The Bombay High Court on Tuesday dismissed proceedings initiated by the Enforcement Directorate (ED) under the Prevention of Money Laundering Act (PMLA). These actions were targeted at Krishna and Prasanna Chmankar and their partnership firm KS Chamankar Enterprises. The court ruled that since the accused were cleared of the original offense, the money laundering case could not proceed further.
The Maharashtra Sadan scam dates back to 2005, during the Congress-NCP government in Maharashtra. The contract to build a new Maharashtra Sadan building in Delhi was awarded to KS Chamankar Enterprises without a tender. At that time, Chhagan Bhujbal was the state's Public Works Minister.
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Later, when the BJP-Shiv Sena government came to power and Bhujbal’s party was in opposition, cases were filed against him and the Chamankar brothers were implicated, although they were acquitted in the ACB investigation. Bhujbal was also acquitted from this case in 2021.
Court Hearings and Arguments
In 2025, the Chamankar brothers approached the High Court seeking to quash the chargesheet filed by the ED. Their lawyer, Shriyas Lalit, argued that in July 2021, the trial court acquitted them of the ACB case. This ruling is now final, making it unlawful to continue the ED's proceedings.
Meanwhile, ED's counsel Manisha Jagtap, citing Supreme Court decisions, argued that proceedings under PMLA can run independently, even if the original offense has been dismissed.
Judgment of the Court
Justices AS Gadkari and Rajesh S Patil stated that the Supreme Court's ruling in Vijay Madanlal Choudhary vs. Union of India applies directly to this case. Referring to the judgment, the court stated that if a person is finally acquitted of the original crime, no accusation of money laundering can be pursued.
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The court further clarified that the acquittal order of July 2021 was not challenged by any party for over four years, rendering it conclusive. On this basis, the court ruled that the ECIR and chargesheet should be annulled. Consequently, the court granted the Chamankar brothers' petition, concluding the ED proceedings.
