ED proceedings quashed against Mantena Group

Hyderabad The Telangana High Court has quashed the Enforcement Directorate (ED) proceedings against Max Mantena, an irrigation project construction company, in a money laundering case. MS Raju, Promoter of Mantena Group has been proven innocent in this case. He was made the prime accused in this Hawala case by ED.

Justice M Laxman considered the action against Mantena a misuse of the law, taking into account the evidence and circumstances. The court stated that if these proceedings continue, it would amount to perpetuating injustice against the petitioner, Mantena. Therefore, the proceedings in the case on the ED’s file in Hyderabad have been quashed.

The High Court Justice explicitly wrote that the ED had registered this case based on an FIR related to the e-tender of the Economic Investigation Department (EOW) in Bhopal. However, the EOW's own case could not be proven. It is noteworthy that all the accused in the e-tender case have been acquitted by the trial court.

Justice Laxman wrote in the judgment that although the ED suspected rigging in the e-tender since 2016 involving an amount of Rs 80,000 crore, no evidence was found to support this claim. No tampering in the e-tender case has been substantiated to the extent that it could be believed that any criminal income was obtained.

Two prior decisions were cited in this matter – Vijay Mandal Chowdhary and J Sekar's cases. He emphasised that only property (money) acquired directly or indirectly through a crime can be considered criminal proceeds. To establish the proceeds of a crime, it must first be proven that a crime occurred. -Adequate grounds must exist to bring any money or property under the purview of the Hawala Act (PML Act). Mere suspicion cannot be the basis for belief. The High Court emphasised that in this case, the underlying crime itself was not proven.

The ED alleged unauthorised access to the e-tender issued on the Madhya Pradesh e-procurement portal and manipulation of price bids for Irrigation department tender worth Rs 1,030 crore. The ED claimed misuse of the digital signature of the officer issuing the tender and alleged rigging of tenders worth Rs 80,000 crore since 2016.

However, the ED later failed to substantiate these suspicions. Still, the ED registered the current case under the Hawala Act based on these suspicions and materials. The accused involved in the e-tender case have already been acquitted. The EOW filed two charge sheets, and the trial court acquitted all the accused, a decision that was unchallenged.

Consequently, the acquittal order has been finalized. ED also could not present any evidence supporting its claims of alleged scams after 2016, nor did it request a comprehensive investigation. This prompted petitioner Max Mantena to seek the quashing of ED's case before the Telangana High Court. The High Court now clarified that any petitions related to this matter should cease.