Madras HC Slams ED: Says Agency Not a ‘Super Cop’ or ‘Loitering Drone’ Under PMLA

Updated on 2025-07-21T15:24:26+05:30

Madras HC Slams ED: Says Agency Not a ‘Super Cop’ or ‘Loitering Drone’ Under PMLA

Madras HC Slams ED: Says Agency Not a ‘Super Cop’ or ‘Loitering Drone’ Under PMLA

The Madras High Court strongly criticized the Enforcement Directorate (ED), stating that it cannot operate like a "super cop" or act as a "loitering munition or drone" to investigate cases arbitrarily. The court emphasized that the ED's powers under the Prevention of Money Laundering Act (PMLA) are conditional and can only be invoked when a scheduled offence also called a predicate offence exists, and when identifiable “proceeds of crime” emerge from such an offence.

 A bench of Justices M.S. Ramesh and V. Lakshminarayanan made these observations while overturning an ED order issued under Section 17(1A) of the PMLA, which froze fixed deposits worth ₹901 crore belonging to RKM Powergen (RKMP). The company had received a coal block allocation that was later deemed illegal by the Supreme Court for being in a reserved forest, prompting a CBI probe. Despite this, the ED initiated its own inquiry and froze RKMP’s assets.
 
The court ruled that the ED lacked proper jurisdiction and had no clear evidence of proceeds of crime. It stated that even when a predicate offence is established, ED action still requires specific proof linking assets to the crime. Using a metaphor, the court noted, “the predicate offence and proceeds of crime are like a ship without them, the ED, like a limpet mine, has nothing to attach to.”