Chennai, Tamil Nadu – The Madras High Court has quashed a money laundering case filed by the Enforcement Directorate (ED) against Chennai-based interior design firm Ocean Lifespaces India Private Limited. The decision follows the court’s earlier quashing of a related extortion complaint filed by a former director, highlighting the complexities of a high-stakes boardroom dispute.
Madras High Court Quashes ED Case in Chennai Extortion Dispute
Case Quashed Due to Settled Dispute
The division bench of Justices M.S. Ramesh and Sunder Mohan ruled that the ED could not pursue its case after the predicate offense, the base for the money laundering investigation, was dismissed. This dismissal came on February 14th, 2024, when the court quashed a First Information Report (FIR) filed by the Chennai Central Crime Branch (CCB) police.
Boardroom Dispute Turns Criminal Complaint
The initial FIR stemmed from a 2023 extortion complaint filed by Balasubramaniam Sriram, a former director of Ocean Lifespaces, against the company’s current directors. However, on February 7th, 2024, Sriram submitted an affidavit stating that he had amicably settled the dispute with the current directors.
Court Recognizes Amicable Settlement
In light of the settled dispute, the court found no reason to continue the investigations. The court quashed the FIR and directed each party to pay a fine of ₹5,000 towards the Tamil Nadu Advocates Clerk Association.
Complexities of the Dispute
The case highlights the intertwining of criminal complaints and corporate disputes. Sriram’s removal from the board led him to the National Company Law Tribunal (NCLT) while also filing a criminal complaint with the CCB alleging fraud. The current directors countered by seeking to quash the FIR.
Unresolved Concerns
The court acknowledged the settlement, but Sriram reportedly said he was concerned that the agreement was made under police pressure. The court’s order transferring the probe from the CCB to the CB-CID reflects these concerns, ensuring a more neutral investigation.
Moving Forward
The quashing of the ED case and the CCB investigation mark a significant development for Ocean Lifespaces. However, the unresolved allegations of coercion by Sriram cast a shadow over the settlement, potentially leading to further legal action.
