The Madras High Court on Tuesday (13 October 2026) quashed the money laundering case registered against former Tamil Nadu Minister K Ponmudi under the Prevention of Money Laundering Act (PMLA), which was pending before the Special Court in Chennai. The decision followed Ponmudi’s acquittal in the predicate offence on which the Enforcement Directorate (ED) had registered the case, as reported in LiveLaw.
A bench comprising Chief Justice SA Dharmadhikari and Justice G Arul Murugan observed that since the predicate offence had ended in the acquittal of Ponmudi and the other accused, the PMLA proceedings could not continue. The bench relied on the Supreme Court’s judgment in Vijay Madanlal Choudhary v. Union of India.
“Admittedly, the trial court, by judgment dated April 2, 2026, acquitted all accused facing trial in the case. Since the predicate offence against all the accused ended in acquittal as per the decision of the Supreme Court in Vijay Madanlal Choudhary v. Union of India, the proceedings against the petitioners cannot continue,” the bench said.
However, after being informed that the State was considering an appeal against the acquittal, the High Court gave the ED liberty to proceed in accordance with the law if there was any subsequent development in the predicate case.
“However, it is open for the respondent to take action as per law, in view of the subsequent action in the predicate case,” the court added.
Background Of The Case
Ponmudi had approached the High Court challenging the ED’s enforcement case, which was registered on the basis of an FIR filed by the District Crime Branch, Villupuram.
The predicate offence was registered against Ponmudi, his son and others under Sections 379, 406, 420 and 120-B of the Indian Penal Code (IPC), Section 21(1) of the Mines and Minerals (Development and Regulation) Act, and Rule 36(A) of the MMDR Rules.
The prosecution alleged that Ponmudi, while serving as the Minister for Mines and Minerals between 2007 and 2011, had entered into a criminal conspiracy with his son and others to allocate licences for red-earth quarrying to his son, his friend and his brother-in-law.
According to the allegation, the licence holders extracted red earth beyond the permitted quantities without paying the government the required seigniorage fees, allegedly causing a wrongful loss of ₹28,37,65,600 to the State.
Since the alleged offence was a scheduled offence under the PMLA, the ED registered an Enforcement Case Information Report (ECIR) under Sections 44(1)(b) and 45 of the PMLA. The case involved offences punishable under Section 4 of the PMLA, read with Sections 70 and 8(5). The proceedings were pending at the stage of framing charges.
Sessions Court Acquitted Ponmudi In April 2026
Ponmudi argued before the High Court that the Sessions Court had acquitted him of all charges on 2 April 2026.
The Sessions Court had found no nexus between the grant of the quarry lease and the alleged illegal gain or conspiracy. It had also observed that there was no procedural irregularity or statutory violation in the grant of the quarry licence.
Further, the prosecution had failed to prove entrustment, dominion over property and dishonest misappropriation.
On this basis, Ponmudi submitted that under the settled position of law, once an accused was discharged, or the predicate offence was quashed or ended in acquittal, the prosecution under the PMLA could no longer continue and was liable to be quashed. He further argued that any incidental action by the ED would also become infructuous.
In light of the acquittal in the predicate offence, Ponmudi sought the quashing of the PMLA case registered on its basis. He had also sought an interim stay on further proceedings in the money laundering case.
Accepting the plea in view of the acquittal, the High Court quashed the PMLA proceedings while leaving the ED at liberty to take action in accordance with the law if there was any subsequent development in the predicate case.
Another Disproportionate Assets Case Against Ponmudi Pending
It may be noted that the Madras High Court had, in 2023, suo motu registered another disproportionate assets case against Ponmudi. That case remains pending consideration before the court.
The separate case concerns alleged offences committed by Ponmudi while he served as the Minister for Transport and Highways during the DMK regime between 1996 and 2001.
The PMLA case quashed on Tuesday, by contrast, concerned allegations relating to his tenure as the Minister for Mines and Minerals between 2007 and 2011.
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