Two men arrested by ED for ‘illegal dealing’ of properties of Dawood aide

The ED claims that these three properties “appear to be proceeds of crime” derived directly or indirectly from the criminal activity related to the offences registered against Mirchi by Mumbai Police over 30 years ago. “The two accused appear to have played an active role in laundering the proceeds of the crime and hiding the criminal origins of the property,” ED counsel Hiten Venegaonkar submitted before the court.

The ED claims that Mirchi was booked by Mumbai Police in various cases, including murder, smuggling of narcotics and arms, as well as extortion dating back to 1992. He had allegedly gathered huge amounts through these illegal activities and invested them in various properties in India and abroad through layered transactions, projecting them as untainted properties. He subsequently fled from India, and various courts issued orders to attach his properties.

The ED alleges that while gathering information on assets owned by him, it was found that Mirchi had purchased three properties in Worli belonging to a Mumbai-based Trust in 1986 for Rs 6.5 lakh through a company owned by him. It is alleged that the ownership of the property could not be transferred to Mirchi at the time of the deal and it remained in the name of the Trust on paper with him having ‘deemed ownership’.

The ED claims that in 2005, an order to confiscate these three properties was quashed by a court on the ground that they belonged to the Trust. The agency claims that the Trust was able to restore the properties in its name by not disclosing receipt of complete payments from Mirchi and documents which showed that he was given their possession in 1991.

After the confiscation of the three properties was quashed, Mirchi, through his close aide, approached a developer and entered an agreement to develop the property after a meeting with him in London. A deal was made for the three properties at Rs 11 crore, but as the amount was not paid and the property prices rose, Mirchi allegedly threatened the developer to leave the property.

The ED claims that the Trust, which claimed to be the owner, had only received Rs 25 lakh as per records for the deal. “It is apparent that the real ownership of the said property was with Mirchi and the Trust was a mere cover of Mirchi, acting as per his directions,” the ED claimed in its remand application on Friday.

In 2010, another private developer entered the fray and paid Rs 225 crore for the project, of which Rs 127 crore was paid and the remaining was to be paid by next month. The ED claimed that Bindra had received brokerage of Rs 30 crore for the deal and that Yusuf had “misrepresented” that the Trust had received complete payment from Mirchi. The ED also claims that dummy tenants were planted in the properties over the years by Mirchi through his aides. It claims that a witness statement revealed that a payment of 90 million dirhams was made through hawale in UAE for the purchase of a five-star hotel in Dubai in 2010. “From the same, it is suspected that deal may have been finalised on much more amount than Rs 225 crore and the same has been utilised for the purchase of the property overseas,” the ED said.

The lawyers representing the accused stated that the alleged deals were with regard to deals made in 1986, when the Prevention of Money Laundering Act was not enacted, and hence it cannot be invoked retrospectively. Bindra’s lawyer also said that he was merely a broker and had struck the deal between the Trust and the developer. He claimed that only Rs 1 crore was received by him as brokerage.