States » SouthPosted at: Oct 13 2026 4:27PM


Madras HC quashes money laundering case against Ex-DMK Minister Ponmudy

Chennai, Oct 13 (UNI) The Madras High Court on Tuesday quashed a money laundering case registered by the Enforcement Directorate (ED) against senior DMK leader and former Tamil Nadu Minister K.Ponmudy, his son and former Lok Sabha MP Gautham Sigamani and others in connection with the red sand quarrying scam, which was pending before a Special Court in Chennai.
The First Bench comprising Chief Justice S A Dharmadhikari and Justice G Arul Murugan observed that the case under Prevention of Money Laundering Act (PMLA) registred by the ED based on the predicate offence, had ended in the acquittal of Ponmudy and others. The Bench, citing the Supreme Court judgment in Vijay Madanlal Choudhary vs union of India, the bench noted that ED against Ponmudi and others could not continue.
After the State informed it was considering an appeal against the order of acquittal, the Bench gave liberty to the ED to proceed as per law, in case of any development in the predicate offence, while observing that it was open for the respondent to take action as per law,
in view of the subsequent action in the predicate case.
Ponmudy had approached the court stating that the ED had registered the enforcement case based on the FIR registered by the District Crime Branch, Villupuram. The predicate offence was registered against Ponmudi, his son, and others for offences under Secs 379, 406, 420, 120-B IPC, Section 21(1) of Mines and Minerals (Development and Regulation) Act, 36 (A) MMDR Rules.
The prosecution case was that while serving as the Minister of Mines and Minerals between 2007-11 during the erstwhile DMK regime, Ponmudy had entered into a criminal conspiracy with his son and others and allocated licenses to red sand quarrying to his son, his friend, and his brother-in-law, and that the license holders had quarried red earth over and above the permitted quantities without paying seigniorage fees to the government, causing a wrongful loss of Rs 28.37 crore to State exchequer.
The Villupuram District Sessions court, which heard the case against Ponmudy, his son and relative Rajamahendran, acquitted all the accused in April this year.
In the meantime, since the act was a scheduled offence, the ED registered an ECIR under Section 44(1)(b) and 45 of PMLA punishable under Section 4 of the PMLA, read with Section 70 and 8(5) of the PMLA. The case was pending at the stage of framing of charges. Ponmudy argued that the Sessions Court, while acquitting him of all charges, noted that there was no nexus between the grant of the lease and alleged illegal gain or conspiracy. It had also observed that there was no procedural irregularity or statutory violation while granting the quarry license.
The court also noted that the prosecution had failed to prove entrustment, dominion over property and dishonest misappropriation. Hence, Ponmudy submitted that as per settled proposition of law, once an accused was discharged/quashed/acquitted from the predicate offence, then the prosecution under the PMLA would no longer exist and was liable to be quashed and that any incidental action by the ED would also become infructuous.
The First Bench allowed the arguments submitted by Ponmudy and quash the PMLA case on the ground that the predicate offence has ended in his acquittal.
UNI GV 1625
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