The Tamil Nadu government has decided to challenge the acquittal of former DMK minister K. Ponmudy, his son Gowtham Sigamani and five others in the Rs 28.37-crore red sand quarrying case, the Enforcement Directorate informed the Madras High Court on Friday, setting up a fresh legal contest over one of the state's long-running corruption-linked prosecutions.
Appearing before the first Division Bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G. Arul Murugan, ED Special Public Prosecutor P. Sidharthan said the State government had written to the central agency conveying its decision 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 filed by the acquitted accused, who are seeking to quash the proceedings initiated by the ED under the Prevention of Money Laundering Act, 2002.
The petitions before the court arise from a case that has moved through multiple stages over more than a decade. According to Ponmudy's plea, the Villupuram District Crime Branch police registered a first information report on September 23, 2012, naming him, his son and others. The case was booked under various provisions of the Indian Penal Code and the law governing mines and minerals. The allegations centred on decisions taken when Ponmudy served as Minister for Mines and Minerals between 2007 and 2011.
The prosecution case was that he had entered into a criminal conspiracy and awarded quarry licences for red sand to his son, his son's friend, Sigamani's brother-in-law and others. The charge sheet alleged that the licence holders quarried red sand beyond the permitted quantity and failed to pay seignorage fees to the state government, causing a loss of Rs 28.37 crore to the public exchequer and a corresponding wrongful gain to themselves.
However, after a full-fledged 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 quarry leases and the alleged illegal gain or conspiracy. It also found that the prosecution had not proved either the charge of conspiracy or abuse of official position against the former minister. The court further observed that the alleged revenue loss figures were speculative and unsupported by primary data, according to Ponmudy's submissions before the High Court.
That acquittal has now become central to the defence's argument before the Madras High Court. Ponmudy has contended that once all seven accused have been cleared in the predicate offence, nothing survives for the ED to continue prosecuting them for money laundering in connection with the same case. On that basis, he has urged the court to quash the PMLA proceedings pending before a sessions court in Chennai.
The ED, however, has signalled that the matter is not over. By informing the High Court that the state government intends to appeal the acquittal, the agency has indicated that the underlying criminal case remains contested and that the legal foundation for the money-laundering proceedings is still being examined. The development also underscores the layered nature of PMLA litigation, where the fate of the enforcement case often turns on the status of the scheduled offence.
For Ponmudy, a senior DMK leader and one of the party's prominent ministers in previous governments, the case carries both legal and political significance. The red sand quarrying allegations have followed him for years, and the latest move by the state government ensures that the acquittal will not bring immediate closure. Instead, the matter is likely to remain before the courts, with the appeal against the trial court verdict and the challenge to the ED proceedings now proceeding in parallel.
The High Court's direction for a detailed counter affidavit within two weeks suggests that the judges intend to examine the legal basis of the ED's case closely, particularly in light of the acquittal and the state's decision to contest it. The next hearing is expected to determine how the money-laundering proceedings should move forward while the appeal against the acquittal is pursued.