HC lets off ex-MLA’s aide in ₹18.18 cr embezzlement case

The Bombay high court on Thursday discharged Saeed Khan Shergul Khan, arrested in a money laundering case related to embezzlement of funds of ₹18.18 crore from an educational institution headed by former Shiv Sena (Eknath Shinde) MLA Bhavana Gawali.

MUMBAI: The Bombay high court on Thursday discharged Saeed Khan Shergul Khan, arrested in a money laundering case related to embezzlement of funds of ₹18.18 crore from an educational institution headed by former Shiv Sena (Eknath Shinde) MLA Bhavana Gawali. The court said Khan cannot be held responsible for any financial misconduct in the Trust, as at the relevant time, he had neither control over the Trust’s finances nor any decision-making authority.

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“There is a conspicuous absence of a banking trail, documentary proof, or seizure of cash that could demonstrate a financial link between the applicant (Khan) and the alleged proceeds of crime,” said justice RN Laddha. “The prosecution (Enforcement Directorate) has not asserted that the applicant personally withdrew the alleged amounts.”

The judge further pointed out that the applicant did not exercise control over the collection or disbursement of fees, donations or other institutional receipts managed by the Trust.

ED had started the money laundering probe in 2021, based on an FIR registered in 2020 with the Risod police station in Washim district against office bearers of the Mahila Utakarsha Pratishthan Trust for allegedly misappropriating funds.

Khan was arrested by ED, claiming that he had submitted forged and fabricated documents to the Registrar of Companies to facilitate conversion of the Trust into a company, and went on to become a director on its board.

He was also accused of siphoning off funds collected from students enrolled in the Trust’s educational institutions and using the funds to purchase a property in Mumbai by securing a fictitious loan from a private finance firm. It was claimed that Khan siphoned off trust funds and transferred part of it - an amount of ₹3.58 crore - to a certain Deepak Prajapati, who allegedly helped him to convert it into a loan.

The 41-year-old resident of Pathri in Parbhani district had approached the high court after the special PMLA court rejected his discharge plea on January 13, 2025.

Justice Laddha found that the PMLA court order was not sustainable in law. The high court noted that an amount of ₹34 lakh was alleged to have been transferred from the trust to Khan’s bank account in two tranches in November 2019 and December 2019, but no inquiry was conducted as regards to the transfer of the funds through banking channels, to ascertain if the amount was paid as legitimate dues or otherwise.

As for the property purchased by Khan in Mumbai, the court noted that it was purchased through a court auction and the transaction was concluded by August 2019 - months before he assumed formal position in the Trust. “At the time of the alleged withdrawals and transactions, the applicant had no official capacity to conduct or authorise any financial dealings on behalf of the Trust,” the high court said.

The high court also noted that the Registrar of Companies had inquired into the allegation of submitting forged and fabricated documents and found no substance in the allegations.