HC grants bail to Sujit Patkar in multi-crore Jumbo Covid Centres fraud

A bench of justice Amit Borkar noted that an extended incarceration was not necessary despite Patkar’s prima facie complicity in the generation of proceeds of the crime, as the investigation was complete.

MUMBAI: The Bombay high court on Wednesday granted bail to businessman Sujit Patkar, an alleged aide of Shiv Sena (UBT) MP Sanjay Raut, who was arrested in July 2023 in connection with the Jumbo Covid Centres fraud.

Mumbai, India – July 20, 2023: Enforcement Directorate (ED) arrested Sujit Patkar in connection with the alleged Covid-19 jumbo centre scam, in Mumbai, India, on Thursday, July 20, 2023. (Photo by Bhushan Koyande/HT Photo)

A bench of justice Amit Borkar noted that an extended incarceration was not necessary despite Patkar’s prima facie complicity in the generation of proceeds of the crime, as the investigation was complete. The court imposed certain safeguards through bail conditions, including furnishing a personal bond of ₹1 lakh, to secure Patkar’s presence during the trial and prevent his interference with the proceedings.

The Jumbo Covid Centre scam refers to allegations of fraud, money laundering, and mismanagement in operating large-scale temporary medical centres during the pandemic. Patkar is one of the four partners of Lifeline Hospital Management Services (LHMS), which bagged a ₹38-crore contract from the Brihanmumbai Municipal Corporation (BMC) to supply medical personnel to Jumbo Covid Centres in Worli and Dahisar.

The Enforcement Directorate (ED) arrested Patkar in July 2023 in a money-laundering case associated with the alleged fraud. According to the agency, LHMS, constituted by four partners—Patkar, Dr Hemant Gupta, Sanjay Shah, and Rajiv Salunkhe—concealed the fact that it was not registered as a partnership firm as of the date of submission of the bid.

Further allegations included discrepancies in the documents submitted, the absence of any prior experience in the field, fictitious bills, and submission of forged attendance sheets of medical staff at the centres, thereby putting the lives of Covid-19 patients at risk. Over a two-year period, LMHS allegedly took wrongful payments of ₹32.44 crore from the BMC, including ₹18 crore linked to Patkar, the agency claimed.

A special court for PMLA (Prevention of Money Laundering Act) cases had rejected Patkar’s bail plea in November last year, following which he approached the high court for relief.

In the high court, senior advocate Abad Ponda, representing Patkar, submitted that his client was not involved in drafting LHMS’s partnership deed and, therefore, the forgery allegation cannot be attributed to him. He added that Patkar had no role to play in the maintenance of attendance records or in the preparation and submission of invoices raised by the firm. Stating that the commencement of trial in the near future was extremely remote, advocate Ponda urged the court to grant bail to Patkar.

Special public prosecutor Hiten Venegaonkar opposed the bail application, flagging Patkar’s alleged active and pivotal role in the entire transaction. He alleged that Patkar procured gold bars and gold biscuits, purportedly for distribution to politically exposed persons and BMC officials in order to secure favourable treatment during the contract execution and bill clearance.

However, justice Borkar noted that there was no direct evidence against Patkar. He held that the allegations of forgery and conspiracy, though serious, cannot justify the indefinite pre-trial custody, especially when co-accused people have either not been arrested or have been released on bail, like in the case of Dr Gupta.

“The nature of his actual involvement, the extent of his knowledge, and whether he acted with criminal intent, are all matters that require detailed examination during trial,” the court stated. Noting the same series of evidence and chain of transactions being used against both Patkar and Dr Gupta, the court stated that the prosecution’s attempt to compartmentalise the offence into “operational” and “financial” appears artificial at this stage.

“In view of the aforesaid circumstances, this court is of the opinion that the applicant is entitled to be released on bail,” the bench said.

With inputs from agencies