The Bombay High Court on Tuesday quashed the Enforcement Directorate’s complaint and the process issued against advocate Kishore Dewani in a money-laundering case linked to former Maharashtra Home Minister Anil Deshmukh. The Court held that the record did not disclose any “proceeds of crime” attributable to Dewani.
A single-judge Bench of Justice Ashwin Bhobe noted that, even on the ED’s own case, the alleged proceeds of crime arose only between December 2020 and February 2021. Despite this, the ED relied on properties at Dhutum Village that M/s Premier Port Links Pvt. Ltd. had purchased much earlier, during 2005–2007.
What The ED Alleged
According to the ED, Dewani was a close aide of Deshmukh. The agency alleged that he helped Deshmukh and his family launder money that was allegedly collected illegally. The ED claimed the amount involved was ₹100 crore per month, allegedly collected from bar owners across Mumbai.
The ED said Dewani became a Director of Premier Port Links in 2009. It also asserted that Dewani’s wife and Deshmukh’s sons held joint shareholding in the company.
The agency further alleged that Premier Port Links received loans totalling ₹2.20 crore from M/s Flourish Properties Pvt. Ltd., which it linked to the Deshmukh family. Based on this, the ED claimed Premier Port Links used those funds to purchase the Dhutum Village properties.
On these assertions, the ED alleged that Dewani facilitated transactions through corporate entities under his control. It claimed the transactions enabled layering and routing of tainted funds.
The ED also alleged that the transaction lacked authority and involved concealment of identities. It claimed concealment occurred at two stages—first at the time of purchase, and later through an acquisition of shares at a nominal price. According to the agency, these steps ultimately resulted in 50% ownership over the company’s assets.
Dewani’s Stand
Dewani argued that Premier Port Links bought the Dhutum Village properties during 2005–2007. He pointed out that the purchases pre-dated the period when the ED itself alleged the proceeds of crime were generated, i.e., 2020–2021. On that basis, he submitted that no offence under Section 3 of the Prevention of Money Laundering Act, 2002 (PMLA) could arise against him.
He also questioned the ED’s allegation on knowledge. Dewani argued that he could not be blamed for proceeds of crime that the agency claimed emerged roughly 15 years after the property purchases.
What The Court Held
Justice Bhobe observed that, even if the charge-sheet allegations were accepted at face value, the alleged proceeds of crime arose only between December 2020 and February 2021. Yet, the charge-sheet still alleged that Dewani committed a PMLA offence by entering into property purchase transactions in 2005–2007.
The Court then examined the allegation around the ₹2.20 crore loan transaction. While the charge-sheet claimed Dewani enabled the Deshmukh family to invest in Premier Port Links through that route, the record indicated that Dewani had invested an equal amount.
The Bench also noted that the supplementary charge-sheet did not disclose any additional material against him.
After reviewing the record, the High Court held that the properties purchased in 2005–2007 “unarguably” could not relate to proceeds of crime when the scheduled offence allegedly occurred later, during 2020–2021. The Court added that, even if the prosecution alleged money transfers to the trust account of the principal accused from 2013, the Dhutum Village properties still had no link to the alleged proceeds of crime.
Justice Bhobe found that the ED could not point to any material showing even a remote nexus between the Dhutum Village properties and the alleged proceeds of crime. The agency also failed to show material indicating Dewani’s involvement.
The Court reiterated the scope of the PMLA. The law targets knowing dealings with proceeds of crime, including concealment, possession, acquisition, use, or projecting such property as untainted. On the material placed, the Bench concluded that no case under Sections 3 and 4 of the PMLA, 2002 was made out against Dewani.
Process Order Set Aside
The Bench also considered the order dated September 16, 2021, passed by the Special PMLA Court in Mumbai. The High Court found that the order did not reflect application of mind to any material against Dewani.
In the Court’s view, the test of “sufficient ground for proceeding” was not satisfied. The order also did not record reasons indicating a prima facie case.
The High Court, therefore, set aside the process order and quashed the ED complaint against Dewani.
Appearances
- For the Applicant: Senior Advocate Sunil Manohar with Advocates Pralhad Paranjape, Sakshi Jogdand, and Omkar Prashant Mulekar
- For the ED: Special Counsel Prashant Mishra with Advocates Bharat Jadhav and Krish Kariya
- For the State: Additional Public Prosecutor Pallavi Dabholkar
Case Title: Kishore Pessulal Dewani vs Directorate of Enforcement
