While 12 other charged persons will now face trial, Chavan, who lost his job for alleged collusion with the promoters of Adarsh society, will be absolved of all charges against him.
Disappointed by the development, CBI sources said they had strong evidence against Chavan and they had made an extensive presentation to the Maharashtra governor to back up their request for sanction to prosecute the former Maharashtra CM.
Investigators examined 150 witnesses and attached 160 documents from various departments as proof in its chargesheet against Chavan.
In the charge-sheet, the probe agency had accused Chavan of approving additional FSI (floor space index) to Adarsh society in exchange for two flats for his relatives. Besides, Chavan was also charged with illegally approving as revenue minister the allotment of 40% of the flats to civilians when the society was meant for Kargil war widows and defence personnel.
Chavan had to quit as CM after TOI exposed the scam in 2010.
Chavan objected to the charge-sheet against him on the ground that the CBI had not sought sanction as required to prosecute him. The argument was upheld by the court which forced the agency to seek sanction from the governor.
CBI sources agreed that the governor's decision left them with no option insofar as Chavan's prosecution is concerned.
"We had said that we didn't require sanction to prosecute Chavan since he was not a minister at the time of filing the charge-sheet. Now it is for the court, which did not agree with us, to decide on the future course of action," a CBI official said.
The agency had given a clean chit to two former Maharashtra CMs, Sushil Kumar Shinde and Vilasrao Deshmukh, in the scam.
Apart from Chavan, CBI had named senior bureaucrats Jairaj Phatak and Pradeep Vyas in its Adarsh charge-sheet. The agency is also waiting for prosecution sanctions for bureaucrats from central and state governments, said sources.
CBI had started a probe after a series of reports by TOI highlighting allegations that Adarsh was built on military land in Colaba and that politicians and bureaucrats had flats in a society meant for serving and retired defence personnel and their kin.
In its allegations against Chavan, CBI had said in the charge-sheet that he had returned Rs 69 lakh, allegedly received by him from his 'close aide Jayant Shah to purchase flats for his relatives at the Adarsh, soon after the scandal was unearthed and a PIL was filed in the Bombay High Court in 2010.
CBI had said that Chavan had received Rs 70 lakh from Malav, son of Jayant Shah, as payment towards purchasing the flats for Chavan's relatives in the 31-storey building in south Mumbai.
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