Sand mining scam in Tamil Nadu: ED’s 2024 communication to DGP challenged before Madras High Court

Who challenged the ED’s 2024 communication, and what action did the petitioner ask the Madras High Court to stop?

A. Rajkumar, partner of R.S. Constructions in Nanganallur, challenged a communication the Enforcement Directorate sent to Tamil Nadu’s then Director General of Police on June 13, 2024. The communication concerned an alleged ₹4,730-crore sand-mining scam. Rajkumar argued that it should not trigger fresh criminal action against him.

He asked the Madras High Court to quash the ED communication. He also sought an order preventing the Directorate of Vigilance and Anti-Corruption from registering a First Information Report or taking coercive action based on it. His challenge focused on the communication itself and its possible consequences.

The court did not immediately accept those requests. It issued notices to the State government, DVAC and ED, while allowing the inquiry to continue. Rajkumar therefore remains exposed to the next steps in the DVAC process unless the court later grants relief after hearing all sides.

What did the Madras High Court order, and why did it refuse to grant an interim stay?

The Madras High Court ordered notices to the Tamil Nadu government, the Directorate of Vigilance and Anti-Corruption, and the Enforcement Directorate. This means those authorities must respond to Rajkumar’s challenge. The court did not decide the petition finally at this stage.

It refused an interim stay on proceedings arising from the ED’s 2024 communication. The DVAC had already begun a detailed inquiry, and the State said the ED shared its information under Section 66(2) of the Prevention of Money Laundering Act. Justice G. Arul Murugan also questioned how a petitioner could seek to quash a communication sent to meet a statutory obligation.

As a result, the DVAC may continue its inquiry for now. The court also declined to prevent coercive action against Rajkumar. The final outcome will depend on the authorities’ replies and the court’s later examination of the communication’s legality.

What is the Directorate of Vigilance and Anti-Corruption’s role, and what does a ‘detailed inquiry’ allow it to do?

The Directorate of Vigilance and Anti-Corruption is Tamil Nadu’s agency for examining complaints involving alleged corruption. In this case, it is reviewing information supplied by the Enforcement Directorate about suspected irregularities in sand mining. Its involvement matters because the ED’s communication could lead to separate State-level action.

The State Public Prosecutor said the DVAC manual recognizes two inquiry stages: a preliminary inquiry and a detailed inquiry. The article does not spell out every power attached to a detailed inquiry. It does show that the DVAC is now conducting a fuller examination of the ED’s dossier and considering whether further legal steps are justified.

The High Court allowed that inquiry to continue. It did not stop the DVAC from taking coercive action against the petitioner, though the article does not identify what specific action will follow. A detailed inquiry therefore signals active fact-finding, not a final finding of guilt or proof of the alleged scam.

How large is the alleged sand-mining scam, and what does ₹4,730 crore represent in this case?

The alleged sand-mining scam is described as involving ₹4,730 crore. That is the headline financial scale of the suspected irregularities referred to in the ED’s communication. It indicates why multiple agencies and courts are examining the matter.

The amount does not automatically mean that ₹4,730 crore was stolen, laundered, or finally lost to the public. In this article, it represents the value attached to the alleged scam under investigation. The report does not provide a breakdown showing how the figure was calculated or how much was allegedly linked to any individual.

The allegation remains contested. Rajkumar is challenging the ED communication, while the DVAC has only begun a detailed inquiry. Earlier, the High Court quashed ED proceedings and set aside several provisional property attachments, and the Supreme Court refused to entertain the ED’s appeal. Those developments make the ₹4,730-crore figure an allegation under examination, not an established judgment.

What could happen to the petitioner because the court did not stop the DVAC inquiry or coercive action?

Because the court refused an interim stay, the DVAC can continue examining the ED’s information while Rajkumar’s petition remains pending. The court also declined to prohibit coercive action against him. This keeps open the possibility of further steps connected with the inquiry.

Rajkumar had specifically asked the court to prevent the DVAC from registering an FIR or taking coercive action. The State said the agency had moved from a possible preliminary assessment to a detailed inquiry under its manual. The article does not identify the exact coercive measures under consideration, so their nature cannot be stated with certainty.

For now, this is procedural exposure, not a finding that Rajkumar committed an offence. The DVAC may develop the material, decide whether further action is justified, and respond to the court’s notice. Rajkumar can still pursue his challenge, but he has no interim protection while the case proceeds.

Why did the ED send its information to the Tamil Nadu police under Section 66(2) of the Prevention of Money Laundering Act?

Section 66(2) of the Prevention of Money Laundering Act requires the Enforcement Directorate to share relevant information with other law-enforcement agencies in appropriate circumstances. The purpose is to ensure that information found during money-laundering work does not remain confined to the central agency when another authority may need to examine a related offence.

In this case, the ED sent information about the alleged sand-mining scam to the then Director General of Police and Head of Police Force on June 13, 2024. The State said this was compliance with the ED’s statutory duty. The police channel then enabled the DVAC to begin a detailed inquiry using the ED’s dossier.

That transfer did not itself establish guilt or automatically require an FIR, according to the article. It triggered scrutiny by a State agency. The High Court questioned how the petitioner could seek to quash a communication made to satisfy a legal obligation, but it has not finally ruled on the petition.

What is the Prevention of Money Laundering Act, and why must investigators connect alleged money laundering to a separate ‘predicate offence’?

The Prevention of Money Laundering Act, 2002 is India’s central law against disguising, possessing, using or projecting criminal proceeds as legitimate property. It gives the Enforcement Directorate powers to investigate suspected laundering and provisionally attach property believed to be connected with it. The law therefore focuses on both the money and its criminal source.

A predicate offence is the separate underlying crime that allegedly generated those proceeds. Investigators must connect the suspected money to that offence before a laundering case can stand. In this dispute, Rajkumar’s senior counsel argued that earlier ED proceedings relied on unconnected police FIRs and lacked a substantial predicate offence.

The article says the High Court quashed those ED proceedings and set aside several provisional attachments. The Supreme Court refused to entertain the ED’s appeal. The current petition concerns whether the ED’s 2024 information can support DVAC action, not a final determination that the alleged sand-mining offence or laundering occurred.

Key Facts:

📌 A. Rajkumar is a partner of R.S. Constructions.

📌 He challenged the ED’s June 13, 2024 communication.

📌 He sought to stop an FIR and coercive action.

📌 The court issued notices to three authorities.

📌 It refused an interim stay on DVAC proceedings.

📌 The DVAC inquiry may continue for now.

📌 DVAC handles corruption-related complaints in Tamil Nadu.