Mumbai Court Accepts EOW Closure Report in MSCB Scam, Contradicting ED Allegations
In a significant development, a special court in Mumbai has accepted the closure report filed by the Mumbai police's Economic Offences Wing (EOW) regarding the Maharashtra State Cooperative Bank (MSCB) sugar mill scam. This decision directly contradicts earlier claims made by the Enforcement Directorate (ED), which had alleged "suspicious financial links" and "rigged bidding" across four major sugar mills involved in the case.
Court Rejects ED Intervention Pleas
The special court, presided over by Judge Mahesh Jadhav, accepted the EOW's closure report on February 27. On the same day, the court rejected the ED's second plea to intervene in the matter. The court noted that an appeal against the rejection of the ED's first plea was still pending in the Bombay High Court, making further intervention inappropriate at this stage.
The ED had leveled serious allegations of cheating, misconduct, and money laundering in the auctioning of four sick sugar mills. These allegations were linked to several high-profile individuals, including:
- Kin of the late Ajit Pawar and his wife Sunetra Pawar
- Former Shiv Sena minister Arjun Khotkar
- Companies associated with NCP (SP) leaders Rohit Pawar and Prajakt Tanpure
Detailed Examination of Individual Mill Cases
The court provided detailed reasoning for accepting the closure report, examining each of the four sugar mills separately:
Jarandeshwar Cooperative Sugar Mill: This mill was sold by MSCB for Rs 65.75 crore to Guru Commodity Pvt Ltd in 2010. The ED had alleged that funds for the purchase came from Jarandeshwar Sugar Mills Ltd, which received Rs 20 crore from Jay Agrotech Pvt Ltd—a company where Sunetra Pawar serves as director. The ED also noted that Ajit Pawar's maternal uncle, Rajendra Ghadge, was a director of the bank at the time.
However, Judge Jadhav cited a previous Bombay High Court verdict that had already quashed criminal complaints regarding this mill, undermining the ED's allegations.
Jalna Sugar Cooperative Mill: The ED claimed 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 court found that the auction occurred in 2012 under RBI-appointed administrators and that the sale price of Rs 42.31 crore exceeded both the reserve price and the mill's outstanding dues by nearly Rs 9 crore.
The judge explicitly stated: "Record reflects that there was no pre-arrangement between Tapadia Construction Ltd and Arjun Sugar Industries prior to the auction." The court also noted that no legal prohibition exists against further sale to a competing bidder.
Ram Ganesh Gadkari SSK: The ED alleged this mill was sold to a firm linked to Prajakt Tanpure for Rs 12.95 crore—a price they claimed was well below market value—involving a "facade" of two bidders that were actually one entity. The court found that the bank actually recovered additional funds from the government following the sale, ensuring no financial loss occurred. It also noted that no proceedings had been initiated to challenge the sale's validity under the SARFAESI Act at the time of transaction.
Baramati Agro (Kannad Sugar Mill): The ED flagged a Rs 5 crore payment from MLA Rohit Pawar's Baramati Agro to co-bidder Hitech Engineering, alleging it was used to "create a facade" of competition. The court, however, noted Baramati Agro's strong financial standing, including significant profits and reserves, casting doubt on the ED's characterization of the transaction.
Implications and Next Steps
This court decision represents a substantial setback for the Enforcement Directorate's investigation into the MSCB sugar mill scam. By accepting the EOW's closure report and rejecting the ED's intervention pleas, the court has effectively dismissed allegations of systematic wrongdoing in the auction processes.
The case highlights the complex interplay between different investigative agencies and the judicial system in high-profile financial matters. While the ED may pursue its pending appeal in the Bombay High Court, the special court's detailed findings present significant challenges to their allegations of rigged bidding and money laundering involving political figures and their associates.
The MSCB scam has been a contentious issue in Maharashtra politics for years, with allegations frequently surfacing during election seasons. This court decision may have broader implications for political narratives surrounding cooperative bank transactions and allegations of financial misconduct in the state's sugar industry.
