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BECHU KURIAN THOMAS
South Indian Bank Ltd. – Appellant
Versus
Directorate of Enforcement – Respondent
ORDER
Petitioner, though a de facto complainant, has approached this Court under section 482 of the Code of Criminal Procedure (for short ‘Cr.P.C’ ) seeking to quash the proceedings initiated by the Enforcement Directorate (for short ‘ED’) under the Prevention of Money Laundering Act, 2002.
2. Petitioner is a scheduled bank, which had initiated FIR.No.38/2019 of Crime Branch, Thrissur, alleging offences including Sections 420 and 471 of the Indian Penal Code 1868 against respondents 2 to 4 and others. The aforesaid offences are scheduled offences under the Prevention of Money Laundering Act, 2002 (for short PML Act). While the crime was being investigated by the Crime Branch, pursuant to the FIR, the Enforcement Directorate stepped in and commenced their investigation after registering ECIR No.KCZO/05/2019. In the meantime, the Crime Branch completed the investigation and filed a final report referring the case as a civil matter. The said report was accepted by the Chief Judicial Magistrate, Thrissur as RC.No.73/2023 on 05.01.2024. Thus the predicate offence has ended in a closure of the investigation as no crime was committed by the accused.
3. The properties which are the subject
(1) Scheduled offences – When predicate offence is not in existence, ED cannot continue its investigation on proceeds of crime emanating out of predicate offence.(2) Power conferred on High Court und....
The court established that the closure of a predicate offence negates the basis for any subsequent money laundering investigation under the PML Act.
Section 66(1) of the PMLA prescribes the obligations of Enforcement Directorate (ED) to provide or facilitate the provision of pertinent information to designated government entities when such inform....
Money laundering proceedings under the Prevention of Money Laundering Act cannot be sustained without a validly registered predicate offense; if the predicate offense is quashed, so are the related m....
The court established that the offense of money laundering under PMLA cannot exist independently of a scheduled offense.
FIR and ECIR become two different documents and both tend to take shape on its own, independent of each other.
A quashed FIR does not automatically invalidate an ECIR; the ECIR is independent and requires substantive grounds for quashing based on the merits of the predicate offence under PMLA.
Without a predicate offense, proceedings under the Prevention of Money Laundering Act cannot be sustained, as established by the Supreme Court.
The Prevention of Money Laundering Act proceedings cannot survive if the predicate offences linked to them are closed by the court, indicating the non-existence of 'proceeds of crime'.
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