the PML Act.”
“Simply labeling purely civil disputes “money laundering” or “white-collar crime” cannot automatically acquire such status and ultimately expose an innocent person under the guise of arrest under Section 19 and the strict dual requirement of Section 45(i)(ii). by PMLA. The court must do the right thing, regardless of who is before it,’ added the judge.
ED’s case is that Pravin Raut became a director of a company called Guru Ashish Constructions Pvt. Ltd (GACPL) which was responsible for illegally selling the free components of the Patra Chawl rehabilitation project in Goregaon, even as hundreds of residents continue to wait for homes. The ED claimed that Sanjay Raut received Rs through his “deputy” Pravin. 3.27 crore as proceeds of crime and laundered.
Raut was arrested on July 31, 2022 and charged with committing offenses under Section 3 in conjunction with Section 2(1)(u) of the Anti-Money Laundering Act of 2002 (PMLA).
In his conclusion, Special Judge MG Deshpande found their arrest illegal because the ED had failed to arrest HDIL builders Sarang and Rakesh Wadhwan, who were the main defendants in the case. As well as MHADA officials who may be involved.
“I believe that both defendants were essentially arrested illegally. Both are entitled to parity given the disparity made by the ED in failing to apprehend the key defendants Rakesh and Sarang, their HDIL, MHADA and government officials responsible for misdeeds by the Wadhawans at the appropriate time.”
The judge highlighted the ED’s shifting position, after which the agency first claimed that the Wadhawans and Pravin were the primary suspects, and later attributed the role of “principal defendant” to Raut.
The court said an innocent person could not be brought into litigation in the name of money laundering and ruled that the dual conditions for granting bail did not apply to her case.
The judge found MHADA’s conduct suspicious from the start, as if he had filed an FIR in 2018 relating to cases from 2006 through 2013, noting that the ED has not yet convicted its staff and defendants.
“As such, MHADA’s stance of bringing in FIR No. 22 of 2018 on a fine morning cannot throw dust in the Court’s eyes, nor wipe and wash away lengthy civil lawsuits recognized even by the Hon’ble High Court. Therefore, this court cannot join the chorus of ED and MHADA.”
The court found that the Wadhwans had accepted their role and misdeeds in affidavits but were left “bulk-free” by ED. “All of this clearly shows the inequality, the pick-and-choose attitude of the ED, and the court cannot value the same, but is legally obliged to establish parity.”
Finally, the judge said that if he still accepted ED and MHADA’s claim and denied bail, that would amount to putting a premium on such agency pick-and-choose strategies. “Surely in this case every common man, innocent and honest people will lose the faith and trust they placed in the judicial system as a temple of justice. Therefore, the legal principles that guide the Court cannot be ignored.”
While the judge found PMLA’s goal commendable, it was the court’s duty to protect it. “Likewise, the court protects the rights of the accused and innocent persons who have been unlawfully arrested. The Court cannot deprive the accused of such valuable rights, but has a duty to protect them, as determined by the Hon’ble Supreme Court. If the court ignores this aspect, where will the people go for justice?”
Shortly after the order was announced, the ED approached Bombay High Court bench Bharati Dangre, who agreed to hear her appeal tomorrow but refused to stay the bail order.