Pravin Madhukar Raut Vs Directorate of Enforcement (Special Court Under P.M.L)
Special Court under the Prevention of Money Laundering Act, 2002 held that both the accused i.e. Sanjay Raut and Pravin Raut has been arrested illegally as both the accused have satisfied twin conditions under section 45(1)(i)(ii) of the Prevention of Money Laundering Act.
Facts-
Gist of contention of ED is that GACPL illegally sold the FSI to third party Developers and raised Rs1039.79 Crore/Rs.1048.96 Crore. Out of this amount Rs.147.17 Crore has been paid to Municipal Corporation, Greater Mumbai. GACPL through HDIL launched a project named ‘MEADOWS’ in 2010 at Patra Chawl, Goregaon and against bookings from 458 home buyers, an amount of Rs.138 Crore was collected. For illegal sale of FSI, the accused generated total amount of Rs.1039.79 Crore. Approximately Rs.1039.79 Crore were received in the bank account of GACPL, HDIL and its group Companies during 201014. Some part of these amounts were utilized in developing the project which remains incomplete. Whereas, most of the funds were siphoned off to various accounts. The company had availed term loans from Union Bank of India around Rs.100 Crore by way of NonConvertible debentures and around Rs.215 Crore from IL and FS Ltd. Some part of these amounts were utilized in developing the projects which remains incomplete. In this way the entire amount Rs.1039.79 Crore are illegally collected by unauthorized sale of FSI, is the Proceeds Of Crime as per Sec.2(1) (u) of the PML Act.
On the basis of these facts, various documents filed with the complaint and statements recorded under Sec.50(2) and (3) of the PML Act, ED resisted this application and contended to reject the same.
Conclusion-
Extreme and exceptional power of effecting arrest which ought to have been used very very sparingly, has been used by 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.
Held that both accused are basically arrested illegally. Both of them are entitled to parity in view of disparity made by the ED in not arresting the main accused persons Rakesh(A1), Sarang (A2), their HDIL, MHADA and Government Officials/staff responsible for misdeeds of A1 and A2 at the relevant time in 20062018. Apart from this, I also held that both accused have satisfied twin conditions under Sec.45(1)(i)(ii) of the PML Act. There is absolutely nothing before the Court that eversince Pravin Raut (A3) has been released on bail in a Scheduled Offence, he has committed any breach of the conditions imposed by the said Court. Similarly, whatever contended by ED against Sanjay Raut(A5) can be safeguarded by imposing certain conditions on him. Hence, there is no likelihood that both of them will likely to commit any offence while on bail.
FULL TEXT OF THE JUDGMENT/ORDER OF SPECIAL COURT UNDER THE P.M.L. ACT
1. Initially Pravin Raut (A3) was arrested and Main Prosecution Complaint was filed against him. His bail application was being heard eversince. In the meantime ED arrested Sanjay Raut (A5) and subsequently filed Supplementary Complaint against him. He had also filed Bail Application No.582 of 2022 during the pendency of the investigation. In this way when Supplementary Complaint against him was filed, bail applications of both i.e. Pravin Raut(A3) and Sanjay Raut(A5) were pending. Basic case of the Directorate of Enforcement (for short ‘ED’) in both i.e. Main and Supplementary Complaints is that, Pravin Raut (A3) was the Director of GACPL, who was responsible for selling free sale component, generated Proceeds of Crime (in short ‘POC’) Rs.95 Cr./ Rs.100 Cr./ Rs.112 Cr. and subsequently laundered it. The trail of the said money came to Sanjay Raut(A5) and his wife. This is the basic case pleaded in the Main and Supplementary Complaint. Therefore facts, circumstances of transaction and reasons required for discussion of bail application (Exh.8) of Pravin Raut(A5) are similar in respect of bail application Sanjay Raut(A5). In order to avoid multiplicity and length of separate orders, this Court finds it necessary to decide both applications by way of this common order; but with separate discussions wherein Bail Application (Exh.8) of Pravin Raut(A3) will be discussed first and thereafter, that of Sanjay Raut(A5).
2. Applicant Pravin Madhukar Raut in application (Exh.8) is Accused No.3 in this case, prayed for grant of bail contending his innocence and false implication. ED vide say (Exh.8A) strongly opposed the application alleging his active involvement in generation, placement, layering and integration of Proceeds Of Crime (POC), amounting a serious offence of money laundering. With this basic contention, ED contended to reject the application as in money laundering offence, ©Jail is Rule and Bail is Exception©.
3. Applicant in Bail Application No.582 of 2022 Sanjay Rajaram Raut is Accused No.5 in this case, prayed for grant of bail contending his innocence and false implication. ED vide say (Exh.2) strongly opposed the application alleging that the applicant(A5) is involved in the crime right from the beginning in the process of generation, placement, layering and integration of the Proceeds Of Crime and thus committed serious offence of Money Laundering under Sec.3 of the Prevention of Moneylaundering Act (for short ‘the PML Act’). It is specifically contended that for laundering money and the proceeds thereof Pravin Madhukar Raut (A3) acted as proxy and front man for Mr. Sanjay Raut(A5). It is also contended how the offence of Money Laundering is serious wherein ©Bail is Exception and Jail is Rule©. With this, it is contended to reject the application.
4. Heard Ld. Sr. Counsel Mr. Aabad Ponda for Pravin Raut(A3) and Ld. SPP Mr. Hiten Venegaonkar @ Ld. SPP Mrs. Kavita Patil at length for Bail Application Exh.8. Apart from this, Ld. Sr. Counsel Mr. Aabad Ponda filed written submissions (Exh.8B and Exh.8C). ED also filed their reply (Rejoinders) to the written submissions of the Applicant (A3) vide Exh.8D and Exh.8E. I carefully read the same.
5. Also heard Ld. Sr. Counsel Mr. Ashok Mundergi @ Ld. Adv. Mr. Vikrant Sabne for Sanjay Raut(A5), the applicant in Bail Application No.582 of 2022. Heard Ld. Additional Solicitor General Mr. Anil Singh @ Mr. Ashish Chavan @ Mr. Aditya Thakkar @ Mrs. Kavita Patil at length. Ld. Sr. Counsel Mr. Mundergi filed written notes, submissions (Exh.19). Even Ld. A.S.G. filed written submissions Exh.20 on 02.11.2022. I carefully read the same.
6. Language of Sec.45(1)(i)(ii) prescribes that, the Public Prosecutor has to be given an opportunity to oppose the application, which has been given abundantly in the instance case. Secondly, where the Public Prosecutor opposes the application, the Court has to be satisfied that there are reasonable grounds for believing that accused is/are not guilty of such offence and that he/they is/are not likely to commit any offence while on bail. Therefore, in the background of arguments in both bail applications, it is inevitable to frame following points as per language of Sec.45(1)(i)(ii) of the PML Act for determination. I am recording following findings thereon for the reasons discussed below :-
