The Enforcement Directorate (ED) has approached the Supreme Court, appealing against a Madras High Court order that halted money laundering proceedings against several contractors implicated in a Tamil Nadu sand mining scam. The High Court had also rescinded provisional attachment orders, releasing properties tied to the allegations.
The appeal was taken up by a bench of Justices Sanjiv Khanna and PV Sanjay Kumar, who directed the ED to furnish a concise note on the impact of the 2022 Vijay Madanlal judgment concerning provisional property attachments. The Supreme Court has not issued a formal notice to the respondents yet.
During the proceedings, Additional Solicitor General SV Raju and advocate Zoheb Hossain represented the ED, while the contractors were represented by Senior Advocate Mukul Rohatgi.
The case stems from a July 2024 High Court ruling, which found that the ED had exceeded its investigative powers. The High Court ruled that illegal sand mining does not constitute a scheduled offence under the Prevention of Money Laundering Act (PMLA), thus questioning the jurisdiction of the ED to proceed with its investigations and property attachments.
Previously, on July 16, Justices MS Ramesh and Sunder Mohan of the Madras High Court had stayed ED actions against the contractors and nullified the provisional attachment orders. This ruling came after contractors K Govindaraj, Shanmugam Ramachandran, and K Rethinam challenged the ED’s proceedings, arguing that the initial FIRs did not establish any proceeds of crime, and that the ED had improperly expanded its probe into sand mining without a registered FIR for a scheduled offence indicative of criminal proceeds generation.
The ED contends that these activities have caused a significant financial loss to the state, estimated at around Rs. 4,000 crore, due to illegal sand mining operations across five districts in Tamil Nadu.
