Bombay HC Quashes PMLA Case Against Chamankar Enterprises In Maharashtra Sadan Contract Row

Mumbai: The Bombay High Court on Tuesday quashed the money laundering case against Chamankar Enterprises and its three partners, who were accused of irregularities in the award of contracts for the Maharashtra Sadan in New Delhi, the RTO building at Tardeo and an SRA project in Kalina.

Bench Names Accused and Firm

A bench of Justices Ajey Gadkari and Rajesh Patil quashed the FIR against Krishna Shantaram Chamankar, Prashant Shantaram Chamankar, and Prasanna Shantaram Chamankar and their firm Chamankar Enterprises.

Appeal Against PMLA Court’s Order

They had moved the HC after the special PMLA court in October 2024 declined to discharge them, holding that the “scheduled offence is not finally absolved by a court on account of discharge.”

ACB Case Background

The Anti-Corruption Bureau (ACB) had booked Chamankars in 2015, alleging that in return for the projects, kickbacks were paid to family members of then PWD minister Chhagan Bhujbal.

Although the ACB case was closed in July 2021, with the trial court discharging the firm and its directors, the Enforcement Directorate (ED) continued with a prosecution under the Prevention of Money Laundering Act (PMLA) on the same allegations.

Petitioners’ Argument

Petitioners’ counsel pointed out that the discharge order passed by the special court on July 31, 2021, had not been challenged for over four years and had thus “attained finality”.

The trial court had categorically held that Maharashtra Sadan and other projects “were constructed as per the contract” and that “there was no material against the petitioners”, their plea contended.

ED’s Opposition

The ED opposed the plea, citing a Jammu and Kashmir (J&K) High Court ruling that PMLA prosecution can continue even if the predicate offence is quashed. However, the agency admitted that they were discharged from the predicate offence.

HC Rejects ED’s Argument

The HC rejected this argument, stressing that the J&K ruling had no binding effect in Maharashtra and that the Supreme Court’s precedents in other cases were clear.

Court’s Observation

“It is an admitted fact on record that the petitioners have been discharged by the trial court from the predicate offence registered by the ACB, and the said order has attained finality,” the bench observed in its detailed order.

Supreme Court Precedent Applied

Relying on the apex court’s finding that acquittal or discharge in the predicate offence extends to those named in a related PMLA case, the HC held: “The conclusion enumerated by the Hon’ble Supreme Court…. squarely applies. Therefore, the ECIR and the charge-sheet filed thereof deserve to be quashed and set aside.”

Case Background on Maharashtra Sadan

The Maharashtra Sadan, the state government’s guesthouse in New Delhi, was redeveloped during Chhagan Bhujbal’s tenure as PWD minister. The project became the centre of a major controversy after allegations surfaced that contracts were awarded to firms linked to Bhujbal’s associates in exchange for kickbacks.

The ACB registered a case in 2015, leading to Bhujbal’s arrest and prosecution. Although the Chamankars were named in the alleged scam, the trial court in 2021 discharged them, finding no irregularities in the awarding of contracts or execution of work.

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Bhujbal’s Case Outcome

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.

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