Madras HC dismisses writ petition by TN medical college owner against ED summons

Chennai: The Madras High Court on Monday dismissed a writ petition filed by the owner of a group of educational institutions, including a medical college, against summons by the Enforcement Directorate (ED) in a case related to accepting donations for medical admissions.

A division bench of Justices S.M. Subramaniam and V. Sivagananam dismissed the writ petition filed by SRM University Chancellor, T.R. Paarivendhar, alias T.R. Pachamuthu, to restrain the ED from summoning him in a case registered by the agency based on donation for medical admissions in the SRM University in 2016, holding that the investigating agency could not be restrained from performing its statutory duties just because the Chancellor and the university had made a payment of Rs 88.66 crore to 142 alleged victims of cheating.

"Mere repayment of money to the victims will not wash away the offence of money laundering, if any committed. Still, the authorities are empowered to conduct an investigation by summoning the persons concerned... As such, the prayer of the writ petitioner is not entertainable," it said.

ED's Special Public Prosecutor, N. Ramesh told the court that Rs 88.66 crore had been taken from the accounts of a public trust run by the petitioner and his family members to bail him out of the predicate offence, and therefore, there was a necessity to investigate the matter in depth.

The Chennai Central Crime Branch (CCB) had registered a case against Madhan of Vendhar Movies, owned by the petitioner, in 2016 for allegedly cheating several individuals after receiving crores of rupees for their admissions into the SRM Medical College. The petitioner was also arrested.

Paarivendhar deposited an amount of Rs 85 crore to obtain bail and safeguard the reputation of the institution and held the position that he had not received any money directly or indirectly for medical admissions. Several petitions were moved in the Supreme Court and the apex court passed an order in 2017 for payment of Rs 88.66 crore to the people who complained that they were cheated.

The case against the institution for the predicate offence was quashed.

The ED had, however, parallelly initiated proceedings under the Prevention of Money Laundering Act (PMLA) of 2002.

Despite the quashing of the case, the ED continued to issue summons to Paarvendhar in 2022 and 2023. Stating that even his elder son P. Ravi was summoned, the petitioner said he feared there was every likelihood of the investigating agency abusing its powers. Senior counsel B. Kumar told the court that the ED authorities were demanding many documents including on the number of trusts run by him and his family members, the bank accounts of those trusts, and so on. The counsel for the petitioner argued that the question of invoking the money laundering law would not arise at all after the quashing of the case booked for the predicate offence.

However, the division bench disagreed with him and said it could not issue a blanket order in the nature of an injunction restraining the ED from summoning the petitioner or his family members and directed the petitioner to cooperate with the investigation and prove his innocence instead of approaching the court.