City Sessions Court, Mumbai: In a bail application filed by Pravin Raut (A3) and Sanjay Raut (A5) against arrest made by Directorate of Enforcement (ED) due to allegations relating to selling free sale component, generating proceeds of crime and laundering of about Rs. 95 Cr./ Rs. 100 Cr./ Rs. 112 Cr., M.G. Deshpande, J., granted bail and held that both accused are arrested illegally and 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 Rakesh and Sarang (A1 and A2) at the relevant time in 2006-2018.
Pravin Raut prayed for grant of bail contending his innocence and false implication whereas ED strongly opposed the application alleging his active involvement in generation, placement, layering and integration of proceeds of crime (POC), amounting to a serious offence of money laundering. Sanjay Raut prayed for grant of bail on the same ground and ED opposed the application alleging that Sanjay Raut 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 Money Laundering Act, 2002 (PMLA).
On perusal of documents placed before the Court, it was noted that Pravin Raut was arrested based on charges of civil nature and Sanjay Raut was arrested for no credible reasons to be seen. This truth is glaring. The Court is under a legal obligation and duty to find out the truth even at the stage of bail. The Supreme Court time and again laid down, “Truth is the guiding star. Criminal trial is voyage of discovery of truth. The truth alone triumphs and every endeavour must be made by the Court to discover the truth and make justice.”
The Court further noted that simply labeling 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 PML Act, 2002. The Court must do what is right irrespective of who is before it.
The Court remarked that in the given set of facts, if MHADA, who is party to every stage and every litigation, had reached up to the High Court, yet lodged FIR for the alleged transaction allegedly taken place during 2006 to 2013. Thus, the conduct of MHADA right from beginning till date is suspicious and even ED admitted the same in their complaints, yet ED has not made any MHADA staff accused.
The Court further remarked that Rakesh and Sarang (A1 and A2) are allegedly the main accused persons as admitted by affidavit of Sarang Wadhawan, and still were not arrested by the ED and were left unscathed. All this clearly indicates disparity, pick and choose attitude of the ED.
The Court opined that many statements of witnesses recorded by ED clearly refer the prominent role of Wadhawans (A1 and A2) and their HDIL, but they were not arrested and Pravin Raut (A3) and Sanjay Raut (A5) who have absolutely no concern in generating POC or laundering money as well as indulging the criminal activities relating to the scheduled offence, were arrested for subsequent transactions, they have made from their own money.
The Court observed that extreme and exceptional power of effecting arrest which ought to have been used very sparingly, has been used by the ED Investigating Officers under Section 19 of PMLA, is abinitio Illegal and held that the question of attracting rigors of stringent twin conditions under Section 45(1)(i)(ii) of PML Act, 2002 do not arise and both accused cannot be detained in judicial custody.
[Pravin Madhukar Raut v. Directorate of Enforcement, PMLA Special Case No. 356 of 2022, decided on 09-11-2022]
Advocates who appeared in this case :
Mr. Aabad Ponda, Ld. Sr. Counsel @ Mr. Nitesh Jain, Mr. Hridhay Khurana, Ld. Advs. i/b Trilegal for the Applicant(A3);
Mr. Hiten Venegavkar @ Mrs. Kavita Patil, Ld. Spl. P. Ps.
*Arunima Bose, Editorial Assistant has reported this.