Tamil Nadu to appeal Ponmudy acquittal in red sand quarrying case, ED tells Madras High Court

The Tamil Nadu government has decided to challenge the acquittal of former DMK Minister K. Ponmudy, his son Gowtham Sigamani and five others in a red sand quarrying case involving an alleged loss of ₹28.37 crore to the public exchequer. The Directorate of Enforcement (ED) conveyed the State's position to the Madras High Court on Saturday.

Appearing before the first Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan, ED Special Public Prosecutor P. Sidharthan submitted that the State government had written to the Central agency stating its intention to file an appeal against the acquittal.

The Bench directed the Special Public Prosecutor to file a detailed counter affidavit within two weeks in response to a batch of writ petitions moved by the acquitted individuals. The petitioners are seeking to quash proceedings initiated against them by the ED under the Prevention of Money Laundering Act, 2002, which were based on the red sand quarrying case.

In his petition, Mr. Ponmudy stated that the Villupuram District Crime Branch police had registered a First Information Report against him, his son and others on September 23, 2012, under various provisions of the Indian Penal Code and the law governing mines and minerals.

The prosecution's case was that during Mr. Ponmudy's tenure as Minister for Mines and Minerals between 2007 and 2011, he entered into a criminal conspiracy and awarded licences to his son, the latter's friend, Mr. Sigamani's brother-in-law and others for quarrying red sand. The charge sheet alleged that the licensees extracted red sand beyond the permitted quantity without paying seignorage fees to the State government, causing a loss of ₹28.37 crore to the exchequer and a corresponding wrongful gain to themselves.

After a full trial, the Villupuram Principal District and Sessions Court acquitted all seven accused on April 2, 2026. The trial court held that the prosecution had failed to establish any nexus between the grant of the quarry lease and the alleged illegal gain or conspiracy. It also observed that the prosecution had not proved the charges of conspiracy or abuse of official position against the former Minister, and concluded that the alleged revenue loss figures were speculative and unsupported by primary data, Mr. Ponmudy told the High Court.

With all seven accused acquitted of the predicate offence, nothing would survive for the ED to continue its money laundering prosecution connected to the case, Mr. Ponmudy contended, urging the High Court to quash the PMLA proceedings pending before a sessions court in Chennai.