A special court under the Prevention of Money Laundering Act (PMLA) has taken cognizance of the chargesheet filed against businessman Pravin Raut, said to be a close aide of Shiv Sena MP Sanjay Raut, and the promoters of a company called HDIL - Rakesh and Sarang Wadhawan. The special PMLA court said that their prima facie involvement in generating proceeds of crime and further laundering it is patent from the evidence.
The court observed, "Prima facie involvement of accused in generating proceeds of crime and further laundering the same as defined under Section 3 read with Section 4 is patent from the complaint, documents and statements under Section 50 of Act."
Section 3 of PMLA defines money laundering and states, "Whosoever directly or indirectly attempts to indulge or knowingly assists or knowingly is a party or is actually involved in any process or activity connected with the proceeds of crime and projecting it as untainted property shall be guilty of offence of money-laundering."
Section 4 of PMLA states that the punishment for money laundering is rigorous imprisonment for a term which shall not be less than three years, but which may extend to seven years and shall also be liable to fine which may extend to five lakh rupees and adds, "Provided that where the proceeds of crime involved in money-laundering relates to any offence specified under paragraph 2 of Part A of the Schedule, the provisions of this section shall have effect as if for the words “which may extend to seven years”, the words “which may extend to ten years” had been substituted."
The PMLA court had gone through various statements which were recorded by the Enforcement Directorate (ED) under section 50 of PMLA, which gives the agency quasi-judicial powers.
Special Judge MG Deshpande said, "Prima facie it is evident that proceeds of crime was generated."
He added that the proceeds of crime were "placed, layered and integrated for the personal benefits."
The case against Pravin Raut and Wadhawans is of causing wrongful loss prima facie to the tune of Rs1034 crore to Maharashtra Housing Area Development Authority (MHADA) and corresponding gain to themselves.
The court noted that the allegations in the complaint and various documents prima facie indicate that a company named Guruashish Construction Pvt Ltd (GCPL) had illegally sold the FSI to third party developers and raised Rs.1048.96 crore. Out of this amount, Rs 147.17 crore has been paid to Brihanmumbai Municipal Corporation.
GCPL through HDIL launched a project in the year 2010, namely Meadows at Patra Chawl, Goregaon, and against bookings from 458 home buyers, an amount of Rs 138 crore was collected. The accusation is that the company sold FSI that it had on its plots to multiple companies. The court noted that it is prima-facie clear that for illegal sale of FSI, the accused generated total amount of Rs 1039.79 crore. Accordingly, approx Rs 1039.79 crore were received in the bank account of GCPL, HDIL and its group companies during 2010-2014.
Some part of the total amount was utilized in developing the project which remained incomplete. Whereas most of the funds were siphoned off to various accounts. The company had availed term loans around Rs 100 crore from Union Bank of India by way of Non-Convertible Debentures and around Rs 215 Crore from IL & FS Ltd. Some parts of these amounts were utilized in developing the project which remained incomplete.
However, most of the funds were siphoned off, the court noted. The entire amount totaling Rs 1039.79 crore was allegedly illegally collected by unauthorized sale of FSI is therefore the proceeds of crime as per Section 2(1)(u) of Prevention of Money Laundering Act,2002 (PML Act), the court stated.
HDIL promoter Rakesh Wadhawan was responsible for the project and he, along with his son Sarang Wadhawan and Pravin Raut, had managed to sell the FSI to third party developers and collected Rs 1039.79 crore between 2010-2014, according to ED.
Instead of using these sale proceeds in construction of the flats for the tenants and for the MHADA portion, they reportedly siphoned off the amounts to the various accounts of HDIL and group companies of HDIL. These siphoned funds were utilized in transactions with HDIL group companies, cash withdrawals, to meet the personal expenses, noted the court.