The Bombay High Court on Tuesday
imposed a Rs 1 lakh fine on the Enforcement Directorate (ED) for launching a
money laundering investigation against a Mumbai-based real estate developer,
Rakesh Jain, without sufficient grounds. The court also slammed the ED for
acting outside the law and emphasised the need for a “strong message” to ensure
agencies follow legal protocols.
Court warns against
harassment
Justice Milind Jadhav of the
Bombay High Court made it clear that the ED and complainant Gul Achhra, a
property purchaser, acted with “malafide intent” in pushing the case forward.
Both the ED and Achhra were fined Rs 1 lakh each.
“I am compelled to levy
exemplary costs because a strong message needs to be sent to the law
enforcement agencies like the ED that they should conduct themselves within the
parameters of the law and that they cannot take law into their own hands
without application of mind and harass citizens,” said Justice
Jadhav.
What is the harassment case?
The case arose from a property
dispute between Jain and Achhra, who had planned to develop a hotel on floors
of a building in Mumbai’s Malad area. Delays in obtaining an occupation
certificate led Achhra to file a complaint, initially deemed civil by the
Mumbai Police.
Achhra escalated the matter to
the Andheri magistrate court, which directed the Vile Parle police to
investigate. Eventually, the ED was brought in, claiming that Jain’s purchase
of flats and a garage in Andheri during the dispute constituted “proceeds of
crime”.
What did the High
Court say?
The High Court criticised the ED
for its lack of due diligence, calling the case “a classic example of
oppression in the garb of implementing the Prevention of Money Laundering Act
(PMLA).” Justice Jadhav noted 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,” the
bench stated, adding that merely breaching an agreement does not amount to
criminal breach of trust under Section 406 of the Indian Penal
Code.
The
court ruled that the magistrate’s order to involve the Vile Parle police was
beyond its jurisdiction. Consequently, the case filed by the police and the ED
investigation were declared invalid.