PMLA investigation can start before the predicate offence final report, but summons must strictly follow the prescribed form.

PMLA investigation may begin on the basis of a registered scheduled offence and prima facie material showing proceeds of crime, without waiting for filing of the final report in the predicate offence. The powers to summon under Section 50 permit examination during investigation and are distinct from provisional attachment. However, a summons under the Act must strictly follow Form-V under the 2005 Rules; an added direction restraining departure until permitted was held prejudicial and contrary to the prescribed format. The legal position therefore supports investigative jurisdiction before completion of the predicate case, while requiring strict compliance with the statutory form of summons.

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Issues: (i) Whether the Enforcement Directorate could initiate investigation and issue summons under the Prevention of Money-Laundering Act, 2002 before filing of the final report in the predicate offence; (ii) Whether the summons was liable to be quashed for containing a clause not found in the prescribed form.

Issue (i): Whether the Enforcement Directorate could initiate investigation and issue summons under the Prevention of Money-Laundering Act, 2002 before filing of the final report in the predicate offence.

Analysis: The statutory scheme of the Prevention of Money-Laundering Act, 2002 permits action on the basis of a registered scheduled offence and prima facie material indicating proceeds of crime. The powers under Section 50(2) and Section 50(3) enable the authorised officer to summon persons during investigation, and the Court held that such summons is distinct from provisional attachment under Section 5. It further held that PMLA proceedings are not dependent upon the culmination of the predicate offence and that filing of a final report under Section 173 of the Code of Criminal Procedure, 1973 is not a precondition for invoking the investigative powers under the Act.

Conclusion: The Enforcement Directorate had jurisdiction to investigate and issue summons before filing of the final report in the predicate offence.

Issue (ii): Whether the summons was liable to be quashed for containing a clause not found in the prescribed form.

Analysis: Rule 11 of the Prevention of Money-Laundering (Forms, Search and Seizure, etc.) Rules, 2005 requires summons under Section 50 to be issued in Form-V. The impugned summons contained an additional direction that the recipient should not depart until permitted to do so, which was not part of the prescribed form and was held to be prejudicial and contrary to the statutory format. The Court accepted that the power to summon existed, but held that the summons had to conform to the prescribed form and could not include the objectionable clause.

Conclusion: The summons was liable to be interfered with to the limited extent of the -prescribed clause, and fresh summons in Form-V was directed.

Final Conclusion: The challenge failed on jurisdiction but succeeded on the defect in the form of summons, resulting in a limited modification and direction to issue fresh summons in accordance with the Rules.

Ratio Decidendi: Investigation under the Prevention of Money-Laundering Act, 2002 may commence on a registered scheduled offence and prima facie material without awaiting the final report in the predicate offence, but a summons issued under the Act must strictly conform to the prescribed statutory form and cannot incorporate additional prejudicial conditions.

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