The party also termed as "mild" the decision of Fadnavis to order a probe by a retired High Court judge into the allegations against Khadse.
Khadse, facing a string of allegations including the demand for a hefty bribe made by his PA in a land matter and purchasing a reserved land near Pune in name of his kin for a throwaway price, resigned on Saturday.
"It has been proved that Khadse has underworld links so MCOCA should be applied in this case," Mumbai unit Congress chief Sanjay Nirupam said, referring to alleged calls made from Dawood's residence in Karachi to the former minister's mobile.
"Merely dismissing Khadse from the cabinet won't suffice. He should be charged under the MCOCA," Nirupam said in a letter to Fadnavis.
"It is alright that after dilly-dallying for two months, you made Khadse quit. However, announcing a probe headed by a retired High Court judge won't be enough. This decision is mild and raises questions about the intentions of the Fadnavis government," the Congress leader said.
Nirupam said the provisions of the Prevention of Corruption Act should be applied as Khadse misused his official powers to get the Maharashtra Industrial Development Corporation (MIDC) plot for his wife and son-in-law.
"This move of Khadse violated provision of sections 13 (C, D and E) of this Act. BJP always talks of morals and values but in the Khadse case, not enough action has been taken," Nirupam said.
Khadse had already denied the allegations that he had any links with Dawood after his mobile number purportedly figured in the call list of Dawood's Karachi residence, acquired by an ethical hacker.
Though Mumbai police had given the minister a clean chit in the matter, the state Anti-Terrorism Squad was directed to probe the charges.
The seniormost BJP leader was also in a spot over the purchase of a three-acre MIDC land near Pune allegedly at a low price of around Rs 3.75 crore from its original owner in the name of his wife and son-in-law. The market value of the land is reportedly Rs 40 crore.
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