ED to Bombay HC: Special PMLA Court’s Calls Out Remarks in Sanjay Raut’s Bail Order ‘Unreasoned’

Sakina Tashrifwala

Published on 20 November 2022 at 22:07 IST

The Enforcement Directorate has stated that the Special PMLA Court’s harsh criticism of the ED while giving bail to Shiv Sena MP Sanjay Raut was “unreasonable,” “demonstrates a lack of application of mind,” and has a “chilling effect” on the ED’s morale as an investigative body.

The ED called the Raut’s arrest a “witch hunt”, the ED continued, “would not only be contradictory to the evidence but also send the wrong message regarding the integrity and proficiency of the Enforcement Directorate.” It demanded that all criticism of the agency be removed.

“The Hon’ble Special Court’s conclusions are illogical and show a lack of use of the judicial mind, and the court has taken into account considerable amounts of extraneous material while neglecting the important evidence.”

“It is also clear that the grant of bail is founded on legal and factual premises that cannot be supported. As a result, it is clear that the order in question has significant flaws that seriously and irreparably harm the cause of justice.”

On July 31, 2022, Raut was detained on suspicion of violating Section 3 r/w Section 2(1) (u) of the Prevention of Money Laundering Act in connection with the Patra Chawl Scam. On November 9, when he was granted bail, Special Judge MG Deshpande referred to his arrest by the ED as “illegal” and “for no cause at all.” The court also made comments regarding ED’s selective arrests of people at a breakneck rate and slow-moving proceedings.

The ED has asked the HC to revoke the bail that was given to him and to clear its name of any criticism.

ED stated that, “it is a prerogative and discretion of the investigative agency” in response to the courts criticism of the agencies adoption of a selective policy for arrests.

The ED stated that the relevant court had previously taken cognizance of the predicate offence in response to the court’s comments that there was no predicate offence to file a PMLA Case and, hence, no alleged laundering. Additionally, the special court “overreached” itself because it was against the law for the tribunal to throw out the predicate offence.

It is contended that when the Hon. the Special Judge examines a request for bail connected to the money laundering offence, his observations and the entirety of the inquiry are outside of his jurisdiction.

According to the ED, Raut, a co-suspected in the case who was also granted bail along with Sanjay Raut, was the director of the company that is accused of committing the scheduled offence and that Raut obtained the funds through defrauding low-income slum dwellers through HDIL. The organization claims that the bail decision neglects a number of these considerations.

The Special Court further criticised MHADA for joining the case as a complainant at a late stage in 2018, even though the alleged fraud was allegedly committed between 2007 and 2011. The ED was also criticised for failing to apprehend the main suspects, HDIL promoters Rakesh and Sarang Wadhawan.

According to the ED, the SC ruling in Vijay Chaudhary made it clear that the date on which the tainted funds are acquired is significant, not the date on which the predicate offence was committed.

“The entire finding on the conduct of MHADA is not only misconceived and unjustified but made behind the back of and without even noticing (issuing a notice to) MHADA,” the ED claimed, adding that this is in line with the SC ruling.

The ED stated that the observations made by the HC in an ongoing civil lawsuit involving the same redevelopment project were irrelevant to the current issue. The only thing the HC’s observations demonstrate is that the tenants of Patra Chawl gave their agreement for redevelopment, and the tenements were destroyed, which supports the claim that the purpose was always to defraud and monetize the flats by selling them for market value.

Regarding the Wadhwans’ non-arrest, the ED said that the couple had already been detained by the CBI and had given recorded statements. The agency highlighted that the Constitution “does not contemplate the concept of negative equality.”

Observations made by the special court criticising how ED handles its investigations and bail requests “are unjustified and will likely have a demoralising effect on the Enforcement Directorate as an investigative organisation. Therefore, the assailed decree should be amended to remove these observations.”

According to ED, the Hon’ble Special Court overstepped its bounds by attempting to determine the truth and legality of the predicate offence.

The ED proclaimed that because Raut had not objected to his remand applications, his arrest could not be considered unlawful. In addition to remanding Raut in ED’s custody, Special Judge MG Deshpande, who now alleges the arrest was “illegal,” had also taken cognisance of the agency’s charge sheet, according to ED.

ED asserted that Sanjay Raut attended meetings where the then-Union Agricultural Minister and the then Chief Minister, together with other government representatives, made decisions about the redevelopment of Patra Chawl to show his involvement in the Patra Chawl fraud from its start.

The Special Court had questioned why Sanjay and Pravin Raut were the only two accused individuals among the government and MHADA representatives present at the meetings.

The ED stated, “It is claimed that these observations are not only misguided but also unrelated to the subject matter of the current proceedings and, most definitely, would not support expanding the current Applicants on bail.”

The Special Court, in the eyes of the ED, gave disproportionate weight to Swapna Patkar’s alleged fabrication, one of the key witnesses in the case.

The ED stated, “These observations have no bearing on the statements made by her and recorded by the Investigating agency under the provisions of the PMLA which indicate the infusion of cash amounts by or at the instance of the Applicant Sanjay Raut which are acquired from the proceeds of crime arising out of the Patra Chawl fraud.”

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