Maharashtra Sadan case: Bombay high court quashes ED’s money laundering case against Chamankar Enterprises, its directors after discharge in predicate offence | Mumbai News

Mumbai: The Bombay high court on Tuesday quashed an alleged money laundering case registered in 2016 by the Enforcement Directorate (ED) against K S Chamankar Enterprises and its partners, Krishna Chamankar and Prasanna Chamankar, who were appointed as developers for a new Maharashtra Sadan or guest house of the state in Delhi.The Chamankars argued that a special trial court in July 2021 discharged them from the predicate offence registered by the Anti-Corruption Bureau (ACB) in the alleged Maharashtra Sadan scam case. The discharge order attained finality as it was not challenged in the last four years by either agency, their lawyer argued.The Chamankars filed a quashing petition before HC last year, seeking that the case, chargesheet, and all consequential proceedings be quashed. Accepting their plea, the HC division bench of Justices Ajay Gadkari and Rajesh Patil pronounced the judgment on Tuesday.The special Prevention of Money Laundering Act (PMLA) kicks in after an offence known as a ‘scheduled or predicate’ offence is allegedly committed first. In this case, ACB accused Chamankar Enterprises of constructing Maharashtra Sadan at Delhi, High Mount Rest House, and other buildings as per contract. Hence, their lawyer, Shreeyash Lalit, argued that there can be no offence of money laundering against them.The ACB case concerned a contract that the then NCP leader, Chhagan Bhujbal, allegedly gave the firm K S Chamankar Enterprises in 2005, without bids. Based on the ACB case, ED registered its case. The trial court also discharged Bhujbal and others in the ACB case, holding that undue haste was made in lodging the FIR, and the assessment of implied loss to the state was “improper and illegal”.However, ED advocate Manisha Jagtap argued that the Jammu & Kashmir HC, in one case, has taken a view that even if the predicate offence is quashed or dropped, the PMLA prosecution continues. Bombay HC said the J&K HC judgment has no binding effect on it. The HC referred to the Supreme Court ruling in Vijay Choudhary, which held that the money laundering offence “is dependent on illegal gain of property as a result of criminal activity relating to a scheduled offence”.The SC laid down that “if the person is finally discharged/acquitted of the scheduled offence or the criminal case against him is quashed by the court of competent jurisdiction, there can be no offence of money laundering against him or anyone claiming such property being the property linked to the stated scheduled offence through him.” Hence, since the Chamankars were discharged by the trial court in the ACB case, the PMLA case against them deserves to be quashed.