IMPORTANT POINTS
(1) ECIR is a non-statutory internal document whose registration is not mandated by PMLA – Non-registration of FIR or non-filing of complaint in respect of a scheduled offence will not bar ED from initiating civil action under PMLA.
(2) Evidence obtained in consequence of notice under Section 50 of PMLA would serve both civil action before Adjudicating Authority and penal complaint before Special Court.
(3) It is not necessary to initiate prosecution after every inquiry.

JUDGMENT

Raja Vijayaraghavan V, J.—In Vijay Madanlal Choudhary v. Union of India, [(2023) 12 SCC 1] a Three-Judge Bench of the Apex Court was called upon to consider a wide range of challenges concerning the constitutional validity and interpretation of various provisions of the Prevention of Money Laundering Act, 2002 (for short, ‘PMLA’), as well as the procedure adopted by the Enforcement Directorate (for short, ‘ED’) while inquiring into and investigating offences under the Act.

2. In the aforesaid case, a challenge was mounted against Sections 3, 5, 8, 17, 18, 19, 24, 44, 45, 50 and 63 of the PMLA, the Schedule appended thereto, and the practice adopted by the Enforcement Directorate of registering an Enforcement Case Information Report (“ECIR”). The Apex Court, after undertaking an exhaustive and detailed examination of all the contentions advanced before it, upheld the constitutional validity of the impugned provisions. In the process, the Court authoritatively expounded the scope, ambit, and import of several foundational concepts under the Act, including “proceeds of crime” as defined under Section 2(u), “scheduled offence” as defined under Section 2(y), and the offence of money laundering under Section 3. The Court also closely examined the statutory framework governing attachment, adjudication, and confiscation under Chapter III of the Act, as well as the powers conferred upon the authorities under Chapter VIII. Particular emphasis was laid on the authority vested in such officials to issue summons, compel the production of documents, and record evidence under Section 50 of the Act.

3. Despite this authoritative and comprehensive pronouncement, the contentions raised in the present petition suggest the controversy persists.

4. In essence, the contention of the appellants is that the registration of an ECIR, in the absence of a crime or complaint registered by a competent jurisdictional authority, is legally unsustainable. According to the petitioner, in the absence of such a foundational proceeding, the Enforcement Directorate lacks the jurisdiction to invoke its powers under the Act, including the power to issue summons requiring a person to produce documents or to appear and give evidence.

5. The learned Single Judge decided the issues raised by the appellants in the writ petition against them by the judgment dated 26.05.2026. Assailing the said judgment, the appellants have preferred this appeal.

6. The case of the petitioners as averred in the Writ Petition can be summarised as follows:

a. The 1st petitioner, M/s. Cochin Minerals and Rutile Limited, (‘CMRL’ for the sake of brevity) is a Public Limited Company registered with the Registrar of Companies, Ernakulam. Petitioners 2 to 5 are employees of the 1st petitioner Company.

b. On 25.01.2019, the Income Tax Department conducted a search under Section 132 of the Income Tax Act, 1961 (for short, ‘the IT Act’) at the factory and office premises of the 1st petitioner Company, as well as at the residences of its Managing Director and certain key employees. Pursuant thereto, notices dated 29.11.2019 were issued under Sections 153A and 143A of the IT Act for the Assessment Years 2013–14 to 2019–20.

c. Subsequently, on 06.11.2020, the Company approached the Income Tax Settlement Commission by filing an application under Section 245C of the IT Act. The application culminated in an order dated 12.06.2023 passed by the Interim Board for Settlement under Section 245D(4) of the IT Act. According to the petitioners, by virtue of the said order, the 1st petitioner was granted immunity under Section 245H of the IT Act from prosecution for any offence under the Act relating to the aforesaid assessment years.

d. On 25.09.2023, a complaint was submitted by one Mr. Shone George before the Ministry of Corporate Affairs (for short, “MCA”), seeking an investigation into the affairs of the 1st petitioner Company under Sections 210(1)(c) and 212 of the Companies Act, 2013. There