Rakesh Brijlal Jain and Ors. Versus State of Maharashtra and Ors (Bombay High Court) 2025:BHC-AS:2680

(i) A mere breach of promise, agreement or contract does not,ipsofacto, constitute an offence of criminal breach of trust without there being a clear case of entrustment – Clearly, the allegation / charge under Section 406 of the IPC has no basis.

(ii) Thus, once it is established that there is no cheating involved under the IPC then there is no proceeds of crime involved under Section 2(1)(u) of PMLA and therefore there is no Money Laundering involved under Section 3 of PMLA in the present case.

(iii) There is no misappropriation of money or property by any of the parties to the transactions. There is no proceeds of crime as can be seen from herein above. The subject property stands delivered to the Complainant before OC. Hence the case of ED based on the alleged crime recorded by Vile Parle Police Station is completely misconceived. In the present case, once it is established that there is no offence under Sections 406,418 and 420 IPC then the question of Money Laundering under Section 3 of PMLA does not arise.

(iv) From the above it is clear that prosecution and ED has not made out any case whatsoever for proceeding against the Applicants before the Court under the PMLA or even under IPC. At the highest if Complainant is aggrieved due to delay in receiving possession, his remedy lies in a Civil Court under the Sale Agreement which he has already invoked. No offense of cheating or Money Laundering exists qua the Applicants in the present case.

(v) The issuance of process is a clear abuse of the process of the law. ED has conducted itself in a mala fide manner when the various Agreements and correspondence between the parties clearly spell out their inter se rights. ED for reasons best known to it have supported Complainant’s false case without application of mind or without going through the record delineated herein above.

(vi) The action of Complainant as also ED in the above facts to put the criminal system into motion is clearly malafide and calls for imposition of exemplary costs. I am compelled to levy exemplary costs because a strong message needs to be sent to the Law Enforcement Agencies like ED that they should conduct themselves within the parameters of law and that they cannot take law into their own hands without application of mind and harass citizens. It is well settled by various decisions of the Supreme Court and policy of the State as also the view of international community that offence of Money Laundering is committed by an individual with a deliberate design with the motive to enhance his gains, disregarding the interest of the nation and society as a whole. It is seen that conspiracy of Money Laundering is a three staged process, it is hatched in secrecy and executed in darkness. The present case before me is a classic case of oppression in the garb of implementation of PMLA. In the facts of this case none of the ingredients of cheating are present. There is nothing which prohibits a Developer from entering into a Sale Agreement and allowing execution of a simultaneous Agreement for providing additional amenities / renovation in the same premises through another entity. This is how development in Mumbai City takes place. Both the Agreements have been validly entered into with the Complainant. They are transparent. The entity which provides Renovation / interiors / additional amenities is appointed by the Developer as it is his own project. There are cross holding between the Developer and the entity which is appointed. This is normal business practice. They cannot be faulted with.

(vii) Both the Agreements stand delivered qua the subject premises in question. There is nothing in law which prohibits persons having cross-holding stakes in companies / firms which provide such sale of premises and additional amenities in the same project. This is a fairly common practice in the city of Mumbai followed by almost all Developers due to logistical, legal and reasons of taxation. How Money Laundering is involved in the present case and invoked when the Agreements are executed and are delivered fully is only a figment of imagination of theED. The element of delay in obtaining OC is the only cause of action pleaded in the Civil Suit by the Complainant. In the present case, ED has found an ally in the form of the Complainant. It is seen that the Complainant himself was the Chairman of the Society, he had complete knowledge of the fact as to why the OC was delayed, which was due to several discrepancies on account of illegal infractions of the flat purchasers of the Society. Some flat purchasers had changed the user from residential to commercial, some of them had enclosed the balcony areas into their living area which led to delay in obtaining the OC.