PMLA court remands Suraj Chavan to ED custody till January 22

Chavan, believed to be a close aide to Aaditya Thackeray, was arrested on Wednesday evening and was produced before special judge SN Patil on Thursday when a special prosecutor for ED sought his custody remand, claiming that the accused had played a very crucial role in money laundering

MUMBAI: A special PMLA court (Prevention of Money Laundering Act) on Thursday remanded Suraj Chavan, a Shiv Sena (UBT) party functionary, in the custody of the Enforcement Directorate (ED) till January 22, 2024, in the money laundering case related to irregularities in the distribution of Khichadi to migrant workers during Covid 19 pandemic.

Mumbai, India - Jan. 5, 2014: Suraj Chavan taken to Session court from ED Office, Ballard Estate, in Mumbai, India, on Sunday, January 5, 2014. (Photo by HT Photo/ Hindustan Times) (Hindustan Times)

Chavan, believed to be a close aide to Aaditya Thackeray, was arrested on Wednesday evening and was produced before special judge SN Patil on Thursday when a special prosecutor for ED sought his custody remand, claiming that the accused had played a very crucial role in money laundering.

“Sustained interrogation under custody is required to unearth the trail of funds, for corroboration and confrontation with other persons involved in the case. Suraj Chavan served as a key link in the fraud to BMC/MCGM. During the investigation, the accused has presented forged documents, to project himself as an employee of M/s Force One Multi Services and has wrongly claimed the acquired proceeds of crime, projecting the same as untainted money,” stated the remand application submitted by Gonsalves to the special court.

The ED began its investigation based on a September 2023 FIR of the Economic Offences Wing (EOW) of the Mumbai police, alleging that there were irregularities worth ₹6.37 crore distribution of Khichadi. The ED’s investigation was part of a probe into the BMC’s expenditure on Covid-19 contracts.

The application added that BMC/MCGM paid ₹8.64 crore to M/s Force One Multi Services for supplying Khichdi packets, however, it resorted to illegitimate acts and illegally gained ₹3.64 crore of public money. It is further that the firm was engaged in the provision of sand, bricks and security did not have its own kitchen and had no licence from the Department of Health or the Food and Drugs Administration. It added that it was because of his proximity with senior political leaders that Chavan had managed to get the contract awarded to M/s Force One Multi Services.

Advocate Harshad Bhadbhade, representing Chavan, opposed the plea arguing that the grounds of his arrest were not communicated to him and the only reason behind the arrest as mentioned in the remand application was because he gave evasive answers during his questioning.

“The remand application fails to mention the need for custodial interrogation of the accused and the scheduled offence under which he has been accused. There is no compliance with the law, rather everything is totally contrary to it. The ED is clearly abusing the process of law,” Bhadbhade added.

After hearing both sides, special judge SN Patil remanded Chavan to ED custody till January 22.

The ED probe revealed that the Chavan allegedly received ₹1.35 crore from an accused contractor firm, M/s Force One Multi Services, out of the latter’s illegal generation of proceeds of crime worth ₹3.64 crore, agency sources said. This was done by allegedly showing him as an employee of the firm since 2019-20 and the funds were transferred to him as salary, and some in the form of loans, during June 2020 to December 2020, agency sources said. Out of the alleged funds, ₹1.25 crore was allegedly diverted into the personal bank account of Chavan and ₹10 lakh into the bank account of his partnership firm, Fire Fighters Enterprises.

ED sources also said that to justify the alleged payments, two forged and back - dated appointment letters, dated April 1 of 2019 and April 1 of 2020, were prepared in the name of Chavan in order to project him as an employee of M/s Force One Multi Services.

Chavan denied any wrongdoing and claimed that the funds of ₹1.35 crore that he and his firm received from the accused firm, M/s Force One Multi Services, were allegedly by way of salaries and loan for being its employee and for his services in the supply of Khichadi.

The ED accused Chavan of managing the award of one of the civic khichdi work - orders to Force One due to his proximity of with senior political leader/ influential persons. It was revealed in the probe that Chavan allegedly played no role in the supply of khichdi packets to the BMC. It was alleged in the police FIR that the accused firm M/s Force One Multi Services did not have its own kitchen and had no license from the Department of Health or the Food and Drug Administration. It was allegedly engaged in the provision of sand, bricks and security.