Denying the allegation of illegal arrest levelled by Shiv Sena (UBT) functionary Suraj Chavan, the accused in the Rs3.68 crore khichdi scam dating back to Covid, the Enforcement Directorate (ED) told the Bombay High Court (HC) that his arrest adhered to procedural requirements.
Held on January 17, Chavan had moved the HC after the special PMLA court remanded him to the ED custody, noting his “active involvement in money laundering.
In its affidavit, the agency said that Chavan played a “pivotal role” in securing the BMC contract through “political connections”. Of the misappropriated amount, Rs1.35 crore was allegedly credited to his firm and later layered into investments to launder the “proceeds of crime”.
Representing the accused, advocate Harshad Bhadbhade said that his arrest was illegal and that he was not provided with grounds of arrest in writing as mandated in law. The ED contended that Chavan’s custodial interrogation was necessary to uncover the conspiracy and trace the proceeds of crime. The agency highlighted that Chavan’s release could lead to evidence tampering and witness intimidation, which would hamper the ongoing investigation.
Treating the Mumbai police’s FIR under the Indian Penal Code sections 420 (cheating) and 120B (criminal conspiracy) as the predicate offence, the ED had registered a case against Chavan under the Prevention of Money Laundering Act (PMLA). The agency alleged that Chavan, through his firm Force One Multi Services, enabled the misappropriation by subcontracting khichdi distribution work to ineligible entities, which supplied underweight packets. The proceeds of crime, amounting to Rs1.35 crore, were transferred to Chavan’s personal and firm accounts. The money was used to purchase immovable properties, projecting the funds as untainted, the ED claimed.
Refuting Chavan’s claim that he was not named in the predicate offence, the ED pointed out that section 3 of the PMLA applies to “whosoever” is involved in money laundering. It also dismissed Chavan’s argument that he was unaware of the charges, stating that he was informed of the “grounds of arrest” and provided a written copy.
ED contends
Chavan was informed grounds of arrest, provided written copy
Misappropriated funds of Rs1.35 crore credited to his firm
Later layered into investments to launder the proceeds of crime
Aim was to project the funds as untainted
