The Enforcement Directorate faced a major embarrassment on Friday when a Mumbai court rejected its plea seeking stud farm owner Mr Hasan Ali Khan's remand for custodial interrogation and granted him bail.

The Principal Sessions Court Judge, Mr M. L. Tahaliyani, while rejecting the agency's remand application for 14-day custodial interrogation of the controversial businessman, observed it had failed to back its charges in a money laundering case under the Prevention of Money Laundering Act.

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