R.K.M Powergen Private Limited Vs Assistant Director (Madras High Court)
Madras High Court held that the PMLA demands the existence of a predicate offence. When there is no predicate offence, initiation of proceedings under PMLA is a non starter. Thus, no predicate offence, no action by ED.
Facts- R.K.M.Powergen Private Limited was set up for the purpose of creating, establishing and operating coal powered electricity generation plant. The Central Bureau of Investigation (CBI) was called upon to investigate each of the allocations and take appropriate action. CBI registered a case in FIR for the offences under Sections 420 and 120B of the Indian Penal Code read with Section 13(1)(d) of the Prevention of Corruption Act, 1988.
On the registration of the offences, the Enforcement Directorate registered a case on 07.01.2015. Investigation was taken up under the provisions of the Prevention of Money Laundering Act, 2002. The ED came to a prima facie conclusion that there appeared to be an offence of money laundering as defined under Section 3 of PMLA. Consequently, it passed an order on 22.05.2015, freezing all the bank accounts of RKMP.
After the withdrawal of the SLP, ED conducted a search from 31.01.2025 to 01.02.2025 in the premises of the Directors & holding companies associated with RKMP. On the very same day, on 31.01.2025, a freezing order was passed u/s. 17(1A) of PMLA. By that order, the fixed deposit to the tune of Rs.901,00,00,000/- was frozen by the ED. The present writ petition challenges the said order.
