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2025 Supreme(SC) 1616
SUPREME COURT OF INDIA
Abhay S. Oka and Ujjal Bhuyan, JJ.
R. Madhavan Plai – Appellant
Versus
Rajendran unnithan. S and others – Respondent
Civil Appeal No(s). 3530-3531 of 2025 (Arising Out of SLP (Civil) No(s).2987-2988 of 2025)
Decided on : 03-03-2025
Headnote:(A) Prevention of Money Laundering Act, 2002 - Section 3 - Directions for registration of Enforcement Case Information Report (ECIR) - High Court's directive to register an ECIR based on prima facie conclusion of predicate offence found unjustified - Impugned order set aside - The enforcement agency is to decide on initiating proceedings under the Act thereafter. (Paras 4-5)
(B) Criminal Procedure - The High Court erred in ordering the registration of an ECIR against individuals without adequate justification. (Para 5)
Facts of the case:
The case revolves around the challenge by the appellant against the High Court's judgment which directed the Enforcement Directorate to register an ECIR regarding misappropriation and related offences, following a conclusion of breach of trust and cheating
Findings of Court:
The court found no sufficient reason for the High Court's drastic order and quashed the directive to register the ECIR.
Issues: The main issue was whether the High Court was justified in directing the registration of an ECIR based solely on a prima facie finding.
Ratio Decidendi: The court concluded that the High Court overstepped its bounds by mandating the registration of an ECIR without adequate evidence, emphasizing the enforcement agency's discretion in initiating proceedings under the relevant law.
Result: Appeals allowed.
| Table of Content |
|---|
| 1. improper registration of ecir by high court (Para 4) |
| 2. quashing of ecir and discretion to enforcement directorate (Para 5) |
ORDER :
1. As per the office report, all the respondents have been served. The second to fourth respondents are represented by a learned counsel.
2. Leave granted.
3. The explanation of the appellant in the affidavit filed pursuant to the order dated 27th January, 2025 is hereby accepted.
4. While dealing with the writ appeals, by the impugned judgment, the Division Bench of the High Court directed the Enforcement Director to register an Enforcement Case Information Report (for short, "the ECIR"). Paragraphs 6 and 7 of the impugned judgment read thus:
"6. On perusal of the order passed as extracted above, it is evident that the FIR has been only registered firstly against only the Secretary. It is wholly intriguing as to how and in what manner the other surcharge persons has been let off with no criminal case. We would like to have the information from tho Home Secretary and Additional Chief Secretary, Cooperative Societies by way of an affidavit, explaining the circumstances and the reasons of not registering the FIR against the other persons, as it is settled law that both criminal and civil proceedings for recovery can go side by side which will also state the stage of investigation or submissions of final report in the aforementioned FIRs.
7. Prima facie, it is a case of breach of trust and cheating which which is a predicate offence as per the provisions of Section 3 of the Prevention of Money Laundering Act, 2002. Since we had issued a notice to Mr.Jayasankar, Standing Counsel for the Enforcement Directorate, we thus direct the Enforcement Director to register an ECIR as provided under the Act against all the persons involved, for misappropriation, breach of trust, cheating as Well as offences under the PC Act forthwith."
5. According to us, the High Court had no reason to pass a drastic order of directing the Enforcement Directorate to register an ECIR only because the High Court prima facie came to a conclusion that a predicate offence exists. Therefore, we set aside that part of the impugned judgment by which a direction is issued to the Enforcement Directorate to register an ECIR. Therefore, the ECIR registered on the basis of the impugned judgment is hereby quashed and set aside. We leave it to the Enforcement Directorate to take a call on the question of initiating proceedings under the Prevention of Money-laundering Act, 2002.
6. The Appeals are allowed on the above terms.
