Shiv Sena MP Sanjay Raut and his family received "proceeds of crime" worth over Rs 1 crore generated out of alleged irregularities in a housing redevelopment project in Mumbai, the Enforcement Directorate (ED) told a special court in Mumbai on Monday.
The ED made this claim while seeking Sanjay Raut's custody in a money laundering case pertaining to irregularities in the redevelopment of Patra 'Chawl' (old row tenement) in suburban Goregaon and related financial property transactions involving his wife and alleged associates.
Sanjay Raut, however, claimed the allegations against him were ”vague’ and raised out of ”political vendetta”.
Special PMLA (Prevention of Money Laundering Act) court judge M G Deshpande later sent the Sena leader to ED custody till August 4.
The 60-year-old politician, a close aide of Shiv Sena president Uddhav Thackeray, was arrested after over six hours of questioning at the ED zonal office in south Mumbai's Ballard Estate shortly after Sunday midnight.
The federal probe agency produced him before the special PMLA court in Mumbai and sought his custody for eight days.
However, the judge, after hearing defence and prosecution arguments, said, "A long custody for eight days is not warranted. I'm of the opinion that if the accused is remanded to custody till August 4 that will suffice the purpose."
The ED, represented by special public prosecutor Hiten Venegaonkar, told the court Sanjay Raut and his family were direct beneficiaries of the "proceeds of crime".
Giving an account of the probe carried out until now, the ED told the court that 47 acres of land at Patra Chawl belongs to MHADA (Maharashtra Housing and Area Development Authority) and there were 672 tenants at the said plot.
A chawl is a group of one or two-room dwelling units along a corridor, sharing sanitary facilities.
The financial fraud probe agency said various permissions/approvals for the redevelopment and additional FSIs were obtained by Guru Ashish Constructions (previously arrested accused Pravin Raut, a businessman, was one of the directors of the real estate firm) for the project. This led to the generation of proceeds of crime (POC) of Rs 1039.79 crore between 2010 and 2014.
Floor space index (FSI) is the maximum permissible floor area that can be built on a particular plot or /piece of land. If the FSI permissible is 1.0, then only 1,000 sqft of construction can be done on a plot measuring 1,000 sqft.
Pravin Raut, who has already been charge-sheeted in the case, acted as a proxy of Sanjay Raut and liaised with authorities in obtaining permissions/clearance etc from time to time, which is the primary reason for generation of the ill-gotten money, the probe agency said.
”PMLA investigation conducted so far established the trail of POC of Rs 1.06 crore to Sanjay Raut and his family,” the ED said.
Further, the probe revealed the Rajya Sabha MP utilised a considerable amount of cash for purchasing land parcels at Kihim near coastal town of Alibaug in adjoining Raigad district which has been confirmed by some of the sellers. This cash component has been sourced from Pravin Raut, the probe agency claimed.
The ED also told the court that Pravin Raut has spent money from POC on domestic and foreign tours undertaken by Sanjay Raut's family.
The Rajya Sabha MP also received Rs 2 lakh in cash per month from Pravin Raut during the said period (2010 and 2014), it said.
The ED alleged Sanjay Raut threatened landowners and asked them to sell their land situated at Kihim beach to him. Further, he also threatened witnesses who have deposed before the probe agency.
The central agency said some documents and Rs 11.50 lakh in cash were seized during searches at two premises of the Sena leader, located in Dadar and suburban Bhandup, on Sunday.
The probe agency submitted the parliamentarian did not comply with summons, issued on July 20 and 27, asking him to join investigation.
During this period, he threatened a key female witness asking her not to take his name before the ED and further to state that her previous statements were under threat and pressure. Failure to do so may ”result in her rape and murder”, the probe agency claimed in the remand plea.
It said Sanjay Raut and Pravin Raut have played a key role in the execution of illegal transactions and actively participated in siphoning proceeds of crime.
”Sanjay Raut is an actual beneficiary of the said proceeds of crime,” the ED alleged.
However, senior advocate Ashok Mundargi, appearing for Sanjay Raut, said these are old complaints made many years ago and are being racked up now due to ”change of atmosphere”.
The lawyer said all the allegations mentioned in the remand plea were ”vague” and were in the nature of ”may be and might be” . Sum and substance of these allegations is nothing but just a ”political vendetta”, Mundargi said.
On the ED's claims of non-cooperation and ignoring summons, the senior advocate said this period (July 20 and 27) saw developments related to some elections, including that of the President of India. "All these circumstances are borne out of these elections and the role his client had to play for a political party," said Mundargi.
Sanjay Raut had informed the probe agency about his inability to join the probe and therefore the allegation of non-cooperation should be taken “with a pinch of salt”, Mundargi said.
The court, after hearing both the sides, held that considering the compass of inquiry and trail of money, custodial interrogation of Sanjay Raut was necessary.
It also cannot be ignored that a charge-sheet against Pravin Raut has been filed, everything has been documented and available for prosecution to investigate, the court said.
It added that trail of money in Sanjay Raut's wife's bank account can be investigated by obtaining bank statements.