Mumbai: The Bombay High Court has discharged Shyam Radhakrishna Malpani, chartered accountant (CA) of NCP leader and minister Chhagan Bhujbal and his family, from a 2015 money laundering case registered by the Enforcement Directorate (ED).
Justice RN Laddha, on June 16, held that “mere absence of due diligence by the applicant does not amount to the commission or omission of an offence under Section 3 (money laundering) of the Prevention of Money Laundering Act (PMLA).”
Malpani had approached the HC challenging the special court’s March 2021 order rejecting his discharge plea.
The ED’s case against Bhujbal and others stemmed from a 2015 complaint by the state Anti-Corruption Bureau (ACB). It alleged that land belonging to the Regional Transport Office (RTO) in Andheri was handed over to a developer while Bhujbal was deputy chief minister and PWD minister of Maharashtra between 2004 and 2014. The land transfer was allegedly linked to construction contracts for Maharashtra Sadan in Delhi and the RTO office in Tardeo.
Bhujbal was arrested in 2015 and remained in custody until he was granted bail by the HC in 2018. In 2021, a special court discharged Bhujbal, his son Pankaj, nephew Sameer (former MP), and five others from the ACB case.
The ED had accused Malpani of actively participating in laundering money while auditing financial records of entities controlled by the Bhujbals. It alleged he was aware of suspicious transactions and helped camouflage illicit financial flows.
ED counsel Hiten Venegaonkar argued that Malpani’s audits facilitated the concealment of proceeds of crime. However, Malpani’s lawyer, Pranav Badheka, pointed out that his client was only a statutory auditor between 2012 and 2015, whereas the alleged proceeds of crime originated around 2007-08. He further noted that all predicate offences against the Bhujbals had resulted in discharges.
Justice Laddha remarked that “the role of an auditor is inherently distinct from that of an investigating agency” and found that the ED’s complaint failed to establish any nexus between Malpani and the alleged conspiracy or money laundering. The HC also noted that Malpani was neither named nor charge-sheeted in the predicate offences.
