Special court refuses ED prosecution complaint against Rathi Steel
Change
A special court refused to take cognisance of the ED's PMLA prosecution complaint against Rathi Steel and ordered detachment of properties attached by the ED.
Why it matters
The court declined to take cognisance of the Enforcement Directorate's prosecution complaint under the Prevention of Money Laundering Act. The court ordered detachment of all properties attached by the ED. The court found the allocation letter did not confer a direct financial benefit because no mining lease was executed and no coal was extracted. The court held the ED cannot treat subsequent commercial transactions, including a ₹3.08 crore share receipt, as proceeds of crime absent a demonstrable nexus with the scheduled offence; the accused had earlier been convicted by a CBI judge in 2016.
Implications
- • Attachment orders on Rathi Steel assets must be lifted and detached from ED control.
- • ED investigators must demonstrate a nexus between the scheduled offence and specific transactions before treating those transactions as proceeds of crime.
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