Court affirms Enforcement Directorate's jurisdiction to continue investigation under PMLA, emphasizing the subsistence of earlier FIR allegations.
In a significant ruling, the Madhya Pradesh High Court has upheld the continuation of proceedings under the Prevention of Money Laundering Act, 2002 (PMLA), despite the quashing of one of the predicate FIRs. The judgment, delivered by Justice B.P. Sharma, resolves the legal debate on whether PMLA proceedings can persist when a predicate offence FIR is nullified.
The case involved M/s Jayshri Gaytri Food Products Pvt Ltd., which challenged the Enforcement Directorate's ongoing investigation under the PMLA after FIR No.27/2024, registered by the Economic Offences Wing, was quashed. The company contended that with the quashing of this FIR, the substratum for the PMLA proceedings was extinguished.
However, the Court held that the quashing of FIR No.27/2024 did not obliterate the existence of scheduled offences under FIR No.0492/2023, which was registered earlier at Police Station Habibganj. The Court noted that the allegations in the quashed FIR were part of the same transaction covered by the earlier FIR, thus providing a valid jurisdictional foundation for the PMLA proceedings.
Justice Sharma emphasized that the quashing of the second FIR was based on the legal principle that multiple FIRs for the same transaction are impermissible, not on the merits of the allegations. The Court further clarified that an Enforcement Case Information Report (ECIR) is not equivalent to an FIR and can be based on multiple sources of information.
The judgment underscores the independence of the offence of money laundering under the PMLA, which can persist as long as there is a valid scheduled offence. The ruling also highlights the Court's stance that the existence of a scheduled offence is crucial for PMLA proceedings, but such proceedings are not automatically nullified with the quashing of a related FIR.
In conclusion, the Court dismissed the petitions filed by M/s Jayshri Gaytri Food Products Pvt Ltd., allowing the Enforcement Directorate to continue its investigation into the alleged economic offences, including the manufacture and export of adulterated milk products.
Bottom Line:
Proceedings under the Prevention of Money Laundering Act, 2002 (PMLA) are not automatically extinguished upon quashing of a predicate offence, provided there exists a valid and subsisting scheduled offence forming the jurisdictional foundation.
Statutory provision(s):
Prevention of Money Laundering Act, 2002 Sections 3 and 4, Criminal Procedure Code, 1973 Section 482.
