Money laundering case: Mumbai court allows discharge pleas of 2 businessmen for want of scheduled offence

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A special PMLA court in Mumbai on Wednesday allowed the discharge pleas of two businessmen in a money laundering case in the absence of 'predicate' (scheduled) offence which led to the case against them.

The order comes following guidelines laid down by the Supreme Court last month, specifying that a case under the Prevention of Money Laundering Act (PMLA) cannot continue if there is no scheduled offence and hence, the special court has no jurisdiction to extend the judicial custody of the persons arrested under the Act.

The Enforcement Directorate (ED) had booked the two accused, Babulal Verma and Kamalkishor Gupta, top executives of the Omkar Relators and Developers, under provisions of the PMLA.

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The case pertains to alleged irregularities in the execution of the Slum Rehabilitation Authority (SRA) scheme in development of a housing society in Mumbai.

The company and the two executives are also facing allegations of "diverting" more than Rs 400 crore loan from the Yes Bank.

The money laundering case was based on a First Information Report (FIR) registered against the duo by the Aurangabad police in Maharashtra.

As per the PMLA provisions, a prior FIR (scheduled offence) is a requisite for the ED to initiate action against a person involved with the process or activity.

The Aurangabad police recently filed a closure report in the case (scheduled offence) against Verma and Gupta which was accepted by the court and the duo was discharged.

As per the SC ruling, if a person is discharged or acquitted in the predicate offence, then the charges of PMLA also go.

Relying on this ruling, the duo, through their lawyers Rahul and Vijay Agrawal, had moved the discharge applications before special PMLA court judge MG Deshpande.

The lawyers had said Verma and Gupta should be discharged from the case as the PMLA case cannot stand on its own.

The court after hearing arguments of both sides allowed the discharge applications of the duo. The detailed order was not yet available.

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