Bombay High Court Quashes PMLA Case in Maharashtra Sadan Scam

On September 16, 2025, the Bombay High Court quashed the money laundering case filed by the Enforcement Directorate (ED) against KS Chamankar Enterprises and its directors, Krishna and Prasanna Chamankar, in connection with the Maharashtra Sadan scam. The original allegations stemmed from a contract awarded by then-Public Works Department Minister Chhagan Bhujbal in 2005 for the Maharashtra Sadan redevelopment in Delhi and other projects, accused of irregularities and kickbacks. The Anti-Corruption Bureau (ACB) filed the predicate offence against the company and Bhujbal in 2015, laying the foundation for the ED’s money laundering investigation. A turning point occurred in July 2021 when a special trial court discharged the accused, finding a lack of material evidence to support the allegations of wrongdoing or illegal contract award. The ACB case discharge remained unchallenged for four years, allowing it to attain finality. Drawing on Supreme Court precedent from Vijay Madanlal Choudhary, the High Court observed that prosecution under the Prevention of Money Laundering Act (PMLA) cannot proceed independently if the accused have been acquitted or discharged from the predicate offence. The bench of Justices Ajay Gadkari and Rajesh Patil emphasized that the ED’s charge sheet and legal proceedings were unsustainable in the absence of a valid underlying criminal case. In its verdict, the High Court notably distinguished from a Jammu & Kashmir High Court ruling cited by the ED, clarifying the non-binding nature of such decisions in Maharashtra and prioritizing Supreme Court interpretations. This judgment sets a precedent for future PMLA cases, underscoring that discharge in the root criminal matter directly neutralizes subsequent money laundering charges. The case outcome provided significant relief to the Chamankar brothers and others implicated, including Bhujbal, and clarified the interdependence of predicate and money laundering offences in India’s legal framework.