The Calcutta High Court has quashed money laundering proceedings initiated by the Enforcement Directorate (ED) against Louis Dreyfus Company India Private Limited in connection with an alleged ₹234.57 crore bank fraud case linked to Prakash Vanijya Private Limited (PVPL).
Justice Suvra Ghosh held that the material collected by the ED did not make out a prima facie case against the company and observed that continuing the proceedings would amount to an abuse of the court’s process.
Background of the Case
The matter originated from an FIR registered by the Central Bureau of Investigation (CBI) in March 2014 against PVPL director Manoj Kumar Jain and others following a complaint by the Central Bank of India regarding alleged losses of ₹234.57 crore. The CBI later filed charge sheets for offences including cheating, forgery and criminal conspiracy.
Based on the predicate offences, the ED registered an Enforcement Case Information Report (ECIR) under the Prevention of Money Laundering Act (PMLA) and later filed a prosecution complaint against Louis Dreyfus India and others.
The ED alleged that the company had participated in “circular trading” through transactions involving three letters of credit (LCs) worth ₹25 crore. According to the agency, the transactions were routed through Quality Vintrade Private Limited (QVPL), allegedly controlled by co-accused Manoj Kumar Jain.
Senior counsel appearing for Louis Dreyfus India argued that the company was never named as an accused in the predicate CBI case and that one of its representatives was instead cited as a prosecution witness. The company maintained that the transactions were ordinary trade dealings conducted through warehouse receipts, which are legally recognised under commercial law.
It was also argued that the CBI investigation had already concluded that no diversion of funds involving the company could be established.
Justice Ghosh noted that while a person can be prosecuted under the PMLA even without being named in the scheduled offence, there must still be material showing involvement in handling “proceeds of crime.”
The Court found that the ED had mainly relied on the statement of co-accused Manoj Kumar Jain recorded under Section 50 of the PMLA. Referring to Supreme Court precedents, the Court observed that the prosecution “cannot start with a statement of co-accused to establish its case.”
The bench also pointed out that QVPL, which allegedly received funds in the disputed transactions, was not made an accused either in the predicate offence or in the money laundering case. The Court said this weakened the allegation of illegal circular trading.
Importantly, the Court recorded that the CBI had already examined the disputed transactions and concluded that Louis Dreyfus India was not a beneficiary of the alleged fraud.
“The material available insofar as the petitioner is concerned does not make out a case for the petitioner to stand trial,” the Court observed.
Allowing the revisional application, the High Court quashed M.L. Case No. 7 of 2018 against Louis Dreyfus Company India Private Limited. However, the Court clarified that proceedings against the remaining accused persons would continue.
The Court also directed that the petitioner be released from its bail bonds immediately.
Case Details
Case Title: Louis Dreyfus Company India Private Limited v. Enforcement Directorate, Government of India
Case Number: CRR 1145 of 2024
Judge: Justice Suvra Ghosh
Decision Date: 22 May 2026
