Sajnay Raut's dealing with unaccounted money can't be termed proceeds of crime under PMLA: Court

Mumbai: A special court here has said that Shiv Sena MP Sanjay Raut dealt with some "unaccounted money" for purchasing plots at Kihim near Alibag in Raigad district, but the same cannot be "thrown in the stock of proceeds of crime (POC) under the provisions of the Prevention of Money Laundering Act (PMLA)".

Special PMLA court judge M G Deshpande made this observation on Wednesday while granting bail to Raut in a money laundering case related to the Patra Chawl redevelopment project in which he had been arrested by the Enforcement Directorate (ED) on August 1 this year.

Raut, a close confidante of Sena chief Uddhav Thackeray, walked out of the Arthur Road jail in central Mumbai on Wednesday after being granted bail. In its order, the court said that possessing and dealing with unaccounted money may have different consequences under the different penal laws, but the same cannot be termed proceeds of crime under the provisions of the PMLA.

Though Sanjay Raut had received some money as alleged in the prosecution complaint (charge-sheet) from co-accused Pravin Raut, there is absolutely nothing to show that it is a proceeds of crime with knowledge thereof to the Shiv Sena leader, it said.

"Therefore, some unaccounted money had been dealt with by Sanjay Raut at the relevant time during 2007-­11 or any other period thereafter, for purchasing plots at Kihim, cannot be thrown in the stock of POC," the court held.

Unaccounted money without explanation and without nexus with POC or any activity relating to scheduled offence cannot be capitalised as done by the ED herein (in the case), the court added.

The probe agency contended that Sanjay Raut and his family had undertaken foreign trips from the ill-gotten money arranged by co-accused Pravin Raut.

The court said, "Even certain facts are on record. These two close families had travelled at the relevant time. Merely Pravin Raut could not give the account of money relating to travel tickets for want of remembrance, can it be straightaway connected with POC or the criminal activity relating to Scheduled Offence?" The probe agency had claimed that a vehicle used by Sanjay Raut, which is in the name of his friend Ramji Veera, was purchased from laundered money. The court, however, said there was nothing as such at the prima ­facie stage to "draw such far-fetched inference".

"Considering their close family relations if he purchases vehicle in the name of Ramji Veera and allows the same for the use of Sanjay Raut, along with policy documents, can it be straightaway said that it is POC generated from the criminal activities relating to Scheduled Offence or a property purchased from the POC?" the court asked.

The ED case is based on the statements of witnesses like Swapna Patkar and Chandan Kelekar.

Responding to a submission of the defence, the probe agency claimed that the credibility of the witness cannot be looked into at the stage of bail.

"Simply because provisions of the PMLA give certain importance and weightage to the statements, it does not mean that such statements are straightaway binding on the court, whatever its quality may be. So, if the court accepts such statements as it is, irrespective of the quality of its material and character, there will be no scope for application of judicial mind," the court said.

The ED's probe pertained to alleged financial irregularities in the redevelopment of the Patra Chawl and related financial transactions involving Sanjay Raut's wife and associates.

Siddharth Nagar, popularly known as the Patra Chawl, in Goregaon is spread over 47 acres and houses 672 tenant families. 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 played a major role in the money laundering case.