The Madras High Court on Monday highlighted the severe implications of money laundering on the economy, emphasizing that such activities perpetuate a vicious cycle that burdens the common man. The court stressed the necessity of conducting a free and fair investigation into these offenses.
A division bench, consisting of Justices S M Subramaniam and V Sivagnanam, overturned a local court’s decision that accepted a closure report filed by the Central Crime Branch (CCB) in a case against lottery baron S Martin and three others. The decision came after the Directorate of Enforcement challenged the local court’s ruling.
The case originated following the seizure of Rs 7 crore, leading the CCB to file charges against Martin and his associates. Subsequently, the Enforcement Directorate (ED) pursued a case under the Prevention of Money Laundering Act (PMLA).
In their ruling, the justices pointed out significant missteps in the local court’s acceptance of the closure report, which they found to be unjustified given the evidence and the serious nature of the allegations. The High Court’s decision reflects concerns over the handling of the investigation by state and central agencies, underscoring that any bias or unfair practices could undermine the objectives of the PMLA and ultimately fail to protect public and national economic interests.
“The closure report dated November 14, 2022, by the police in the predicate offense palpably appears to be wrong,” noted the bench. They criticized the State Investigating Officer’s conclusion of insufficient evidence and highlighted discrepancies in the documentation related to the case, such as the sale agreement and the issuance of stamp paper.
The bench also remarked on the procedural failures of the local judiciary, stating, “The impugned order passed by the Magistrate accepting the further action dropped report seems to be a mechanical one, passed without taking note of all relevant facts and materials available on record.” They lamented the local court’s reliance on the closure report without proper judicial scrutiny, which they said resulted in a miscarriage of justice.
