The party action came soon after Ghosi, the Maharashtra Unit Vice President of the party, wrote to the party supremo Mulayam Singh Yadav requesting that Memon's wife Raheen be made a party nominee for the RS seat, triggering sharp reactions from the BJP, Shiv Sena and Congress.
The demand came two days after Memon was hanged in the Nagpur Central Jail.
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"Raheen too has undergone lots of difficulties. Being the wife of a terrorist does not make her a terrorist," he said.
SP state unit president Abu Azmi said the action against Ghosi was taken for going to the media with his demand without consulting the party president.
"We have suspended him for anti-party activities.Any individual has to consult his party President before making statements in the media. His comments show that he is only interested in staying in the limelight. He will be served a show cause notice and asked to explain his stand," Azmi told PTI.
Ghosi said he had only written what was in his heart and that he stood by the contents of his letter. He, however,added he still drew inspiration from Mulayam Singh, who says that whatever one has in his heart should be expressed fearlessly.
"In my letter I had written what I felt from my heart. I had also asked Mulayam Singhji to forgive me if I stated something wrong in my letter. Inspite of all this, if the party feels I have done something wrong, they are free to suspend me. But, I stand by my letter. I will surely explain my stand to the leadership if I get a chance," he said.
SP spokesman Rajendra Chaudhary said the demand should not be seen as view of the party.
Dubbing Ghosi's statement as "irresponsible in nature", Shiv Sena urged the media not to blow such things out of proportion.
"I feel there are people who are not politically mature but seek to make political mileage out of any situation. SP has removed Ghosi but they should think on how can a person from their party make a statement that challenges the Supreme Court decision," party spokesperson Neelam Gorhe said.
Other political parties too slammed Ghosi's demand saying that the Yakub was hanged on the Supreme Court orders and that the matter should not be politicised.
Congress leader Sachin Sawant said Ghosi's comments are part of a "tactical agenda" to communalise the issue.
BJP spokesperson Madhav Bhandari dubbed Ghosi's remarks as "sheer exploitation of vote-bank politics.
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