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Amar Mandal's Acquittal in Not Against PMLA:
Dismisses Petition Seeking Quashing of ECIR; Holds Acquittal Must Be Final to End PMLA Proceedings
In a significant ruling on the interplay between predicate offences and proceedings, the dismissed a petition by Amar Mandal seeking to quash an registered under the Prevention of Act (PMLA), 2002. Justice Sujit Narayan Prasad held that the petitioner's acquittal in the had not attained finality and could not be used as a "" against the ongoing PMLA investigation.
Background: From Coal Theft to Probe
The case originated from an incident on , when the intercepted a truck loaded with coal without valid documents near Poraiyahat, Godda. The driver implicated Amar Mandal and others in illegal coal trading. Based on this, Poraiyahat Police Station Case No. 07/2019 was registered under Sections 414 (assisting in concealment of stolen property) and 120B (criminal conspiracy) of the , read with .
The (ED) registered ECIR/RNZO/08/2023 on , treating the IPC offences as scheduled offences under Part A of the PMLA Schedule. During a search at Mandal's premises on , the ED seized ₹85 lakh in cash, 134 original property deeds, and loose sheets. The ED filed an application under before the , seeking retention of the seized assets.
Meanwhile, Mandal contested the criminal trial and was acquitted by the , on , on the ground that the prosecution failed to prove the charges beyond reasonable doubt. Relying on this acquittal, Mandal approached the High Court seeking quashing of the ECIR and a declaration that no further PMLA proceedings could continue against him.
Arguments: Conflicting Interpretations of Vijay Madanlal
, representing Mandal, argued that the 's decision in Vijay Madanlal Choudhary v. Union of India (2022) clearly states that if a person is finally absolved of the by way of acquittal, discharge, or quashing, there can be no action for . He contended that the acquittal in the extinguished the very foundation of the ECIR, and continuing the PMLA proceedings would be an .
, appearing for the ED, countered that the acquittal had not attained finality as it remained appealable. He emphasized that the ECIR is an internal, administrative document and not a statutory instrument amenable to quashing. The ED also highlighted that the seizure of ₹85 lakh cash and 134 property deeds went far beyond the single truck interception that formed the , and these assets were under independent adjudication before the Adjudicating Authority.
Court's Analysis: The Concept of ''
Justice Prasad delved into the statutory scheme of the PMLA, noting that the offence of under Section 3 is intrinsically linked to "" derived from a . However, the court clarified that the mere existence of an acquittal does not automatically terminate PMLA proceedings unless the acquittal is "final."
The court observed:
"The
of '
' crystallizes upon the exhaustive invocation of all available appellate remedies or, alternatively, upon the expiry of the statutory limitation period for filing an appeal without any challenge being preferred."
Applying this to the present case, the court noted that the acquittal order dated , was subject to appeal under the , and had not yet become final.
ECIR Not Amenable to Quashing
The court extensively relied on
Vijay Madanlal Choudhary
to hold that an ECIR cannot be equated with an FIR under the
.
"ECIR is an internal document created by the department before initiating penal action or prosecution against the person involved with process or activity connected with
,"
the court quoted. Since the ECIR is not a statutory document, its quashing would not have any operative legal consequence.
: A Distinct Power
A significant aspect of the judgment was the court's recognition of , which empowers the ED to share information with other agencies if it believes any other law has been contravened. The court noted that this power operates independently of the existence of a . The ED had already shared evidence regarding unexplained assets with the and the State Police under this provision.
The court held that even if a ends in acquittal, the ED's power under Section 66(2) to disseminate information to other enforcement agencies remains intact, as it operates in a separate sphere from Chapter II (penal provisions) of the Act.
Distinction Between and Seized Assets
The court drew a crucial distinction: the trial court's acquittal was confined to the single truck interception and the police investigation. It had no occasion to adjudicate upon the massive cash recovery, the 134 property deeds, or the alleged forensic trail of ₹8.94 crore in bank accounts.
"In the total absence of any adjudication by the trial court regarding the seized wealth, the Petitioner cannot rely upon a
as a
to demand release of the
,"
the court observed.
Adjudication Before Statutory Authority
The court also noted that the , was already seized of Original Application No. 381/2025 concerning the retention of seized assets, and the petitioner had submitted a detailed reply. The court held that allowing the writ petition would bypass the comprehensive statutory mechanism provided under the PMLA, including appeals to the and further to the High Court.
Decision and Implications
Dismissing the petition, Justice Prasad vacated the interim stay granted on , which had halted proceedings in the ECIR. The court directed the petitioner to pursue his remedies before the Adjudicating Authority, which would consider the acquittal as a relevant factor in the adjudication.
This judgment reinforces that an acquittal in a does not automatically shut down PMLA proceedings unless it attains finality. It also underscores the nature of ECIR and the ED's independent power to investigate and share information with other agencies, even when the is challenged.
Key Observations from the Judgment
-
"The of ' ' crystallizes upon the exhaustive invocation of all available appellate remedies or, alternatively, upon the expiry of the statutory limitation period for filing an appeal without any challenge being preferred."
-
"In the total absence of any adjudication by the trial court regarding the seized wealth, the Petitioner cannot rely upon a as a to demand release of the ."
-
"An ECIR does not constitute the initiation of a criminal prosecution; rather, it is an internal document of the . The mere institution of an ECIR to invoke jurisdiction does not, by itself, amount to launching or initiating prosecution against the person concerned."
