PMLA proceedings are not vitiated if a predicate offence continues to subsist in a primary FIR, even if a subsequent FIR covering the same facts is quashed to avoid multiplicity of proceedings.

ORDER :

B. P. Sharma, J.

As the issue involved in both the petitions is common and identical, they are being heard and decided together by this common order. For the shake of convenience the facts are being taken from Writ Petition No.9694/2025.

The present writ petitions have been instituted invoking the extraordinary jurisdiction of this Court under Article 226 of Constitution of India, calling in question the legality, validity and propriety of ECIR bearing No. ECIR/BHZO/13/2024 and all consequential proceedings initiated by the Directorate of Enforcement under the Prevention of Money Laundering Act, 2002 (hereinafter PMLA). The petitioners have, in substance, sought to contend that the very substratum of the proceedings under the PMLA stands extinguished in view of the quashing of FIR No.27/2024 registered by the Economic Offences Wing, Bhopal, and therefore, the continuation of investigation by the Enforcement Directorate is without jurisdiction and amounts to an abuse of the process of law.

2. The facts of the case, as borne out from the record, indicate that allegations of serious economic offences have been made against the petitioner–company and its functionaries, involving manufacture and export of adulterated milk products using forged laboratory reports. Initially, FIR No.0492/2023 was registered at Police Station Habibganj under Sections 420, 406 and 120-B IPC and subsequently, FIR No.27/2024 came to be registered by the Economic Offences Wing, Bhopal under Sections 420, 467, 468, 471 and 120-B of IPC, containing allegations of fabrication of laboratory reports and export of substandard products. On the basis of the said material and other information, the Directorate of Enforcement registered ECIR bearing No. ECIR/BHZO/13/2024 and initiated proceedings under the PMLA against the petitioners and their company.

3. It is not in dispute that FIR No.27/2024 came to be quashed by this Court in Writ Petition No.22979/2024 by order dated 13.02.2025. However, the precise scope and effect of the said order form the central issue in the present case. The core question which arises for consideration is whether, after the quashing of FIR No.27/2024 registered by the EOW, the Enforcement Directorate is left without any valid source or material to continue its investigation under the PMLA, or whether the earlier FIR No.0492/2023 registered at Police Station Habibganj continues to provide the requisite jurisdictional foundation.

4. Learned counsel for the petitioners has vehemently contended that the proceedings under the PMLA are entirely dependent without any existence a valid and subsisting scheduled offence, and that in the present case, the ECIR was admittedly registered on the basis of FIR No.27/2024. It is submitted that once the said FIR has been quashed by this Court, the very foundation of the ECIR stands obliterated and consequently, all proceedings under the PMLA must necessarily fall. Learned counsel further submits that the existence of a scheduled offence is a sine qua non for invoking the provisions of the PMLA and in the absence of such an offence, the continuation of proceedings amounts to a jurisdictional error. Reliance has been placed upon the judgment in Mahanivesh Oils & Foods Pvt. Ltd. v. Directorate of Enforcement, (2016 SCC Online Del 475) to contend that there must be a clear nexus between the property and the alleged proceeds of crime, and that in the absence of a valid predicate offence, such nexus cannot exist. Further, reliance has been placed upon the judgment in Harish Fabiani and others v. Enforcement Directorate (2022 SCC Online Del 3121) to contend that the proceedings under the PMLA cannot be sustained independently in the absence of a valid scheduled offence. Learned counsel has also relied upon Jagati Publications Ltd. v. Enforcement Directorate , (2022 SCC Online TS 1605) and Manturi Shashi Kumar v. Directorate of Enforcement , (2023 SCC Online TS 1098) to submit that the proceedings under the