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BOMBAY HIGH COURT
Urmila Joshi-Phalke and
Nandesh S. Deshpande, JJ.
Laxmi Narain – Applicants
versus
Directorate of Enforcement – Non-applicants
Criminal Application (APL) No.1488 of 2024
Decided on 11.11.2025
(A) Prevention of Money Laundering Act, 2002 – Sections 3 and 4 – Criminal Procedure Code, 1973 – Section 482 – ECIR – Application seeking quashing/stay of proceedings – Commission of scheduled offence is prerequisite and sine-qua-non for initiating investigation under PMLA – It was a well-planned systematic conspiracy – Documentary evidence and statements recorded by authorities, at this stage, prima facie, show involvement of applicants – Inability of applicant to submit relevant documents and his admission that he has not shown huge amounts in his Income Tax Returns is sufficient to draw inference, at this stage, regarding his involvement in illegal activities supported by various statements of witnesses – Complexity of issue involving multiple issues and facts and transactions entered appear to be not genuine one and rigorous investigation is carried out by authorities – Statements of various witnesses and documents on record sufficiently show that there is live link between scheduled offence and ECIR – Relief declined. (Paras 32, 35, 40, 41, 52, 60 and 70)
(B) Criminal Procedure Code, 1973 – Section 482[Section 528 of BNSS] – Quashing of criminal proceedings – Scope of power under Section 482 is not limited or constricted by court or nature of order under challenge – Even an administrative order can be quashed in exercise of powers under Section 482 of Code, if it is required to give effect to an order issued under the Code, or if it is necessary to secure ends of justice – While considering applications for quashing of FIRs, powers under Section 482 of Code cannot be exercised when allegations made in FIR or charge-sheet constitute ingredients of offence/offences alleged – Interference by this court under Section 482 of Code is to prevent abuse of process of any court or otherwise to secure ends of justice – Defence of accused cannot be looked into by court except in very exceptional circumstances at initial stage of criminal proceeding – Even, this court cannot conduct a mini trial by appreciating evidence while considering petition filed under Section 482 of Code – At this stage, what is to be looked into is, whether evidence collected by investigating agency is sufficient to make out a case against accused triable. (Paras 21 and 69)
Result: Criminal Application rejected.
JUDGMENT
Urmila Joshi-Phalke.—By this application, the applicants seeks following reliefs:
(i) Quash and set side the chargesheet filed in Enforcement Case Information Report ECIR bearing No. ECIR/NGSZO/01/2024 registered by Directorate of Enforcement, Sub-Zonal Office, Nagpur for the offence punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 relied upon Documents (RUD) before the Sp. Court (PMLA) Nagpur in Criminal Case No.1/2024.
(ii) grant stay to the proceedings arising out of ECIR bearing No. ECIR/NGSZO/01/2024 registered by Directorate of Enforcement, Sub- Zonal Office, Nagpur for the offence punishable under Sections 3 and 4 of the Prevention of Money Laundering Act, 2002 pending before the SPL Court PMLA Nagpur in Criminal Case No.1/2024.
(iii) Grant stay to the order dated 30.9.2024 passed by Chairperson Adjudicating Authority Delhi Enforcement Directorate in PAO No.02/2024 and Original Complaint No.2317/2024.
(iv) Quash the proceedings pending before the Chairperson Adjudicating Authority Delhi Enforcement Directorate in PAO NO.02/2024 and Original Complaint No.2317/2024.
(v) The Hon’ble Court may kindly release all the bank accounts which are seized by the ED in the present proceedings or specifically one savings bank account NO.80410082137 of standard chartered bank at Civil Lines having an amount of Rs.6 lakhs 45 thousand balance remaining.
(vi) Quash the order of court of SPL PMLA Court Nagpur taking cognizance of the case vide order dated 23.7.2024 in Criminal Case No.1/2024.
(vii) Allow the application.
(viii) Grant any other relief which this Hon’ble Court deems fit and proper in the facts and circumstances of the case in the interest of justice.
2. The ECIR was registered on the basis of predicate offences registered against the applicants vide FIR No.11200048233307 dated 20.9.2023 under Sections 195, 323, 341, 342, 506(2), 389, 120-B of the IPC and schedule offence vide FIR No.11191067240040 dated 4.3.2024 under Sections 406, 419 and 420 of the IPC and under Section 66-B of the Information Technology Act, 2000 at Valsad and Ahmedabad Police Stations respectively.
3. As per the investigating agency, the schedule offence was investigated by the competent police authorities and it revealed that the applicants are involved in money laundering of the proceeds of crime and, therefore, investigation was carried out by the Enforcement Directorate (the ED). It revealed during the investigation that the applicant No.1 - Laxmi Narain s/o Chandrup Singh Kaushik played vital role who while discharging duty as employee in the Welspun India Limited, a textile section exercised de facto control over two entities namely (1) Shachi Imports and Exports Pvt. Ltd. and (2) Textile Professional LLP and laundered the financial benefits received by him by defrauding M/s. Welspun India Limited. The documents seized and statements of witnesses including statement of applicant No.1 under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA) and statements of his associates, co-partners and business counterparts substantiated the facts.
4. From the evidence gathered, it revealed that applicant No.1 hatched the conspiracy and defrauded M/s. Welspun India Limited through various means and utilized companies viz. M/s. Shachi Imports and Exports Pvt. Ltd. and M/s. Textile Professional LLP for layering proceeds of crime. It further revealed that invoices were raised in the name of Textile Professional LLP thereby layering transactions, siphoned the amounts routing the same to M/s. Shachi Imports and Exports Pvt. Ltd. and parts of the funds were transferred abroad. Thus, prima facie material revealed shows that involvement of the applicants in offence under Sections 3 and 4 read with Section 70 of the PMLA. Hence, ECIR/NGSZO/01/2024 was registered against the applicants.
5. The present application is preferred by the applicants under Section 482 of the Code of Criminal Procedure/Secti
(1) ECIR – Application seeking quashing/stay of proceedings – Commission of scheduled offence is prerequisite and sine-qua-non for initiating investigation under PMLA.(2) Quashing of criminal proceed....
The presence of a scheduled offence legitimizes the existence of an ECIR and allows the department to continue the investigation. However, the settlement or quashing of scheduled offences in FIRs pro....
The judgment emphasizes the need for substantial probable causes to believe the accused is not guilty, the requirement to prove allegations beyond reasonable doubt, and the presumption of innocence u....
The court established that the offense of money laundering under PMLA cannot exist independently of a scheduled offense.
Without a predicate offense, proceedings under the Prevention of Money Laundering Act cannot be sustained, as established by the Supreme Court.
The court upheld the validity of the ECIR independent of the FIRs, affirming that non-bailable warrants were justified due to the petitioners' non-cooperation in the investigation.
FIR and ECIR become two different documents and both tend to take shape on its own, independent of each other.
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'.
PMLA proceedings against new accused via supplementary complaint need no pre-cognizance hearing under BNSS Section 223 if original cognizance pre-exists; money laundering offence independent, prosecu....
Anticipatory bail under the PMLA requires clear evidence that the accused is not guilty and unlikely to commit further offences, which was not demonstrated in this case.
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