Developers Krishna and Prasanna Chamankar, who were prominent accused in the alleged Maharashtra Sadan scam associated with Maharashtra Minister and Nationalist Congress Party (NCP) veteran Chhagan Bhujbal, have been granted substantial relief. The Bombay High Court recently quashed the money-laundering case that was initiated against them by the Enforcement Directorate (ED).
A Division Bench comprising Justices A.S. Gadkari and Rajesh S. Patil allowed a writ petition filed by the Chamankar brothers and their firm, K.S. Chamankar Enterprises. This decision effectively set aside the charge sheet from the 2016 Prevention of Money Laundering Act (PMLA) case. The ED’s case originated from Enforcement Case Information Reports (ECIRs) registered in 2015, following an Anti-Corruption Bureau (ACB) investigation into alleged irregularities in construction contracts awarded during Mr. Bhujbal’s tenure as Public Works Department (PWD) Minister.
The accusations of fraud stemmed from contracts awarded for the construction of the Maharashtra Sadan in New Delhi, the High Mount Rest House in Mumbai, and several buildings for the Regional Transport Office (RTO). The Chamankar firm was accused of securing these projects through fraudulent means, allegedly in collusion with Mr. Bhujbal. These allegations led to the initial ACB First Information Report (FIR) in 2015, after which the ED commenced money-laundering proceedings under the PMLA.
However, in a crucial development on July 31, 2021, a special ACB court discharged the Chamankars from the primary (predicate) offense, concluding that there was insufficient evidence to establish any wrongdoing. The trial court specifically noted that the firm had executed the projects “as per the contract.” Significantly, the prosecution did not appeal this discharge order, rendering it final.
Senior counsel for the Chamankars, advocate Shreeyash Lalit, argued that once the accused are discharged from the scheduled (predicate) offense, any subsequent prosecution under the PMLA cannot legally continue. This argument was supported by the Supreme Court’s definitive ruling in the case of Vijay Madanlal Choudhary vs. Union of India, which clarified that money-laundering charges become unsustainable if the underlying offense is quashed or all accused are acquitted.
The ED, represented by advocate Manisha Jagtap, contested this plea, asserting that PMLA prosecution could still proceed even if the predicate offense was dismissed. The ED cited various rulings, including the Jammu and Kashmir High Court’s Niket Kansal judgment and the Supreme Court’s decision in Pavana Dibbur vs. Directorate of Enforcement, to support their stance.
Nonetheless, the High Court rejected the ED’s arguments, concluding that the Chamankars were indeed entitled to the benefit of their discharge from the main case.
The order stated, “In view thereof, according to us, the conclusion enumerated by the Hon’ble Supreme Court in para No.382.8 in the case of Vijay Madanlal Choudhary squarely applies to the Petitioners and therefore the ECIR and the charge sheet filed thereof, registered by Respondent No.2 qua the Petitioners, deserves to be quashed and set aside.” Consequently, the Bench quashed the money-laundering case, granting the petition and providing the relief sought by the Chamankar brothers.