Point of Law: Section 3 reads as offence of money-laundering.

ORDER :

1. The petitioners are before this Court calling in question registration of an Enforcement Case Information Report (‘ECIR’) initiated by the Bangalore Zonal office of the Directorate of Enforcement.

2. Sans unnecessary details, facts in brief, are as follows:-

The petitioners are accused in Crime No.23 of 2018. The 1st petitioner is alleged to have been closely associated with the complainant who is not a party to these proceedings from the year 2014 and had several transactions with the complainant. Based upon certain allegations, a complaint comes to be registered against the petitioners before the Ashoknagar Police Station, Hubballi in Crime No.23 of 2018. Several proceedings have gone on in the said crime and the Police after investigation have filed a charge sheet in the matter. The matter is pending consideration before the concerned Court of jurisdiction. The present case does not concern merit of Crime No.23 of 2018 or its aftermath qua the offences under the Indian Penal Code.

3. The Enforcement Directorate (‘ED’ for short) initiates certain proceedings in the year 2022. The basis for such initiation is involvement of petitioners in Crime No.23 of 2018. What drives the petitioners to this court is not the merit of registration of the said crime. The petition is preferred on the ground that proceedings initiated by the ED at Bangalore Zonal Office suffer from want of territorial jurisdiction. It is contending this, the present petition is preferred.

4. Heard Sri Rajiv Yadav, learned counsel appearing for the petitioners and Sri Madhukar Deshpande, learned counsel appearing for the respondent.

5. The learned counsel appearing for the petitioners would admit that the solitary contention in the case at hand is that the proceeding suffers from want of territorial jurisdiction and if the ED, Zonal Office, Bangalore had no jurisdiction to even register the ECIR, issuance of summons or any further proceedings would become contrary to law. It is his submission that none of the transactions as necessary under Section 3 of the Prevention of Money Laundering Act, 2002 (‘the Act’ for short) has happened within the territorial limits of Karnataka. Every transaction had happened in Mumbai and therefore, it is only the office of the Enforcement Directorate at Mumbai that would get jurisdiction to enquire into the offences under the Act. He would submit that the very provision of the statute makes it unequivocally clear that the ED, Zonal Office, Bangalore cannot proceed against the petitioners. He would seek to place reliance on the judgment of the Apex Court in the case of VIJAY MADANLAL CHOUDHARY AND OTHERS v. UNION OF INDIA AND OTHERS, 2022 SCC OnLine SC 929, to buttress his submission that the offence under the Act is a standalone and independent offence and, therefore, it has to be initiated only where the ingredients of Section 3 have happened and not elsewhere and would seek quashment of the entire proceedings.

6. On the other hand, the learned counsel for the ED would refute the submissions to contend that the ECIR cannot be registered until a FIR is registered under the scheduled offence/ predicate offence. Without that there cannot be a proceeding under the Act. Admittedly, the crime is registered and charge sheet is filed in the jurisdictional Court at Hubballi. Therefore, the Zonal Office, Bangalore alone is competent to enquire into the allegations under the Act as the two are inter-linked and would seek dismissal of the petition.

7. I have given my anxious consideration to the submissions made by the respective learned counsel and perused the material on record.

8. The petitioners and the complainant/Sanjay Ghodawat were acquaintances. Certain transactions have happened between the two with regard to real estate. Based upon several allegations on the said transactions, multiple complaints come to be registered against the petitioners between June and October, 2018 in Crime Nos. 23 to 25, 27 to 30 and 45