Under the provisions of the Prevention of Money Laundering, 2002 (PMLA), the Directorate of Enforcement (ED) provisionally attached the remaining plant and machinery at the site, building structures, and more than 200 acres of land of M/s Jalna Sahakari Sakhar Karkhana Ltd. on June 24, 2012, in a case involving the unauthorised sale of Cooperative Sugar Mills (Sahakari Sakhar Karkhana) “SSK” in Maharashtra State Co. Currently, M/s Arjun Sugar Industries Pvt. Ltd. is the legal owner of M/s Jalna SSK’s assets.
Based on an FIR from the Economic Offence Wing of the Mumbai Police with the date of 26.08.2019, ED has started an inquiry under the PMLA. The FIR mentioned above was filed in accordance with the Hon’ble Bombay High Court’s Order from August 22, 2019. In the aforementioned FIR, it is claimed that the then-officials and Directors of MSCB sold the cooperative SSKs to their relatives and/or private individuals for throwaway rates while omitting to follow the proper SARFAESI Act procedure.
According to investigations made under the PMLA, M/s Jalna SSK Limited was founded in 1984–1985 on around 235 acres of land, including 100 acres that the Maharashtra government provided free of charge. On March 31, 2002, the Jalna SSK was labelled as a non-performing asset (NPA) since it had not repaid the MSCB loan. As of September 30, 2008, MSCB has a loan due on Jalna SSK for Rs. 33.49 crores. Using the SARFAESI Act, MSCB took ownership of the aforementioned SSK on February 16, 2009, to recoup its debts. Then, on February 27, 2012, MSCB held an auction for M/s Jalna SSK with a reserve price of Rs. 42.18 Crore. Only two parties, M/s Tapadia Constructions Pvt. Ltd. and M/s Ajeet Seeds Pvt. Ltd., both from Aurangabad, took part in the auction.
The highest bidder, M/s Tapadia Constructions Pvt. Ltd., of Aurangabad, submitted an offer for Rs. 42.31 crores, whereas M/s Ajeet Seeds Pvt. Ltd. submitted a bid below the reserve price. The inquiry also showed a connection between the purchasers of bid documents and the successful bidders in the auction, as well as the fact that M/s Tapadia Constructions Pvt. Ltd. and M/s Ajeet Seeds Pvt. Ltd. both operate out of the same Jalna building. On the same day, or on December 3, 2012, MSCB issued a sale certificate to M/s Tapadia Construction Pvt. Ltd. after receiving the final payment of the sale amount. The SSK was not operated by M/s Tapadia Constructions Pvt. Ltd, and after 15 months had passed, the SSK and 235 acres of land in Jalna were purportedly transferred to M/s Arjun Sugar Industries Pvt. Ltd. Arjunrao Panditrao Khotkar and colleagues founded M/s Arjun Sugar Industries Pvt. Ltd. specifically to buy Jalna SSK Ltd. on May 8, 2012.
Shri Arjun Khotkar was on the board of directors of Maharashtra State Co-op Bank Ltd. from 1998 to 2004 according to an investigation conducted under the PMLA. He served as a director of Jalna SSK from 1997 until 2003. In addition, he has served as the elected head of the APMC in Jalna since 2007. Additionally, he served as a director for DCCB, Jalna from 1997 to 2004 and again from 2017 to the present. Further investigation by the PMLA revealed that Jalna SSK was an adjustment entity introduced by cash conversion using shell companies, whereas M/s Tapadia Construction Pvt. Ltd. paid MSCB approximately Rs. 10.56 Crore as an initial deposit.
Additionally, on December 3, 2012, M/s Arjun Sugar Industries Pvt. Ltd. was the source of Rs. 31.73 Crore. As a result, M/s Tapadia Constructions Pvt. Ltd. was merely acting as a stand-in buyer for others when it acquired Jalna SSK Ltd. from MSCB.
According to the inquiry, M/s Jalna SSK was sold for a price of Rs. 42.31 crores by suppressing the value, but an independent valuer hired by ED valued the assets and found that M/s Jalna SSK was worth around Rs. 78 crores at the relevant period. The government-approved valuer filed his Valuation Report, dated 20.01.2022, to ED, valuing the moveable assets of Jalna SSK in 2012 at Rs. 30 crore and its immovable assets at Rs. 48.38 crores. The PMLA inquiry also showed that Arjun Sugar Industries Pvt. Ltd. had sold the SSK’s essential equipment, such as the boiler, by claiming it was scrap.
It is important to note that the Sub-Divisional Officer, Jalna, declared the registry of Government land to M/s Tapadia Construction Pvt. Ltd. as null and invalid via an order dated 12.04.2018. This was done to halt the Unauthorized Sale of Government Land to a Private Entity.
The sale of SSK and consequently the properties of said SSK, which include Govt land of 100 acres, plant & machinery, Building & Structure which was acquired illegally (now owned by M/s Arjun Sugar Industries Pvt. Ltd), indicate the sale of SSK and consequently the properties of said SSK are being proceeds of crime. The ED investigation revealed the fraudulent mode and manner in which the bidding process was followed for the sale of SSK and subsequent distribution of assets of SSK among family-based businesses It should be noted that the aforementioned SSK has remained closed ever since. Further research is now being conducted.
