In a major development involving JSW Steel Limited, the Supreme Court on Tuesday refused to interfere with ongoing money laundering proceedings initiated by the Enforcement Directorate (ED). The bench of Justice Dipankar Datta and Justice Augustine George Masih observed that since JSW had already approached the appellate tribunal under the Prevention of Money Laundering Act (PMLA), the statutory process must be allowed to conclude first.
Background
The case dates back to a 2009 contract between JSW Steel and Obulapuram Mining Company (OMC) for the supply of 1.5 million metric tonnes of iron ore. When OMC failed to deliver, JSW sought arbitration and later secured a favourable award directing refund of the advance.
But trouble began when the Central Bureau of Investigation (CBI) launched a probe into illegal mining by OMC’s associate firms, including Ananthpur Mining Corporation, linked to politician G. Janardhan Reddy. While JSW was initially named, the CBI later dropped all charges, finding no evidence against the steel major.
However, the Enforcement Directorate registered a money laundering case (ECIR/09/BZ/2012) in 2012, alleging that around ₹33.80 crore owed by JSW to OMC represented “proceeds of crime.” Based on this claim, the ED attached JSW’s bank accounts in 2015 and 2016 under provisional attachment orders.
Court’s Observations
Appearing for JSW, senior counsel argued that since the CBI had dropped the company from its charge sheet, the “predicate offence” the foundation of a PMLA case did not exist. “In the absence of a live scheduled offence, there can be no proceeds of crime,” counsel contended, citing the Vijay Madanlal Choudhary ruling.
The ED, on the other hand, accused JSW of deliberately frustrating the attachments by withdrawing over ₹21 crore after the first order. “Such actions, done in collusion with bank officials, clearly show concealment and possession of proceeds of crime,” the agency argued.
The bench took a cautious approach. Justice Masih remarked that the PMLA provides “a self-contained adjudicatory mechanism” where disputes over attachments should first be resolved before the Appellate Tribunal. “Interference at this stage,” the bench said, “would prejudge issues that rightly belong to the Tribunal’s domain.”
It also noted that JSW was not named in the Enforcement Directorate’s original ECIR or the CBI’s final report. The case, the Court said, is limited to determining whether the attached ₹33.80 crore truly qualifies as proceeds of crime.
Decision
The Supreme Court ultimately declined to quash the prosecution or halt proceedings before the Special Court. The justices emphasised that JSW must continue its appeal before the PMLA Appellate Tribunal, which will decide whether the attached property constitutes proceeds of crime.
“The apprehension of arbitrary prosecution is misplaced,” the Court observed, adding that the tribunal should decide “uninfluenced by any observations” made in the order.
With that, the bench disposed of JSW’s appeals, leaving the attachments and investigation intact for now.
Case: JSW Steel Ltd & Anr. vs Deputy Director, Directorate of Enforcement & Ors.
Case Type: Criminal Appeal Nos. 4183–4184 of 2025 (Arising out of SLP (Crl.) Nos. 7828–7829 of 2022)
Decision Date: October 7, 2025
