BHOPAL: In a major relief for retired IAS officer and former Madhya Pradesh Chief Secretary M Gopal Reddy, the Supreme Court has dismissed a Special Leave Petition (SLP) filed by the Enforcement Directorate (ED), challenging a Telangana High Court order that had completely exonerated him from money laundering proceedings.
This order also brings relief to M S Raju, promoter of Mantena Group, since ED’s case against Reddy is linked to the same Bhopal EOW FIR based on allegations of digital manipulation in Madhya Pradesh’s e-tendering system.
“We find no reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed,” the apex court observed.
The Telangana High Court had granted full relief to Reddy and Raju in 2023, quashing ED proceedings in response to a petition filed by them in 2021. The court found no merit in continuing the probe, thereby effectively exonerating both from the alleged charges under the Prevention of Money Laundering Act (PMLA).
The ED’s investigation originated from an FIR registered by the Economic Offences Wing (EOW), Bhopal, alleging large-scale irregularities in the state’s e-tendering system. The ED claimed tenders worth over Rs 80,000 crore had been manipulated through unauthorized access and misuse of digital signatures. Max Mantena, led by M S Raju, was among the companies under scrutiny.
Following the FIR, the ED’s Hyderabad unit registered an Enforcement Case Information Report (ECIR), limiting its probe to Max Mantena and the former chief secretary. The EOW had charged several individuals and entities under IPC Sections 120-B (criminal conspiracy), 420 (cheating), and 471 (forgery), along with Sections 7 and 13(2) of the Prevention of Corruption Act.
Reddy’s counsel argued that he was only named in the EOW’s final report and was not directly accused. All those named were acquitted by a Special Sessions Court in Bhopal on November 23, 2022, for lack of evidence. No appeal was filed against the acquittal.
Reddy’s legal team asserted that the ED’s continued investigation was not only baseless but also violated legal principles, as the case had already been resolved in court. The Telangana High Court agreed, ruling that prosecution under the PMLA must be supported by clear material evidence—not assumptions or conjecture.
In a related case, the High Court also quashed ED proceedings against Max Mantena. Justice M Laxman observed that the agency’s actions amounted to an “abuse of process,” adding that suspicion alone cannot justify prosecution under the PMLA.
The case weakened further when the Computer Emergency Response Team-India (CERT-In), which assisted the EOW in digital forensics, reported that no additional evidence could be recovered from the seized data. This prompted the EOW to submit a closure report to the court.
The alleged e-tendering scam first came to light in 2019 after internal bureaucratic conflicts. The inquiry was initiated by EOW on directions from Chief Minister Shivraj Singh Chouhan following an interim report by the then director of the MP State Electronics Development Corporation (MPSEDC), which led to the cancellation of nine tenders.
This order also brings relief to M S Raju, promoter of Mantena Group, since ED’s case against Reddy is linked to the same Bhopal EOW FIR based on allegations of digital manipulation in Madhya Pradesh’s e-tendering system.
“We find no reason to interfere with the impugned order passed by the High Court. The Special Leave Petition is, accordingly, dismissed,” the apex court observed.
The Telangana High Court had granted full relief to Reddy and Raju in 2023, quashing ED proceedings in response to a petition filed by them in 2021. The court found no merit in continuing the probe, thereby effectively exonerating both from the alleged charges under the Prevention of Money Laundering Act (PMLA).
The ED’s investigation originated from an FIR registered by the Economic Offences Wing (EOW), Bhopal, alleging large-scale irregularities in the state’s e-tendering system. The ED claimed tenders worth over Rs 80,000 crore had been manipulated through unauthorized access and misuse of digital signatures. Max Mantena, led by M S Raju, was among the companies under scrutiny.
Following the FIR, the ED’s Hyderabad unit registered an Enforcement Case Information Report (ECIR), limiting its probe to Max Mantena and the former chief secretary. The EOW had charged several individuals and entities under IPC Sections 120-B (criminal conspiracy), 420 (cheating), and 471 (forgery), along with Sections 7 and 13(2) of the Prevention of Corruption Act.
Reddy’s counsel argued that he was only named in the EOW’s final report and was not directly accused. All those named were acquitted by a Special Sessions Court in Bhopal on November 23, 2022, for lack of evidence. No appeal was filed against the acquittal.
Reddy’s legal team asserted that the ED’s continued investigation was not only baseless but also violated legal principles, as the case had already been resolved in court. The Telangana High Court agreed, ruling that prosecution under the PMLA must be supported by clear material evidence—not assumptions or conjecture.
In a related case, the High Court also quashed ED proceedings against Max Mantena. Justice M Laxman observed that the agency’s actions amounted to an “abuse of process,” adding that suspicion alone cannot justify prosecution under the PMLA.
The case weakened further when the Computer Emergency Response Team-India (CERT-In), which assisted the EOW in digital forensics, reported that no additional evidence could be recovered from the seized data. This prompted the EOW to submit a closure report to the court.
The alleged e-tendering scam first came to light in 2019 after internal bureaucratic conflicts. The inquiry was initiated by EOW on directions from Chief Minister Shivraj Singh Chouhan following an interim report by the then director of the MP State Electronics Development Corporation (MPSEDC), which led to the cancellation of nine tenders.
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