The Bombay High Court on Tuesday penalized the Enforcement Directorate with a cost of ₹1 lakh for launching a money laundering investigation against a real estate developer without "proper application of mind."

Emphasizing the importance of adhering to legal frameworks, Justice Milind Jadhav, presiding over the single bench, remarked that a "strong message" must be conveyed to law enforcement agencies to prevent harassment of citizens.

The High Court set aside the summons issued to Mumbai-based real estate developer Rakesh Jain by a special court in August 2014, which was based on a prosecution complaint filed by the Enforcement Directorate. Justice Milind Jadhav stressed that it is "high time central agencies like the ED refrain from taking the law into their own hands and harassing citizens."

The Enforcement Directorate initiated a money laundering investigation against Mumbai-based developer Rakesh Jain based on a police complaint filed at the Vile Parle police station by a property purchaser alleging breach of agreement and cheating. However, Justice Milind Jadhav, in his ruling, observed that no case was made out against Jain, rendering the money laundering charges unsustainable. The High Court further stated that the actions of both the complainant and the ED in triggering the criminal process against Jain were "clearly malafide" and warranted the imposition of exemplary costs.

"I am compelled to levy exemplary costs because a strong message needs to be sent to the law enforcement agencies like ED that they should conduct themselves within the parameters of law and that they cannot take law into their own hands without application of mind and harass citizens," Justice Jadhav said.

The court directed the Enforcement Directorate to deposit the ₹1 lakh cost to the High Court library within four weeks. Additionally, a cost of ₹1 lakh was imposed on the original complainant, the property purchaser, which is to be paid to the city-based Kirtikar Law Library. 

The High Court emphasized that money laundering is an offense committed with deliberate intent and a motive to secure personal gains, disregarding the broader interests of the nation and society. "Conspiracies of money laundering are hatched in secrecy and executed under the cover of darkness. The present case is a classic example of oppression disguised as enforcement of the Prevention of Money Laundering Act (PMLA)," the judgment observed. 

On the request of ED advocate Shriram Shirsat, the court stayed its judgment for one week to allow the agency time to approach the Supreme Court for an appeal.