Chennai: A special court in Chennai has dropped money-laundering proceedings initiated by the Directorate of Enforcement (ED) against four firms linked to Coastal Energy after the Delhi high court quashed the underlying CBI case alleging supply of sub-standard coal to NTPC.The prosecution complaint named Coastal Energy Pvt Ltd, Coastal Energen Pvt Ltd and overseas-linked entities based in Dubai, Mauritius and the British Virgin Islands among the accused.According to the court order, the case stemmed from a complaint by the Directorate of Revenue Intelligence alleging that businessman Ahmed A R Buhari supplied sub-standard coal to National Thermal Power Corporation Ltd.Based on the complaint, the CBI registered a case on Jan 22, 2018 for offences including criminal conspiracy, cheating and provisions under the Prevention of Corruption Act. The ED registered its enforcement case information report on Jan 31, 2018 after treating the CBI case as a scheduled offence under the PMLA.The Delhi high court quashed the CBI FIR in Sept 2025 after finding that investigators had failed to establish that Coastal Energy supplied sub-standard coal or derived unlawful gains from the transactions under scrutiny. The court also noted that related proceedings and connected FIRs involving similar allegations had already been closed for lack of evidence, and held that continuation of the criminal case would amount to further harassment.Subsequently, the Madras high court quashed the PMLA proceedings against accused Ahmed A R Buhari, Precious Energy Holdings Ltd and Mutiara Energy Holdings Ltd through separate orders passed between Oct 2025 and March 2026.While examining whether proceedings could continue against the remaining accused, J Omprakash, judge for additional special court for CBI cases, relied on the Supreme Court’s Vijay Madanlal Choudhary ruling, which held that money-laundering proceedings cannot survive once the scheduled offence is quashed.The court on April 28 dropped proceedings against accused but granted liberty to the ED to revive the prosecution if the predicate offence is restored later.
