The Enforcement Directorate (ED) has approached the Madras High Court seeking directions to the Tamil Nadu government and the Director General of Police (DGP) to register a First Information Report (FIR) in connection with what it described as “systemic and rampant illegal sand mining” across the state. The central agency claimed that despite sharing detailed information about large-scale mining activities and associated financial irregularities, the state police failed to initiate any criminal proceedings.

The matter came up before a division bench comprising Chief Justice Manindra Mohan Srivastava and Justice G Arul Murugan, which issued notice to the Tamil Nadu government while also posing significant questions regarding the limits of the ED’s jurisdiction and authority under law. The bench questioned whether an investigative agency such as the ED could seek judicial directions compelling another agency, in this case the state police, to register an FIR.

“You are an investigating agency. Courts have said that unless a predicate offence is registered, you cannot have powers,” the bench remarked. “Now, can you file an application saying they should be directed to register FIRs?” the court asked, signaling its concern about potential overlap and overreach in the functioning of multiple investigative bodies.

ED’s Contention

In its petition, the ED stated that between June and July of last year, it had furnished extensive details of alleged illegal sand mining operations to the Tamil Nadu police under Section 66(2) of the Prevention of Money Laundering Act (PMLA). The agency contended that despite providing “credible evidence of massive illegal mining,” no action was taken by the state police to initiate criminal proceedings.

The ED’s petition argued that the state’s failure to act had resulted in severe ecological harm and substantial economic losses. Citing Article 48A of the Constitution, which obligates the State to protect and improve the environment, the agency asserted that inaction amounted to a violation of constitutional duties. It further estimated that the illegal mining activities had caused a loss of approximately ₹4,730 crore to the state exchequer.

Appearing for the ED, Special Public Prosecutor N Ramesh maintained that the agency had gathered substantial material demonstrating widespread and organized violations. He argued that the state government’s inaction undermined both the environmental and financial integrity of Tamil Nadu.

“We have sought a direction to the state authorities to act upon our communication. It is a matter of public interest,” Ramesh submitted before the bench. He also referred to a Supreme Court judgment which held that when the ED uncovers information relating to an offence, it may transmit that information to the competent authority, which is then “obliged to act and register a case.”

Court’s Query on Jurisdiction and Scope

The High Court clarified that it was not questioning the quality or sufficiency of the materials the ED claimed to have collected. Instead, the bench focused on the question of jurisdiction and the legal framework governing the ED’s powers. “Our only question is whether you can come here and ask this relief to another agency,” the court observed. “We’re not saying that the materials are not there. But unless a case is registered, can you investigate?”

The bench’s remarks pointed to an ongoing tension between state and central investigative bodies under the PMLA framework—particularly concerning the ED’s powers when no predicate offence has been formally registered by another authority such as the police or the Central Bureau of Investigation (CBI).

Tamil Nadu Government’s Response

Opposing the petition, Advocate General (AG) PS Raman, appearing on behalf of the Tamil Nadu government, argued that the ED lacked the legal authority to compel the state police to register FIRs. “Registering an FIR is not the prerogative of the ED,” Raman said. “Just because they give us information, we can’t act like a post office.”

Raman pointed out that the state’s hands were tied until recently due to ongoing litigation related to the same issue. “We could not take action earlier because the ED’s challenge to the high court’s previous ruling in a related matter was pending before the Supreme Court until last month,” he explained.

The Advocate General also recalled that last year, the Madras High Court had quashed the ED’s provisional attachment orders in another sand mining case, holding that the agency could not act under the PMLA in the absence of a predicate offence. In that judgment, the court had reiterated that “the ED is not a super-cop” and emphasized that the agency’s powers could be invoked only when there exists a primary or predicate offence registered by another law enforcement body.

Raman further accused the ED of “selective enforcement,” arguing that the agency was unfairly targeting Tamil Nadu while ignoring similar or larger instances of illegal mining and financial irregularities in other states. “Four times more scams are happening in Uttar Pradesh, Gujarat, and Bihar,” he said. “Have they taken any case against them? They seem to have eyes only on Tamil Nadu.”

Broader Legal and Institutional Questions

The bench, while hearing both sides, observed that the case highlights an important structural gap in the current legal framework governing money laundering and related offences. “Two agencies should not have any doubt or quarrel with each other,” the court said. “The Act does not clearly specify what happens when a State fails to act on information shared by the ED.”

This observation underlined a recurring challenge in the implementation of the PMLA—how to reconcile the federal division of responsibilities between central and state authorities, especially when one agency’s investigative powers depend on another’s actions. Without a registered predicate offence under laws such as the Indian Penal Code or the Mines and Minerals (Development and Regulation) Act, the ED cannot independently investigate the “proceeds of crime” under the PMLA.

In essence, the ED’s plea before the Madras High Court seeks to bridge that procedural gap by obtaining judicial directions compelling the state police to register a case, thereby allowing it to move forward with a money laundering investigation. However, such a move also raises constitutional and jurisdictional questions about the separation of powers between investigative bodies and the autonomy of state law enforcement agencies.

The Way Forward

After hearing the submissions, the Madras High Court issued notice to the Tamil Nadu government and directed it to file a detailed reply within three weeks. The bench did not issue any interim orders but indicated that the matter would require a careful examination of the statutory provisions of the PMLA and relevant precedents set by higher courts.

Legal observers note that the outcome of this case could have wider implications for the relationship between central and state investigative agencies. If the court accepts the ED’s argument, it could effectively expand the agency’s ability to initiate action in cases where state authorities are perceived to be inactive. Conversely, if the court upholds the state government’s position, it may reinforce the principle that the ED’s jurisdiction is strictly derivative and dependent upon the existence of a predicate offence.

For now, the Madras High Court’s observations have once again brought to light the ongoing debate over the ED’s powers and accountability, particularly in politically sensitive cases. As the case progresses, it is expected to test the balance between federal authority, state autonomy, and the rule of law in India’s complex legal landscape surrounding economic and environmental crimes.