Court holds that Enforcement Directorate's investigation must pause on consolidated FIRs stayed by court, but can continue on separate FIRs; Non-Bailable Warrants issued without cognizance quashed
In a significant judgment dated December 18, 2025, a Division Bench of the Allahabad High Court comprising Justices Chandra Dhari Singh and Lakshmi Kant Shukla addressed the contentious issue of the Enforcement Directorate’s (ED) powers to investigate money laundering cases where the predicate offences are either stayed or non-scheduled under the Prevention of Money Laundering Act, 2002 (PMLA).
The petitions were filed by Satinder Singh Bhasin, a director of Bhasin Infotech & Infrastructure Pvt. Ltd., challenging the Enforcement Case Information Report (ECIR No. ECIR/LKZO/14/2021), Non-Bailable Warrants (NBWs) issued against him, and coercive actions under the PMLA in connection with alleged irregularities in the "Grand Venice Mall" project in Greater Noida.
The factual matrix revealed that 46 FIRs concerning the Grand Venice project were consolidated by the Supreme Court into a principal FIR No. 353/2015. However, the criminal proceedings arising from this principal FIR were stayed by the Allahabad High Court in April 2023. The petitioner contended that since the only offence surviving in the consolidated FIR is under Section 406 IPC (not a scheduled offence under PMLA), and the proceedings are stayed, the ED lacked jurisdiction to continue investigation or initiate coercive action, including issuance of NBWs and conducting raids.
The ED, on the other hand, maintained that the ECIR is an internal administrative document not equivalent to an FIR and that investigation can continue based on multiple FIRs, including five additional FIRs related to the "Mist Avenue" project, which contain scheduled offences under Sections 420, 467, 468, 471, and 120-B IPC. The ED argued that the stay on the consolidated FIRs does not affect their jurisdiction to investigate distinct scheduled offences and that the issuance of NBWs was justified due to the petitioner’s alleged evasion of summons.
After a detailed analysis, the Court observed that:
1. The ECIR is an internal document of the ED and ordinarily not subject to quashing in writ jurisdiction unless it is palpably without jurisdiction or based on non-scheduled offences.
2. The stay of criminal proceedings in the principal FIR effectively eclipses the predicate offence, temporarily suspending the jurisdictional foundation for PMLA proceedings related to that FIR.
3. The ED cannot continue coercive investigation or prosecution under the PMLA in respect of the consolidated FIRs while the stay order remains in force.
4. However, the ED is entitled to continue investigation and proceedings based on the other independent FIRs (Mist Avenue FIRs) containing scheduled offences.
5. The issuance of NBWs on April 11, 2025, without cognizance of a complaint and despite the petitioner’s cooperation and reasons for non-appearance (including illegal detention by UP Police), violated procedural safeguards and principles laid down by the Supreme Court.
6. The NBWs issued against the petitioner are set aside, and the petitioner is directed to cooperate with investigation upon prior written notice.
The Court thus declined to quash the ECIR entirely but restrained the ED from further investigation, coercive action, or issuance of summons or warrants in connection with the consolidated FIR No. 353/2015 till the stay is vacated or final adjudication is made. The petitioner was directed to pursue his pending Criminal Miscellaneous Application seeking quashing of the proceedings. The judgment underscores the necessity for ED to respect procedural safeguards and jurisdictional limits during investigation under the PMLA.
This landmark ruling clarifies the interplay between stay of predicate offences and ED’s jurisdiction under the PMLA, emphasizing that money laundering investigations cannot proceed in a vacuum without an operative scheduled offence. It also sets important precedents on the limited scope of judicial review over ECIRs and the conditions under which NBWs can be issued during ongoing investigations.
Statutory provision(s): Article 226 Constitution of India, Sections 3, 4, 5, 17, 44, 50 of Prevention of Money Laundering Act, 2002; Sections 406, 420, 467, 468, 471, 504, 506, 120-B of Indian Penal Code, 1860; Sections 154, 173, 439, 482 of Code of Criminal Procedure, 1973
Satinder Singh Bhasin v. State of U.P., (Allahabad)(DB) : Law Finder Doc Id # 2823301
