MSCB and sugar mills case: Special court accepts closure report by economic offences wing of Mumbai police

Mumbai: The closure report of the Mumbai police's economic offences wing (EOW) in the MSCB scam has contradicted the Enforcement Directorate's earlier claims of "suspicious financial links" and "rigged bidding" across four major sugar mills. The special court has accepted the closure report.The ED had alleged cheating, misconduct, and money laundering in the auctioning of the four sick mills and linked the suspicious transactions with the kin of the late Ajit Pawar, his wife Sunetra Pawar, former Shiv Sena minister Arjun Khotkar, and companies of NCP (SP) leaders Rohit Pawar and Prajakt Tanpure. On Feb 27, the court rejected the ED's second plea to intervene on the grounds that an appeal against the rejection of the first plea was still pending in the Bombay high court. On the same day the court accepted the EOW's closure report.Jarandeshwar Cooperative Sugar Mill, was sold by MSCB for Rs 65.75 crore to Guru Commodity Pvt Ltd in 2010. Immediately Guru Commodity gave the mill to a newly incorporated private company with the same name, Jarandeshwar Sugar Mills Ltd, on lease for an annual charge of only Rs 12 lakh. "The funds utilized for the purchase of the mill in the auction were mainly sourced from Jarandeshwar Sugar Mills, which in turn received Rs 20 crore from Jay Agrotech Pvt Ltd., a company in which Sunetra Pawar is a director," said the ED in its application. Ajit Pawar's maternal uncle Rajendra Ghadge was then a director of the bank. Special judge Mahesh Jadhav cited a previous Bombay high court verdict that had already quashed criminal complaints regarding this mill. In the case of Jalna Sugar Cooperative Mill, the ED alleged that Tapadia Construction acted as a proxy for Arjunrao Khotkar, using shell company funds to win the auction before selling the mill to Khotkar's Arjun Sugar Industries. The judge noted that the auction took place in 2012 under RBI-appointed administrators. The judge also noted that sale price of Rs 42.31 crore was higher than the reserve price and nearly Rs 9 crore more than the mill's outstanding dues. "Record reflects that, there was no pre-arrangement between the Tapadia Construction Ltd and Arjun Sugar Industries prior to the auction that Jalna SSK would be purchased by the Tapadia Construction Ltd and onward sold to Arjun Sugar Industries," the judge said.The judge also said that there is no prohibition in law for further sale to the competing bidder. In another instance related to Ram Ganesh Gadkari SSK, the ED claimed this mill was sold to a firm linked to Prajakt Tanpure for Rs 12.95 crore, a price they alleged was well below market value, involving a "facade" of two bidders that were actually one entity.The judge found that the bank actually recovered additional funds from the government following the sale, ensuring no loss was caused. It also noted that no proceedings had ever been initiated to challenge the validity of the sale under the SARFAESI Act at the time of the transaction. In the case of Baramati Agro (Kannad Sugar Mill), the ED flagged a Rs 5 crore payment from MLA Rohit Pawar's Baramati Agro to a co-bidder, Hitech Engineering, alleging it was used to "create a facade" of competition. However, the court noted Baramati Agro's strong financial standing, noting its significant profits and reserves.