Madras High Court Quashes ED Case Against Minister I Periyasamy After Noting Quashing Of Predicate Offence

The bench of Chief Justice SA Dharmadhikari and Justice G Arul Murugan quashed the ECIR after noting that the predicate offence, based on which the ECIR was registered by the ED, was already quashed by the court. The court noted that since the scheduled offence was quashed, there were no proceeds of crime, based on which the ED could pursue its case.

Background

The ECIR was registered against Periyasamy and others on the basis of an FIR registered by the Directorate of Vigilance and Anti-Corruption, Chennai, for offences under Section 120(B), 409 of IPC, along with Section 13(2) read with Sections 13(1)(c) and 13(1)(d) of the Prevention of Corruption Act. Since the alleged offences were scheduled offences under the Prevention of Money Laundering Act, the ED had registered a case.

The allegation against Periyasamy was that while serving as the Cabinet Minister in charge of the Department of Housing and Urban Development, he had allotted housing plots unauthorisedly to certain people, including former IPS officer Jaffar Sait and his wife, and thereby caused loss to the government and attained wrongful gain.

Arguing that the allotment was made legally, and that a similar criminal case against the co-accused was quashed, Periyasamy had preferred quash petition before the Madras High Court. The court, after noting that the charges against the co-accused were quashed and there was no element of criminal conspiracy or misconduct or financial loss to the government, allowed the quash petition filed by Periyasamy and quashed the cases against in on April 2025.

Periyasamy argued that after allowing the quash petition, all charges including the scheduled offence against him stood quashed, putting an end to the entire criminal prosecution.

Meanwhile, the co-accused in the case filed petitions challenging the ECIR initiated by the ED, and the same were allowed by the court. Periyasamy had thus approached the court to quash the ECIR that was pending against him.

It was argued that the ECIR, without the existence of the scheduled offence was non est in law and the ED was estopped from proceeding against Periyasamy, after quashing of the entire criminal proceeding against him.

It may be noted that another case is pending against Periyasamy for a similar offence. In this case, though the trial court had initially discharged him, the High Court, taking suo motu cognizance, set aside the order of discharge and restored the case against him. The order of the High Court, directing the trial court to continue with the trial, was, however, stayed by the Supreme Court.

Counsel for Petitioner: Mr K Muthu Ganesa Pandian, Mr M Muthu Kavitha, Mr A Vijay Kumar

Counsel for Respondents: Mr N Ramesh, Special Prosecutor

Case Title: I Periyasamy v The Deputy Director

Citation: 2026 LiveLaw (Mad) 187

Case No: Crl OP 10758 of 2026