Dapoli Resort Case: Bombay High Court Asks ED To Not Take Coercive Steps Against Maharashtra's Former Cabinet Minister Anil Parab Till March 20

A division bench of Justice Revati Mohite Dere and Justice Sharmila U Deshmukh was hearing Parab’s plea to quash the ECIR registered by the ED.

The High Court passed the order after it was informed that the Sessions Court had quashed the magistrate's order issuing process in a case with facts similar to what the ED was investigating. The ED has alleged laundering of money arising out of that offence.

The ED is investigating a case arising out of a private complaint under Section 7 of the Environment Protection Act by the Ministry of Environment, Forest and Climate Change (MoEF). MoEF has alleged that the petitioner constructed a resort in no development zone and discharge of pollutants beyond specified limits. This offence is a scheduled offence under the PMLA. The MoEF has also alleged that the petitioner cheated (section 420 IPC) the gram panchayat.

Another FIR was registered against Parab for cheating with similar facts. According to the petition, this FIR was filed only on the apprehension that magistrate court may not take cognizance of the private complaint. The entire process has been initiated mala fide as a result of a political campaign launched by Kirit Somaiya, the petitioner alleged.

Senior Advocate Amit Desai for Parab told the court that the ECIR was registered by ED upon mere filing of the private complaint when the magistrate court had not taken cognizance of the complaint or issued process.

Desai submitted that in November 2022 process was issued by the magistrate against the petitioner and Sai Resort for offences under the EPA but not for offence under section 420 IPC, which is an alleged offence.

The order issuing process was stayed in February 2023, on a revision petition filed by Parab, Desai said. He later added that the Sessions Court has allowed Parab's revision plea.

In March 2023, ED arrested Sadanand Kadam, Parab’s friend and the proprietor and developer of the resort. He was remanded to ED’s custody until March 15, 2023.

Desai argued that on mere filing of a complaint the ECIR is registered and Kadam is in jail even though on the day he was arrested there was no predicate offence.

Desai said that while MoEF's complaint was pending, a stranger to the matter (a panchayat official) filed an FIR with similar allegations as the private complaint.

The FIR was registered against Parab following Somaiya's complaint. Somaiya alleged a scam of Rs. 10 crore regarding a resort called – Sai Resort – built on the plot. It is Somaiya's case that Parab and the other accused made false entries in the regarding levy and collection of tax on the land despite no resort being there.

According to the petition, the resort isn’t functional and hence there are no proceeds generated from any ‘crime’. Further, magistrate didn’t take cognizance of complaint under section 420 IPC. Therefore, there can be no invocation of provisions of PMLA in the absence of a predicate offence.

Desai submitted that there has to be a prima facie determination when the predicate offence is registered. The magistrate should be given an opportunity to apply its mind before registering the ECIR, he added.

According to the petition, even before Kadam was arrested, Kirit Somaiya tweeted about his arrest. Thus, the petitioner is apprehending his arrest in view of the upcoming BMC elections.

Additional Solicitor General Anil Singh submitted that the petitioner should use the alternative remedy of anticipatory bail as there is also a second FIR pending against him.

The income tax (IT) department claimed that it uncovered irregularities pertaining to the acquisition of land in Dapoli.

Sadanand Kadam bought the land parcel that belonged to Parab in May 2017 and subsequently constructed a resort there.

The resort was purportedly developed for 6 crores, according to the department, but it was only sold in 2020 for only 11 crores.

It had claimed that neither Kadam nor Parab had accounted for the expense of constructing the resort.

After filing an ECIR for money laundering, the ED raided seven locations connected to Parab and his suspected close associates.

According to the ED, Parab paid 1.80 crore for the land, of which 80 lakh was paid in cash, and that this money was given to the seller by Kadam on Parab’s behalf.

The agency also claimed that the resort on the property, which was assessed at 7.46 crore and created by illicit activity, had a worth of roughly 2.74 crore.