Slamming the Directorate of Enforcement (ED) for launching an investigation against a real estate developer under the Prevention of Money Laundering Act (PMLA) without adequate evidence, the Bombay High Court has imposed a fine of Rs one lakh on the national agency.
The matter pertained to a property dispute between Mumbai-based real estate developer Rakesh Jain and property purchaser Gul Achhra, who planned to develop a hotel on the floors of a building in Mumbai’s Malad area.
Following delays in obtaining an occupation certificate, Achhra filed a complaint with the Mumbai Police. He later moved the Andheri magistrate court, which directed the Vile Parle police to investigate the matter.
The probe was later transferred to the ED, which claimed during the investigation that Jain’s purchase of flats and a garage in Andheri during the dispute constituted the “proceeds of crime”.
Noting that both the ED and complainant Achhra acted with malafide intent in pushing the case forward, the single-judge Bench of Justice Milind Jadhav imposed a fine of Rs 1 lakh each on the national agency and the complainant.
Terming the case as a classic example of oppression in the garb of implementation of PMLA, the High Court pointed out that Achhra manipulated the system by suppressing police findings, which had ruled the matter as civil in nature. Achhra had a clear sinister motive in his mind, which became clearly evident, it added.
Noting that law enforcement agencies such as ED should conduct themselves within the parameters of the law, the single-judge Bench observed that they could not take the law into their own hands without application of mind and harass citizens.
Merely breaching an agreement did not amount to criminal breach of trust under Section 406 of the Indian Penal Code, it noted.
The High Court held that the magistrate’s order to involve the Vile Parle police was beyond its jurisdiction. It further declared as invalid, the case filed by the police and the investigation conducted by ED.
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