‘Can’t Take Law Into Own Hands, Harass Citizens’: HC Imposes Rs 1 Lakh Fine On ED For ‘Malafide’ Probe

The Bombay High Court fined the Enforcement Directorate Rs 1 lakh for initiating an unfounded money laundering investigation against a real estate developer.

Representational Image | The Bombay High Court termed the actions of the complainant and ED as "malafide."

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The Bombay High Court on Tuesday imposed a cost of Rs 1 lakh on the Enforcement Directorate (ED) for initiating a money laundering investigation against a real estate developer without proper application of mind. The court stated that central agencies must operate within the legal framework and emphasised that their actions should not harass citizens.

A single bench of Justice Milind Jadhav observed that a strong message needed to be sent to law enforcement agencies to prevent unnecessary harassment, news agency PTI reported. The court quashed the summons issued to Mumbai-based real estate developer Rakesh Jain by a special court in August 2014. The summons had been based on a prosecution complaint filed by the ED following a police complaint against Jain at the Vile Parle police station. The complainant had alleged breach of agreement and cheating regarding a property transaction.

In his ruling, Justice Jadhav noted that no case had been made out against Jain, and consequently, the charges of money laundering were unfounded. The judge described the actions of both the complainant and the ED as "malafide," and stated that they had wrongly initiated the criminal process against Jain. 

"I am compelled to levy exemplary costs because a strong message needs to be sent to law enforcement agencies like the ED that they should conduct themselves within the parameters of law and that they cannot take law into their own hands without application of mind and harass citizens," Justice Jadhav remarked, as quoted by PTI.

Bombay HC Terms ED Action As 'Classic Case Of Oppression In Garb Of Under PMLA'

The court directed the ED to pay the Rs 1 lakh cost to the High Court library within four weeks. Additionally, the original complainant, the property purchaser, was fined Rs 1 lakh, to be paid to the Kirtikar Law Library in the city.

The court also highlighted the nature of money laundering offences, stating that they are often committed with deliberate design and intent to gain at the expense of national and societal interests. The judgment referred to the matter as a "classic case of oppression in the garb of implementation of the Prevention of Money Laundering Act (PMLA)."

On the request of ED advocate Shriram Shirsat, the court stayed its judgement for a week, allowing the agency to file an appeal with the Supreme Court, PTI reported.