Madras High Court
S.Govindaraj vs The Assistant Director on 3 July, 2026
Crl.R.C.No.1314 of 2026
IN THE HIGH COURT OF JUDICATURE AT MADRAS
DATED : 03.07.2026
CORAM :
THE HONOURABLE MR.SUSHRUT ARVIND DHARMADHIKARI,
CHIEF JUSTICE
AND
THE HONOURABLE MR.JUSTICE G.ARUL MURUGAN
Crl.R.C.No.1314 of 2026
AND
Crl.M.P.No.11136 of 2026
S.Govindaraj
Door No.257, 1st Floor
Navanithammal Street
Aminjikarai, Chennai – 600 029.
Petitioner(s)
Vs
The Assistant Director,
Directorate of Enforcement,
(The Prevention of Money
Laundering Act, 2002)
Chennai Zonal Office-I,
5th and 6th Floor, BSNL Building,
No.2, Kush Kumar Road,
Nungambakkam,
Chennai - 600 034.
Respondent(s)
PRAYER: Criminal Revision filed under Section 438 read with Section
442 BNSS, praying to set aside the order of the learned XII Additional
Special Judge for CBI Cases, Chennai, dated 17.12.2025 passed in
Crl.M.P.No.276 of 2025 in Spl.CC.No.10 of 2024, rejecting the
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discharge petition.
For Petitioner(s): Mr. G.Vijayanand
For Respondent(s):Mr. Cibi Vishnu
Special Public Prosecutor
(ED Cases)
ORDER
(Order of the court was made by the Hon’ble Chief Justice)
The criminal revision is filed by the petitioner/sixth accused,
challenging the order dated 17.12.2025 in Crl.M.P.No.276 of 2025 in
Spl.C.C.No.10 of 2024 on the file of the XII Additional Special Judge
for CBI Cases, Chennai, rejecting the petition filed under Section 250
of BNSS, 2023, for discharge.
2. The respondent/Enforcement Directorate filed a complaint
under Section 44(1)(b) and 45 of the Prevention of Money Laundering
Act, 2002 (hereinafter referred to as “the PML Act”), as against six
accused, including the petitioner, who was arrayed as sixth accused for
the offence under Sections 3 and 4 of the PML Act.
3. The complaint was taken cognizance by the Special Court in
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Spl.C.C.No.10 of 2024. On receipt of summons and receiving the
copies, the petitioner filed a petition seeking discharge. The Special
Court, considering the claim, by order dated 17.12.2025, rejected the
petition, holding that there are prima facie materials for framing
charges for the offence under the PML Act, which is put to challenge in
the above criminal revision.
4. Learned counsel for the petitioner/sixth accused, contended
that there is no specific role implicating the petitioner either in the
predicate case or in the money laundering complaint and that he has
been unnecessarily roped in the complaint and as such is to be
discharged. He further submitted that though the partnership firm may
have availed a loan from the bank and committed default, the same
can only result in civil suit or proceedings under the SARFAESI Act for
recovery, but the same cannot constitute an offence of money
laundering under the PML Act. Further, though the petitioner is a
partner, he had no mala fide intention to avail the loan by fabricating
documents.
5. He further contended that since no prima facie material is
available either in the complaint or in the documents filed to connect
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Crl.R.C.No.1314 of 2026
the petitioner with the alleged offences, the essential ingredients of
the offence are not met. Therefore, the petitioner need not undergo
the irony of a full-fledged trial and the Special Court failed to see that
there is no prima facie material available to proceed against the
petitioner by framing charge.
6. Contending contra, Mr.Cibi Vishnu, learned Special Public
Prosecutor for the respondent/Enforcement Directorate, submitted that
the petitioner being a partner of the third accused, M/s.VIP Exports,
colluded with other two partners, who hvae acquainted with the
Branch Manager/second accused and Assistant General Manager/first
accused, hatched a conspiracy, created and submitted fabricated sale
deeds and has availed loan in the name of the partnership concern and
the loan amount so obtained and utilized by the petitioner constitutes
the proceeds of crime and, therefore, ample materials are available
against the petitioner to prove the charges under Section 3 of the
PML Act.
7. The learned Special Public Prosecutor further submitted that
the material evidence in respect of the creation and submission of
forged documents to the bank, availing of a loan of around Rs.5 crores
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Crl.R.C.No.1314 of 2026
and the diversion of those funds under the guise of procuring
materials, coupled with the statements recorded under Section 50 of
the PML Act, prima facie establishes the active involvement of the
petitioner in the offence of money laundering. Further, he argued that
the Special Court rightly by taking note of the materials available,
dismissed the petition seeking discharge in line with the decisions of
the Supreme Court.
8. Heard the rival submissions and considered the materials
available on record.
9. Predicate case in crime No.CBI/ACB/Chennai/2017/RCMA1-
2017-A-0036 came to be registered by the CBI for the offences under
Sections 120-B, 420, 467, 468, and 471 IPC and Section 13(2) read
with 13(1)(d) of the Prevention of Corruption Act, 1988 against one
M/s.VIP Exports, which is managed by three partners, including the
petitioner and two others from the UCO Bank, Chennai Main Branch,
for procuring a loan of Rs.4.93 crores by manipulation, creating
fabricated and forged documents. Based on the predicate case, the
respondent/Enforcement Directorate registered ECIR/CEZO-1/03/2023
and after completion of the investigation, the complaint was filed
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before the Special Court against the accused for the offences under
Sections 3 and 4 of PML Act.
10. The third accused, M/s. VIP Exports, is a partnership firm
registered under the Indian Partnership Act, 1932. The sixth accused/
the petitioner herein, is also one of the partners of the 3 rd accused
partnership firm. The partner of the petitioner having acquainted with
the first accused, who was working as Assistant General Manager in
UCO Bank, Chennai Main Branch, and the second accused as the
Branch Manager of UCO Bank, influenced them to process and sanction
a loan to the tune of Rs.5 crores in favor of the partnership firm.
11. As per the plan and conspiracy, the partners of the
firm/accused 4 to 6, had offered to give three items of properties as
mortgage for securing the loan. The loan application was processed by
the Branch Manager/second accused, which was approved by the
Assistant General Manager/first accused, without any verification of
the property and securities. Further, the fifth accused/partner has
executed a power of attorney in respect of one item of the property
mortgaged to the bank to one SK Holdings, who, knowing well that the
bank is having the property as collateral security, obtained non-
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traceable certificates from the police authorities and got the property
registered in its name.
12. In view of the fabricated documents available with the bank,
the loan was not repaid and the account was classified as
Non-Performing Asset. The documents fabricated and created by the
petitioner along with the other partner and submitted to the bank for
availing the loan to a tune of around Rs.5 crores are filed. Further, the
documents created by the other partner in favour of SK Holdings, who
got the property registered in its name, even when the property was
given as collateral security to the bank with the help of the
non-traceable certificate obtained are available. The details regarding
the money to a tune of Rs.3.93 crores that have been received by the
petitioner and other partners in the firm account, which has been
taken out in the name of procurement of materials and including a
sum of around USD 7,024 that has been sent out of the country under
the guise of purchase of machineries, are all available in the complaint
and the relevant materials have been annexed.
13. The petitioner, having colluded with the other partners and
bank officials in fabricating documents, to illegally procure loan
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Crl.R.C.No.1314 of 2026
amounts, for which the predicate offence has been registered by the
CBI and the loan amounts so obtained were laundered in the name of
purchase of machineries, which itself is the proceeds of crime, coming
within the purview of Section 2(1)(u) of the PML Act. When there are
ample materials available, the contention of the petitioners that there
is no iota of material implicating the petitioner in the case for the
offence under the PML Act, is totally misconceived and baseless. The
petitioner, as a partner, has signed the loan application and availed the
loan amount generating proceeds of crime.
14. At the stage of considering discharge/framing of the charges,
the Court is not expected to conduct a roving enquiry weighing
evidence like trial, but it is the duty of the Court only to see as to
whether from the materials available prima facie case against the
accused is made out. The trial court must be satisfied that with the
documents and materials available on record, a strong suspicion arises
making out a case against the accused for conviction. In this regard it
is useful to refer to the decision of the Hon’ble Supreme Court in the
case of Tarun Jit Tejpal v. State of Goa and another [2020 (17)
SCC 556].
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15. In view of the above deliberations, when there are prima
facie materials available against the petitioner/sixth accused, the
Special Court rightly dismissed the petition seeking discharge. We find
no infirmity or perversity in the findings arrived at by the Special
Court.
Accordingly, this criminal revision stands dismissed. Connected
Crl.M.P. is closed.
(SUSHRUT ARVIND DHARMADHIKARI, CJ) (G.ARUL MURUGAN, J)
03.07.2026
Index : Yes/No
Neutral Citation : Yes/No
sasi
To
1. The Assistant Director,
Directorate of Enforcement,
(The Prevention of Money
Laundering Act, 2002)
Chennai Zonal Office-I,
5th and 6th Floor, BSNL Building,
No.2, Kush Kumar Road,
Nungambakkam,
Chennai - 600 034.
2.The XII Additional Special Judge for CBI Cases,
Chennai.
3.The Public Prosecutor,
Madras High Court, Chennai 600 104.
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Crl.R.C.No.1314 of 2026
THE HON’BLE CHIEF JUSTICE
AND
G.ARUL MURUGAN,J.
(sasi)
Crl.R.C.No.1314 of 2026
03.07.2026
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