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IN THE HIGH COURT OF KERALA AT ERNAKULAM
RAJA VIJAYARAGHAVAN V.
V.P.Nandakumar – Appellant
Versus
Deputy Director, Directorate of Enforcement – Respondent
Headnote: Read headnote
ORDER :
The petitioners herein have been arrayed as accused Nos.1 and 2 in the Enforcement Case Information Report (‘ECIR’ for the sake of brevity) registered by the Enforcement Directorate (‘ED’ for the sake of brevity) as ECIR/36/KCZO/2022 dated 06.09.2022. They have approached this Court seeking to quash the ECIR and all further proceedings pursuant thereto.
2. The petitioner asserts that the aforementioned ECIR arose following the registration of Crime No.376/2022 at the Valappad Police Station, which pertains to an alleged offence under Section 420 of the IPC. It was consequent to the registration of the FIR at the instance of a certain P.K. Sagar that ECIR/36/KCZO/2022 dated 06.09.2022 was drawn up, invoking the provisions of the Prevention of Money Laundering Act, 2002 (PMLA, 2002).
3. The petitioners contend that immediately after the registration of the FIR, both the petitioners and the complainant arrived at an amicable settlement and decided to resolve the issues. The petitioners approached this Court an
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.
An ECIR is an internal document of the ED and cannot be quashed under Section 482 of the Cr.P.C. as it does not equate to an FIR.
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 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'.
(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....
Without a predicate offense, proceedings under the Prevention of Money Laundering Act cannot be sustained, as established by the Supreme Court.
The court established that the closure of a predicate offence negates the basis for any subsequent money laundering investigation under the PML Act.
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