ED's Bid to Transfer Near-Concluded Disproportionate Assets Trial Fails at Madras HC; Section 44(1)(c) PMLA Requires Prior Cognizance by Special Court

The Madras High Court dismissed the Enforcement Directorate's petition to transfer a nearly-finished disproportionate assets trial to the Madurai PMLA court, holding the application was premature because the Special Court had not yet taken cognizance of the money-laundering complaint.

The Madras High Court, in a Division Bench judgment delivered on 4 August 2026, dismissed a criminal original petition filed by the Directorate of Enforcement challenging the refusal of the Principal Sessions Judge, Thoothukudi, to commit a disproportionate assets case to the designated PMLA Special Court at Madurai. Chief Justice Sushrut Arvind Dharmadhikari, leading the bench, and Justice G. Arul Murugan held that Section 44(1)(c) of the Prevention of Money Laundering Act, 2002 (PMLA) is unambiguous: the mechanism of committal is triggered only when both the court seized of the scheduled offence and the Special Court have each already taken cognizance. Since the Madurai Special Court had issued only a pre-cognizance notice under Section 223 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (BNSS) and had not taken cognizance, the ED's application was held to be premature. The court also directed the Thoothukudi court to proceed with expedition, vacating the stay it had earlier imposed on the trial.

The Disproportionate Assets Case and the ED's Parallel Prosecution

The second respondent, Anitha R. Radhakrishnan, served as a Member of the Tamil Nadu Legislative Assembly from the Tiruchendur constituency between May 2001 and May 2006 and held the portfolio of Minister for Housing and Urban Development during part of that period. In 2006, the Directorate of Vigilance and Anti-Corruption (DVAC), Thoothukudi, registered an FIR alleging that assets worth approximately Rs. 2.68 crore had been accumulated in his name and in the names of his wife, brothers, and sons — far beyond what his known sources of income could explain. After investigation, a final report was filed in Spl.C.No.3 of 2019 before the Principal District and Sessions Judge, Thoothukudi. The amount found to be disproportionate was quantified at approximately Rs. 2.08 crore.

By the time the ED moved its transfer application, the Thoothukudi trial had made substantial progress. The prosecution had examined 79 witnesses and marked 312 exhibits, the defence had examined 6 witnesses and marked 74 exhibits, both sides had closed their evidence, the prosecution had completed its oral and written arguments, and the defence had argued in part. This Court had, by an earlier order dated 29 April 2025 in Crl.R.C.(MD) No.304 of 2014, directed that the trial be concluded within six months, by 15 December 2025.

Separately, the ED, treating the alleged disproportionate assets as proceeds of crime, registered an Enforcement Case Information Report and filed a prosecution complaint for the offence of money-laundering under Section 3, punishable under Section 4, of the PMLA. The complaint was e-filed on 28 March 2025 and the hard copy was filed on 3 April 2025 before the Principal Sessions Judge, Madurai, the designated Special Court under Section 43(1) of the PMLA, where it was numbered A.No.122 of 2025.

The Madurai Special Court, by a memorandum dated 4 September 2025, called upon the ED to produce the sanction required under Section 197(1) of the Code of Criminal Procedure for prosecuting the second respondent as a former public servant under the Prevention of Corruption Act, 1988. That sanction had still not been furnished. The Madurai court thereafter issued a pre-cognizance notice dated 24 December 2025 under Section 223 of the BNSS calling the accused to appear on 29 January 2026. As the bench recorded, the Special Court at Madurai had, as on the date of hearing, not taken cognizance of the money-laundering complaint at all.

The Transfer Application and Its Rejection at Thoothukudi

Against this backdrop, the ED moved the Principal Sessions Court, Thoothukudi, by an application under Section 44(1)(c) of the PMLA, seeking to have the disproportionate assets case committed to the Special Court at Madurai so that both cases could be dealt with together. The application had a troubled procedural journey: it was returned on 7 October 2025 with two queries — how such an application could be entertained given this Court's time-bound disposal direction, and how a court not designated as a Special Court under the PMLA could entertain an application founded on that Act. After being returned again on 15 October 2025 and 30 October 2025, it was finally heard after re-presentation on 10 December 2025.

By order dated 11 December 2025, the Principal Sessions Judge, Thoothukudi, rejected the application on several grounds: the Thoothukudi court is a Special Court only for trying cases against Members of Parliament and Legislative Assemblies under the PC Act and has no designation under the PMLA; the ED as an authority under Section 49 of the PMLA can approach only an PMLA Special Court; on a plain reading of Section 44(1)(c), the Thoothukudi case was not taken cognizance of on a PMLA complaint; and the ED had already moved an application under Sections 301(2) and 302(2) of the Code before the same court in April 2023, which was dismissed on merits in July 2024 without any appeal.

The Legal Dispute Before the High Court

Before the Division Bench, the ED's Special Public Prosecutor argued that the PMLA, read as a whole, intends that one and the same Special Court should try both the scheduled offence and the connected money-laundering offence. He relied on Section 43(2), which says a Special Court “shall also try” any connected offence, and on Section 44(1)(a), which makes such connected offence triable by the Special Court for the relevant area. He also placed reliance on the Standing Committee on Finance's Fifty-Sixth Report explaining the purpose of the 2012 amendment inserting Section 44(1)(c). The ED further relied on the Supreme Court's decisions in Vijay Madanlal Choudhary v. Union of India [(2023) 12 SCC 1] and Rana Ayyub v. Directorate of Enforcement [(2023) 4 SCC 357], and on a coordinate bench decision of this Court in Deputy Director v. Deputy Superintendent of Police [2026 SCC OnLine Mad 2125]. On the question of whether prior cognizance by the Special Court was a precondition, the ED argued that paragraphs 27, 29, and 30 of Rana Ayyub show that Section 44(1)(c) imposes no such requirement.

Counsel for the accused respondents countered squarely on the text of the provision. Section 44(1)(c) applies, on its own wording, only where the Special Court has “taken cognizance of the complaint of the offence of money-laundering.” The Madurai court had not crossed that threshold. They relied on the Supreme Court's decision in Kushal Kumar Agarwal v. Enforcement Directorate [2025 SCC OnLine SC 1221], which holds that for complaints filed after 1 July 2024, cognizance cannot be taken until the accused is given an opportunity of hearing under Section 223 of the BNSS — a step not yet completed at Madurai. They also pressed the point that the missing sanction under Section 197(1) of the Code was a jurisdictional precondition without which the Madurai court could not take cognizance against the second respondent as a former Minister.

The respondents additionally argued that the disproportionate assets case was in the Thoothukudi Sessions Division while the PMLA complaint was in the Madurai Sessions Division. Moving a case between two different Sessions Divisions is a power vested exclusively in the High Court under what are now Sections 448 and 449 of the BNSS, and Section 44(1)(c) of the PMLA cannot be read as silently overriding that scheme. They also invoked the near-complete state of the Thoothukudi trial to argue that committal at this stage would violate the second respondent's right to a speedy trial under Article 21 of the Constitution — a right this very Court had sought to protect by its time-bound disposal order. Reliance was placed on the Orissa High Court's decision in Pankajini Sahu v. Joint Director, Enforcement Directorate [(2023) 154 taxmann.com 60] for the proposition that committal under Section 44 of the PMLA is a discretionary exercise, not a mechanical one.

How the Bench Reasoned

The bench formulated the central question as whether the Principal Sessions Judge, Thoothukudi, was right in refusing to commit the pending disproportionate assets case to the Special Court at Madurai on an application under Section 44(1)(c) of the PMLA.

On the text of the provision, the court was unequivocal. Section 44(1)(c) speaks of two courts each of which has already taken cognizance — one of the scheduled offence, and the other, being the Special Court, of the money-laundering complaint. The clause does not say “if the Special Court is likely to take cognizance” or “once the Special Court is seized of the complaint.” It explicitly requires that the Special Court must have “taken cognizance.”

Turning to the ED's reliance on Rana Ayyub, the bench found that the very passages relied upon treat the taking of cognizance by the Special Court as a fact already accomplished, not as a mere formality to be dispensed with. Similarly, Vijay Madanlal Choudhary addresses how trials are to proceed once both cases are properly instituted and does not say that an application can be entertained in anticipation of cognizance.

The court then addressed the sanction problem. The second respondent was a Minister and sitting legislator during the relevant period. The Madurai Special Court had raised the sanction query as far back as September 2025. Nearly a year had elapsed and the ED had still not produced it. Since the absence of sanction under Section 197(1) of the Code meant the Special Court was not likely to take cognizance against the second respondent, the court held that any default lay on the part of the petitioner itself.

On the state of the trial, the bench was emphatic. Section 44(1)(c) was conceived to save time and to avoid two courts reaching different conclusions on the same facts. It was never meant to reopen a trial that had, for all practical purposes, already been fought and finished. With 79 prosecution witnesses and 312 exhibits, the defence's 6 witnesses and 74 exhibits, and arguments all but concluded, committing the case to a court that had not even taken cognizance of the connected complaint would simply delay proceedings that were on the verge of conclusion.

The bench distinguished the coordinate bench decision in Deputy Director v. Deputy Superintendent of Police on three grounds: in that case the Special Court had already taken cognizance; both courts sat within the same city and sessions jurisdiction; and the scheduled-offence trial was still actively in progress. None of those features was present here. Rana Ayyub was distinguished on the ground that the forum question there arose at an early stage of proceedings. Ranjit Singh Kothari was acknowledged as correctly stating the general legislative intention of single-court trial, but held inapplicable where cognizance had not been taken and sanction had not been obtained.

The bench accepted the discretionary standard from Pankajini Sahu — that committal under Section 44 is not to be ordered as a matter of course — and found it pointed firmly against transfer at this stage.

The court also referred to the Constitution Bench's observations in Abdul Rehman Antulay v. R.S. Nayak [(1992) 1 SCC 225] that disproportionate assets cases against public servants tend by their nature to take long, and said that was all the more reason not to add fresh, avoidable delay once such a case had almost reached its destination.

On the stay, the bench applied the principles restated in High Court Bar Association, Allahabad v. State of U.P. [(2024) 6 SCC 267] and found that the stay it had granted on 15 April 2026 had only served to prolong matters: the Thoothukudi trial stood still while the parallel proceeding at Madurai moved no closer to cognizance.

The bench also noted that the ED had in April 2023 sought substantially the same relief through an application under Sections 301(2) and 302(2) of the Code before the Thoothukudi court. That application was dismissed on merits in July 2024 and no appeal was carried. While the court declined to treat that dismissal as a formal bar, it was treated as a relevant circumstance bearing on the propriety of a second attempt through a different provision, raised only after the trial had progressed still further towards conclusion.

Outcome

Crl.O.P.(MD) No.3792 of 2026 was dismissed with no order as to costs. The court held that the order dated 11 December 2025 passed by the Principal Sessions Judge, Thoothukudi, rejecting the application under Section 44(1)(c) of the PMLA warrants no interference. The application was premature, as the Special Court at Madurai has not taken cognizance of the money-laundering complaint and cannot presently do so in the absence of the sanction required under Section 197(1) of the Code. Committing the trial at this stage would cause real prejudice to the accused and serve no legitimate object of the statute.

As a consequence, Crl.M.P.(MD) No.11904 of 2026, filed by the accused for vacating the interim stay of proceedings in Spl.C.No.3 of 2019, was allowed. The stay granted on 15 April 2026 was lifted. Crl.M.P.(MD) No.4074 of 2026 filed by the ED was dismissed.

The Principal Sessions Judge, Thoothukudi, was directed to take up Spl.C.No.3 of 2019 at the earliest available date and proceed with all due expedition, bearing in mind this Court's earlier time-bound schedule. The bench made clear that nothing in the judgment amounts to an expression of opinion on the merits of either the disproportionate assets case at Thoothukudi or the money-laundering complaint before the Special Court at Madurai, both of which are to be decided independently on their own merits.