Madras HC quashes CBI case against TN minister’s brother in ‘bank fraud’

The Madras High Court has quashed a Central Bureau of Investigation (CBI) case against N Ravichandran, brother of Tamil Nadu Municipal Administration Minister KN Nehru, in connection with an alleged bank fraud.

The court found insufficient grounds to sustain the charges, leading to the dismissal of the case, subject to the condition that Ravichandran pay a fine of Rs 15 lakh to the Indian Overseas Bank’s settlement centre.

This development could potentially hinder further actions by the Enforcement Directorate (ED), which often relies on predicate offences established by agencies like the CBI to pursue money-laundering investigations under the Prevention of Money Laundering Act (PMLA).

Also read: ED raids multiple locations linked to TN minister KN Nehru

The case against Ravichandran

The CBI had accused Ravichandran, the promoter of True Value Homes (TVH), of involvement in a financial scam related to a Rs 30-crore loan disbursed by the Indian Overseas Bank in 2013 for a wind energy project by Truedom EPC India Pvt Ltd.

The agency alleged that the funds were fraudulently diverted to entities linked to the TVH group, with no project initiated at the designated site. The CBI had filed a chargesheet in 2021, prompting further scrutiny by the ED, which initiated a money-laundering probe based on the CBI’s case.

Court’s ruling

On Monday (July 6), the Madras High Court ruled that no fraud had occurred and that no government officials were involved in the alleged scam. The decision to quash the case could have far-reaching implications, particularly for the ED’s ongoing investigation under the PMLA.

Also read: KN Nehru case: DMK slams ED raids as 'political vendetta'

The court’s ruling came after Ravichandran challenged the CBI’s chargesheet, with his legal team, led by Senior Counsel NR Elango and Vikram Choudhary, arguing that the ED lacked locus standi to intervene in the case, as it was neither a complainant nor a victim.

ED’s move

Earlier, the ED had sought to intervene in Ravichandran’s plea to quash the CBI case, citing its independent probe into money-laundering allegations. The court, however, dismissed the CBI’s case, potentially impacting the ED’s ability to pursue the case further.

The ruling has sparked reactions from the ruling DMK, which in April had condemned as “politically motivated” the ED’s searches at properties linked to Ravichandran, Nehru, and Nehru’s son, Perambalur MP Arun Nehru.

Tamil Nadu Law Minister S Regupathy had described the ED as an “ally of the BJP”, alleging that the raids were orchestrated to tarnish the DMK government’s image.

Also read: ED seeks to intervene in KN Nehru's brother Ravichandran’s plea against CBI case

Key victory

This development marks a significant legal victory for Ravichandran and may reshape the trajectory of related investigations into financial irregularities involving the TVH group.

The case has drawn considerable attention due to its political undertones and the involvement of a prominent DMK leader’s family.

However, the anticipated Supreme Court appeal by the CBI and ED signals continued scrutiny in this high-profile case.