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EXPLAINED: What Is Patra Chawl Money Laundering Case?

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By: Anand Singh
Updated: August 1, 2022 12:46
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NEW DELHI: After searching his premises in Mumbai early on Sunday morning, the Enforcement Directorate (ED) finally arrested Shiv Sena Rajya Sabha MP Sanjay Raut on the intervening night of Sunday and Monday.

The financial probe agency made the arrest in connection with the alleged money laundering in a case related to the redevelopment of Siddharth Nagar, famously known as Patra Chawl, in the suburb of Goregaon.

The Maharashtra Housing and Area Development Authority (MHADA), which took up the redevelopment project, awarded a contract to Guru Ashish Construction Pvt. Ltd. (GACPL), a sister concern of real estate firm Housing Development and Infrastructure Ltd (HDIL) for the redevelopment of Patra Chawl in 2008.

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Patra Chawl is owned by MHADA and is spread across a 47-acre plot that had 672 tenants.

After the award of the contract, a tripartite agreement was signed between GACPL, the tenants’ society of Patra Chawl and MHADA for redevelopment.

The GACPL was to develop flats for the 672 tenants, while the remaining land was to be developed and sold by the firm.

Pravin Raut, is a director at GACPL, as are HDIL promoter Rakesh Wadhawan and his son Sarang, who are accused in the multi-crore Punjab & Maharashtra Cooperative (PMC) Bank fraud case.

Pravin Raut, who is considered a close associate of Shiv Sena leader Sanjay Raut, was arrested by the ED in connection with the Patra Chawl case in February this year and is currently in judicial custody.

According to the tripartite agreement, the developer, the GACPL, had to pay rent to all 672 tenants every month till the completion of the flats since this was a redevelopment project. However, the rent was paid only till 2014-15, and the project was still not complete.

The tenants then started complaining about non-payment of rent, and the delay in completion of the project.

The ED claims that Pravin Raut and other GACPL directors misled MHADA, sold the floor space index (FSI) to nine private developers and collected ₹901.79 crores, without constructing either the redevelopment portion for the 672 displaced tenants or the portion for MHADA.

Meanwhile, the GACPL also launched another project called ‘Meadows’, and took a booking amount worth ₹138 crores from buyers.

The ED has claimed that the total proceeds through these “illegal activities” were to the tune of ₹1039.79 crores, and part of this was diverted to close associates and family members of Sanjay Raut.

The ED earlier in one of its statements said that Pravin Raut’s wife Madhuri gave ₹83 lakhs, a part of the alleged criminal proceeds, to Sanjay Raut’s wife Varsha, who later used the sum to buy a flat in Dadar.

Even around eight plots of land were purchased at Alibaug’s Kihim beach in the name of Varsha Raut and Swapna Patkar, the ED has alleged. Swapna Patkar is the wife of Sujit Patkar, who is another associate of Sanjay Raut, the ED had claimed.

The ED has also alleged that after the investigations began, Varsha Raut transferred ₹55 lakhs to Pravin Raut’s wife Madhuri.

In April, the ED had attached properties worth ₹11.15 crores of Varsha Raut as well as Sanjay Raut’s associates.

The Alibaug land deal is also being probed by the ED as it suspects that laundered money was used for the purchase.

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