₹ 975 Cr Bank Fraud: Palghar-Based Textile Firm Owner Gets Bail Within A Week; Mumbai Court Says Arrest 'Illegal'

Mumbai: In the Rs 975 crore bank fraud case against Palghar-based textile firm owner Purushottam Mandhana, 70, the special court for the Prevention of Money Laundering Act (PMLA) on Thursday held his arrest “illegal”.

Mandhana is the promoter and chairman of Mandhana Industries Ltd (MIL). He was arrested on July 19 and remanded to the custody of the Enforcement Directorate (ED) till Thursday. The court said that the prosecution failed to provide reasons for the investigating officer to believe that Mandhana is guilty of money laundering.

After his arrest, Mandhana’s lawyers had approached the High Court (HC), which was to hear the businessman’s plea on Monday. On Thursday, he was produced before the special court, when his lawyer pointed out that he was not provided a copy of ‘reasons’ for the investigating officer to believe that he was involved in money laundering.

ED's Argument Over Grounds Of Arrest

The ED prosecutor Sunil Gonsalves argued that Mandhana was informed about the grounds of arrest but the copy of ‘reasons to believe’ was given to the court in a sealed envelope at the time of first remand. Besides, it was argued that the petition in this regard has already been moved before the HC.

Special judge AC Daga referred to the ruling of the Supreme Court in the case of Arvind Kejriwal wherein it was held that, “in case certain part of the ‘reasons to believe’ is not required to be shown to the accused then it is for the court to consider and decide as to whether a part from the document is required to be withheld or not”. The court observed that in this matter no such application was moved by the prosecution.

The ED has, however, asked for a stay on the order as the Mandhana’s petition is scheduled for hearing before the HC on Monday. The court refused to stay the order, which the ED is planning to challenge before the HC.