The Enforcement Directorate (ED) approached the Supreme Court to challenge a stay order issued by the Madras High Court regarding a sand mining case. The High Court had set aside provisional attachment orders against several private contractors and ordered the release of the properties involved. The ED’s appeal seeks to reinstate these attachments and continue its investigation into the matter.
New Delhi: The Enforcement Directorate (ED) appealed to the Supreme Court following a Madras High Court ruling that dismissed money laundering proceedings against several private contractors linked to a sand mining scam.
The High Court also annulled provisional attachment orders against the contractors and ordered the release of the properties involved.
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A Supreme Court bench, comprising Justices Sanjiv Khanna and PV Sanjay Kumar, instructed the ED to submit a brief note on the implications of the 2022 Vijay Madanlal judgment regarding the provisional attachment of properties.
The Court has not yet issued a formal notice to the respondents.
Additional Solicitor General (ASG) SV Raju represented the ED, accompanied by advocate Zoheb Hossain, while Senior Advocate Mukul Rohatgi appeared for the contractors.
In its July 2024 decision, which is now being challenged, the High Court determined that the ED exceeded its authority by investigating illegal sand mining in Tamil Nadu, as such mining does not qualify as a scheduled offence under the Prevention of Money Laundering Act (PMLA).
On July 16, a bench of Justices MS Ramesh and Sunder Mohan had stayed the ED’s actions against a group of sand mining contractors in Tamil Nadu and annulled the provisional attachment orders against them.
This case revolves around allegations of illegal sand mining in five districts of Tamil Nadu. The ED has been probing the issue since September of the previous year and claims that the illegal activities have led to a loss of approximately Rs. 4,000 crore to the state’s finances.
Contractors K Govindaraj, Shanmugam Ramachandran, and K Rethinam petitioned the High Court to dismiss the ED’s proceedings, arguing that the agency lacked the jurisdiction to act under the PMLA.
They contended that the FIRs that prompted the ED’s actions did not demonstrate any proceeds of crime, and the interpretation of the ECIR and provisional attachment orders indicated that the ED had overstepped by investigating illegal sand mining without a registered FIR for a scheduled offence that would suggest the generation of criminal proceeds.
The High Court ruled in favor of the contractors, leading the ED to seek recourse in the Supreme Court.
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