NEW DELHI: In a rare instance, ED is set to move SC in a case related to Santiago Martin — the Chennai-based ‘lottery king’ who earlier this year turned out to be the single biggest contributor to political parties with Rs 1,368 crore in electoral bonds — asking the top court to recall its 2023 verdict where the agency was asked to close its PMLA probe against Martin and his company.
The SC order had followed Tamil Nadu police’s decision to close the corruption case against Martin that formed the basis for ED to proceed against him under PMLA.
With Madras HC ruling on Monday that withdrawal of the corruption case, “predicate offence” in ED parlance, was illegal and validating ED’s case under PMLA, the anti-money laundering agency has decided to seek the go-ahead to restart the probe into the politically sensitive case.
The SC, while restraining ED from continuing its case against Martin and his company, had said the agency could challenge Tamil Nadu police’s decision to close the corruption case against him.
For ED, the significance of the Madras HC order goes beyond an opportunity to proceed against Martin, fabled in political circles for his vast contacts. The HC ruled that the SC’s verdict in Vijay Madanlal Chaudhary case, where it held that a PMLA case would cease to exist if the ‘predicate offence’ matter was closed or quashed or resulted in the acquittal of the accused, was applicable to the said case.
Justices S M Subramaniam and V Sivagnanam of the HC said the apex court in the same very verdict had held that PMLA of 2002 gave ED enough leeway to move independently of the jurisdictional police in a money laundering case.
“In case the scheduled offence is not already registered by jurisdictional police or complaint filed before the magistrate, it is open to authorised officer to still proceed under Section 5 of the 2002 Act whilst contemporaneously sending information to jurisdictional police under Section 66(2) of the Act for registering FIR in respect of cognizable offence or report regarding non-cognizable offence and if the jurisdictional police fails to respond appropriately to such information, the authorised officer under the 2002 Act can take recourse to appropriate remedy, as may be permissible in law to ensure that the culprits don’t go unpushed and the proceeds of crime are secured,” the judges said.
“As such, if the investigating agency dealing with a predicate offence is not taking appropriate action as per law and on account of the same, an accused is allowed to go scot free with the proceeds of crime, ED, for the purpose of achieving the objects under PMLA and to deal with the proceeds of crime under PMLA, is entitled to take recourse to the remedies available under law,” the HC added.
The HC’s ruling holds considerable significance in view of ED’s persistent complaint about lack of cooperation from police in different states and the argument that a PMLA case does not stand if the ‘predicate offence’ collapses.
The HC verdict comes close on the heels of the order of a special PMLA court in Mumbai which said ED’s proceedings against senior Maharashtra politician Chhagan Bhujbal would stand despite the predicate offence against him being dropped by the state police.
In the case against Martin, Tamil Nadu crime branch had registered an FIR against him in 2012, which became the basis for ED to initiate its money laundering probe in 2016. During its investigation, the agency had attached assets worth Rs 120 crore of the accused in an alleged case of illegal sale of lottery.
However, a year after DMK took charge of the govt, Tamil Nadu police in Nov 2022 filed a closure report, dropping the FIR/predicate offence.
DMK is one of the biggest beneficiaries of the electoral bonds purchased by Martin, according to disclosures which were made by the Election Commission of India.