In 2000, Union science and technology minister Vilasrao Deshmukh countersigned the joint venture agreement between Subhash Ghai's Mukta Arts and Maharashtra Film, Stage and Cultural Development Corporation (MFSCDC), through which 20 acres of land in Goregaon was allotted to Ghai at reduced prices. Deshmukh was chief minister of Maharashtra at the time.
This act came in for severe criticism from the Bombay high court on Thursday.
"Respondent No. 7 (Vilasrao Deshmukh) has clearly misused his official position as chief minister of a State," the division bench of Chief Justice Mohit Shah and Justice Girish Godbole observed, while disapproving the chief minister's counter-signing the agreement.
The judges said it was certainly not acceptable that a chief minister of a state will personally sign an agreement although it was completely illegal and did not have any support or authority even in the form of a resolution by MFSCDC.
"It is clear that Respondent No. 7 has extended undue favours to Respondent No. 4 (Whistling Woods)," the judges said.
The former Maharashtra chief minister had taken a plea of innocence before the high court. His counsel, VR Dhond, argued that Deshmukh had signed the agreement merely as a goodwill gesture, and that it was an act done in the spur of the moment. The senior advocate had further argued that no malafide intentions could be attributed to him, as he was not aware of the contents of the agreement.
However, the court discarded the defence, holding that the role played by the former chief minister in the entire transaction was "deprecable".
Subhash Ghai has decided to challenge the decision before the Supreme Court.
However, it is not clear what Deshmukh's strategy will be. His counsel, VR Dhond, could not be reached for comment as his mobile phone was switched off.