The Enforcement Directorate submitted that the allocation letter for the "fraudulently secured" coal block fell within the ambit of "proceeds of crime". (File photo)While declining cognisance of a prosecution complaint, which is akin to a chargesheet, filed by the Enforcement Directorate (ED) in a Chhattisgarh coal scam case, a Delhi court on Friday said the central agency could not “usurp the jurisdiction not conferred to it by the law”.“The present case is a clear and classical example of assumption of jurisdiction of Directorate of Enforcement when all the material available on record clearly points against it,” said Special Judge Dheeraj Mor of the Rouse Avenue Court in his order dated March 6.The court was hearing the prosecution complaint filed by the ED against Rathi Steel & Power Ltd (RSPL) and three of its officials regarding the alleged misrepresentation used to secure the allocation of the Kesala North coal block in Chhattisgarh in 2008.The court declined to take cognisance of the prosecution complaint, noting that the existence of “proceeds of crime” in itself could not be established.“Since the foundational ingredient of the offence of money laundering under Section 3 of PMLA, namely the existence of ‘proceeds of crime’ has not been established in this case, no ground exists for proceeding further or to take cognisance of the alleged offence,” Judge Mor said.The ED’s money laundering case followed a corruption case filed by the Central Bureau of Investigation (CBI), in which all the accused were convicted in July 2016. The CBI case is that the accused had highly inflated land-related claims to “dishonestly induce” the 36th Screening Committee to recommend the allocation of the coal block to RSPL.‘Allocation letter can’t be construed as proceeds of crime’Story continues below this adED, on the other hand, submitted that the August 5, 2008, allocation letter for the “fraudulently secured” coal block fell within the ambit of “proceeds of crime” in the case. It also said the company and its officials generated proceeds of crime by raising their share capital under the guise of the letter.“… allocation is merely a preliminary step, conferring at best a valuable right i.e. a preferential entitlement to be considered for grant of a mining lease subject to compliance with statutory requirements and the discretion of the competent authorities. It does not even, to the slightest extent, create any present right, title or interest in the coal block itself,” said Judge Mor, noting that an allocation letter wouldn’t fall within the ambit of “proceeds of crime”.“… coal block allocation letter, unless it leads to or results in financial gains, direct or indirect but relatable, cannot be construed as ‘proceeds of crime’ within the meaning of Section 2(1)(u) of the PMLA,” he added.‘Unfounded assumptions, illusions and conjectures’According to ED, 14 lakh shares were issued in favour of non-promoters and through this, RSPL allegedly gained Rs. 3.08 crore “by projecting the coal mine development as a major determinative factor”.The court junked this claim as well. It stated that ED couldn’t link the shares and the coal block allocation.“…the coal block allocation to A-1 RSPL on 05.08.2008 had no positive impact on the value of its shares, which continued to decline after the said allocation. Thus, it is apparent that the value of the shares of A-1 RSPL was governed by the market forces unrelated to and independent of coal block allocation letter,” the judge said.Story continues below this ad“In view of the above discussion, there is not even an iota of evidence on record to suggest that the said 14 lakh preferential equity shares were subscribed by the non-promoters on being influenced by the allocation of coal block allegedly secured by A-1 RSPL by misrepresentation,” he added, stating that the entire ED case was based on “unfounded assumptions, illusions and conjectures”.Nirbhay Thakur is a Senior Correspondent with The Indian Express who primarily covers district courts in Delhi and has reported on the trials of many high-profile cases since 2023. Professional Background Education: Nirbhay is an economics graduate from Delhi University. Beats: His reporting spans the trial courts, and he occasionally interviews ambassadors and has a keen interest in doing data stories. Specializations: He has a specific interest in data stories related to courts. Core Strength: Nirbhay is known for tracking long-running legal sagas and providing meticulous updates on high-profile criminal trials. Recent notable articles In 2025, he has written long form articles and two investigations. Along with breaking many court stories, he has also done various exclusive stories. 1) A long form on Surender Koli, accused in the Nithari serial killings of 2006. He was acquitted after spending 2 decades in jail. was a branded man. Deemed the “cannibal" who allegedly lured children to his employer’s house in Noida, murdered them, and “ate their flesh” – his actions cited were cited as evidence of human depravity at its worst. However, the SC acquitted him finding various lapses in the investigation. The Indian Express spoke to his lawyers and traced the 2 decades journey. 2) For decades, the Jawaharlal Nehru University (JNU) has been at the forefront of the Government’s national rankings, placed at No. 2 over the past two years alone. It has also been the crucible of campus activism, its protests often spilling into national debates, its student leaders going on to become the faces and voices of political parties of all hues and thoughts. The Indian Express looked at all court cases spanning over two decades and did an investigation. 3) Investigation on the 700 Delhi riots cases. The Indian Express found that in 17 of 93 acquittals (which amounted to 85% of the decided cases) in Delhi riots cases, courts red-flag ‘fabricated’ evidence and pulled up the police. Signature Style Nirbhay’s writing is characterized by its procedural depth. He excels at summarizing 400-page chargesheets and complex court orders into digestible news for the general public. X (Twitter): @Nirbhaya99 ... 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