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 special court in Mumbai said on Wednesday while granting him bail in the Patra Chawl redevelopment matter.
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.
Further, the reason the agency did not arrest concerned officials of MHADA and other government departments was "nothing but conveying a message to then Union agriculture minister and then (Maharashtra) chief minister, creating a fear psyche in their mind that they are the next in this queue," the judge said.
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 special judge for cases under the Prevention of Money Laundering Act, M G Deshpande, granted bail to Sanjay Raut, arrested on August 1, and his aide Praveen Raut, arrested in February 2022.
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 power to arrest any person to the concerned government officials.
“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, it said.
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 he 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; 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 extraordinary pace with which ED arrests accused becomes not even a snail speed in conducting trials," the court added.
The ED's probe pertained to alleged financial irregularities in the redevelopment of the Patra Chawl, row tenement in suburban Goregaon, and related financial transactions involving Sanjay Raut's wife and associates.
In 2008, MHADA, a government agency, assigned a redevelopment contract for the Chawl to Guru Ashish Construction Private Limited (GACPL), a sister company of the Housing Development and Infrastructure Ltd (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.
