Court rejects bail of accused in pandemic khichdi scam

MUMBAI: The sessions court on Monday denied bail to Suraj Chavan, a Shiv Sena (UBT) functionary, arrested on January 17, 2024, for his alleged role in a money-laundering case related to an alleged ₹6.37 crore scam pertaining to distribution of khichdi by the Brihanmumbai Municipal Corporation (BMC) among migrant workers during the Covid-19 pandemic.
Senior counsel Ashok Munderji and advocate Harshad Bhadbhade, representing Chavan, contended that the grounds for arrest presented were neither in accordance with nor compliant with Section 19 (power to arrest) of the Prevention of Money Laundering Act (PMLA), 2002. They argued that the grounds of arrest did not adequately demonstrate or establish Chavan’s culpability in the alleged offence.
The senior counsel cited the judgment in the Arvind Kejriwal case in support of his assertion that Section 19 of the Prevention of Money Laundering Act, 2002 mandates to provide reasons for arrest.
Special Public Prosecutor (SPP) Sunil Gonsalves opposed the plea, arguing that the arrest occurred before the Kejriwal judgment and emphasised that it was only after the Kejriwal ruling that the Supreme Court required reasons to be provided to the accused, but since the arrest predates this ruling, the arrest was compliant with the earlier established norms.
The SPP further stated that the grounds for arrest were properly documented and provided to the accused along with the arrest order. Gonsalves asserted that there is substantial evidence indicating that the BMC was defrauded through the supply of insufficient quantities of khichdi.
He claimed that Chavan was aware of this, as evidenced by his presence during the preparation of the khichdi and the subsequent creation of forged letters to justify financial transactions. He also alleged that the applicant received kickbacks for leveraging his influence on securing contracts for M/s. Force One Multi Services.
The Enforcement Directorate (ED) probe revealed that Chavan allegedly received ₹1.35 crore from the contractor firm, M/s Force One Multi Services, which had illicitly generated ₹3.64 crore. The funds were transferred to Chavan between June and December 2020, both as salary and personal loans, with ₹1.25 crore going into his personal account and ₹10 lakh into his partnership firm, Fire Fighters Enterprises.
The ED has accused Chavan of using his connections with senior political figures to help Force One Multi Services secure a khichdi supply contract. The probe found that Force One handled all logistics, but Chavan had no direct role in the supply. Additionally, Force One lacked a proper kitchen, health licenses, and did not meet the eligibility criteria for the contract, being primarily engaged in providing sand, bricks, and security.
Additional sessions judge AC Daga on Monday rejected Chavan’s bail application, observing that he had failed to satisfy the twin conditions laid down in section 45 of the PMLA and, therefore, was not entitled to bail. Section 45 of the PMLA stipulates that bail can be granted to an accused in a money laundering case only if twin conditions are satisfied – there should be prima facie satisfaction that the accused has not committed the offence and that he is not likely to commit any offence while on bail.