A division bench comprising Justices MS Ramesh and V Lakshminarayanan observed that offences can be brought to the notice of the police or appropriate authorities by the ED.
Published Jul 21, 2025 | 11:00 AM ⚊ Updated Jul 21, 2025 | 11:00 AM
Madras High Court. (Wikimedia)
Synopsis: The Madras High Court ruled that the ED is not a “super police” empowered to investigate everything that comes to its notice. The court made the remark while quashing the ED’s order freezing fixed deposits belonging to a private power generation company.
The Madras High Court ruled that the Enforcement Directorate (ED) is not a “super police” empowered to investigate everything that comes to its notice. The court made the remark on 15 July while quashing the ED’s order freezing fixed deposits worth ₹901 crore belonging to a private power generation company in Tamil Nadu.
In 2006, based on a Supreme Court directive related to coal block allocation irregularities, the CBI registered a case against Chennai-based RKM Powergen. Following this, the ED also filed a case under the Prevention of Money Laundering Act, 2002.
Hearing a plea filed by RKM Powergen challenging this action, a division bench comprising Justices MS Ramesh and V Lakshminarayanan observed that offences can be brought to the notice of the police or appropriate authorities by the ED.
In January this year, based on a supplementary chargesheet filed by the CBI, the ED conducted searches at locations linked to RKM Powergen and ordered the freezing of fixed deposits worth ₹901 crore belonging to the company.
In this case, no formal complaint had been lodged. The court said the ED cannot assume the role of a “super police” to probe everything that comes to its notice and quashed the agency’s order to freeze the fixed deposits.
“The ED is not a super cop to investigate anything and everything which comes to its notice. There should be a ‘criminal activity’ which attracts the schedule to PMLA, and on account of such criminal activity, there should have been ‘proceeds of crime’. It is only then the jurisdiction of ED commences. The terminus a quo for the ED to commence its duties and exercise its powers is the existence of a predicate offence. Once there exists a predicate offence, and the ED starts investigation under the PMLA, and file a complaint, then it becomes a stand alone offence,” the court said, reported LiveLaw.
The court emphasised that, under Section 66(2) of the PMLA, if the ED comes across a breach of the law during its investigation, it cannot take on the role of an investigating agency for those offences as well.
According to the law, the ED is required to notify the appropriate authority, which would then undertake the investigation. The court further stated that if, following its inquiry, the concerned agency does not find any case based on the ED’s observations, it cannot suo motu investigate or assume investigatory powers.
(Edited by Muhammed Fazil with inputs from Subash Chandra Bose.)
