NEW DELHI: Quashing an Enforcement Case Information Report (ECIR) case against a Congress MLA and others, the Karnataka high court said the Enforcement Directorate (ED) “is not a super cop” empowered to investigate anything and everything that comes to its notice.The ruling came in a batch of petitions arising from an ED investigation into alleged irregularities in recruitment at the Kolar-Chikkaballapur District Cooperative Milk Producers Union Ltd (KOMUL). Those accused in the case included Congress MLA KY Nanjegowda and others associated with him.Taking note of submissions by the petitioners’ counsel, Justice MI Arun emphasised that the agency's powers under the Prevention of Money Laundering Act (PMLA) are “derivative and not original," and that money-laundering proceedings cannot survive independently of a scheduled offence."ED’s role under the PMLA commences only after a primary law-enforcement agency registers an FIR or a formal criminal complaint concerning a scheduled offence. Its power is derivative and not original and therefore, the agency cannot launch an investigation suo motu merely based on a standalone suspicion of money laundering," Justice Arun said, according to ANI.The court further held…
'ED is not a super cop': Karnataka HC quashes ECIR against Congress MLA, others
In short
The decision arose from petitions challenging an investigation into alleged recruitment irregularities at the Kolar-Chikkaballapur District Cooperative Milk Producers Union Ltd. The court held that PMLA powers are purely derivative, meaning proceedings collapse when the primary scheduled case is shut down, as occurred here after prosecution sanction was denied. It ruled that federal officers cannot bypass technical closures of predicate offences to sustain their own inquiries. Consequently, the court voided the November 30, 2023 ECIR, associated summonses, and an adjudicating authority order while mandating the return of seized property.
Key points
- The Enforcement Directorate cannot initiate suo motu money laundering probes based solely…: The Enforcement Directorate cannot initiate suo motu money laundering probes based solely on standalone suspicion.
- Money laundering investigations cannot legally survive once the underlying predicate offe…: Money laundering investigations cannot legally survive once the underlying predicate offence has been closed or the accused cleared.
- Federal agencies are strictly barred from continuing derivative financial probes when pro…: Federal agencies are strictly barred from continuing derivative financial probes when prosecution sanction for the primary offence is denied.