De novo investigation and money-laundering jurisdiction: blanket restart struck down, while ED proceedings and limited record inspection were upheld.

Fresh, reinvestigation or de novo investigation is an exceptional power reserved for rare cases of unfair, tainted or mala fide inquiry; a blanket direction to wipe out the earlier investigation and restart ab initio was held unsustainable and was set aside. Money-laundering proceedings could be initiated on the basis of scheduled predicate offences and alleged proceeds of crime without first identifying a segregated property, so the challenge to the Enforcement Directorate's summons and proceedings failed. Limited inspection of records before the Special Court, followed by a proper copy application, was permitted. Refusal to extend time for further investigation did not nullify the earlier direction, and the contempt petitions and request for a Special Investigation Team were dismissed.

---

---

Issues: (i) Whether the High Court could direct de novo investigation by wiping out the earlier investigation and without confining itself to the limited contours for ordering fresh investigation; (ii) Whether the Enforcement Directorate could initiate proceedings and issue summons on the basis of the predicate offences and the alleged proceeds of crime; (iii) Whether the High Court rightly permitted the Enforcement Directorate to inspect documents before the Special Court and thereafter seek copies; (iv) Whether the orders refusing extension of time for further investigation and the connected contempt petitions and interlocutory request survived.

Issue (i): Whether the High Court could direct de novo investigation by wiping out the earlier investigation and without confining itself to the limited contours for ordering fresh investigation.

Analysis: Fresh, reinvestigation or de novo investigation is an exceptional power that can be exercised only by superior courts in rare cases where the earlier investigation is shown to be unfair, tainted, mala fide or otherwise incapable of being acted upon. When such a direction is issued, the court must clearly indicate the fate of the investigation already conducted. A blanket direction to restart the matter ab initio, wipe out the earlier investigation and collect fresh material without legal basis exceeds the narrow limits of the power. The impugned order also ran counter to the earlier directions requiring proper investigation into the corruption allegations and inclusion of the Prevention of Corruption Act offences.

Conclusion: The de novo investigation order was unsustainable and was set aside. The appeals on this issue succeeded.

Issue (ii): Whether the Enforcement Directorate could initiate proceedings and issue summons on the basis of the predicate offences and the alleged proceeds of crime.

Analysis: Money-laundering under the statutory scheme is not contingent on prior identification of a segregated property before the Enforcement Directorate can act. Where the predicate complaints disclose corruption involving illegal gratification, the tainted money itself constitutes proceeds of crime. The offence is a continuing process involving the person, the process or activity, and the product, namely proceeds of crime. On the facts, the allegations disclosed scheduled offences, acquisition and possession of tainted money, and thus a sufficient jurisdictional foundation existed for the Enforcement Directorate to register proceedings and summon persons in aid of the investigation.

Conclusion: The challenge to the Enforcement Directorate's proceedings failed and the writ petitions were liable to be dismissed. The appeals on this issue succeeded.

Issue (iii): Whether the High Court rightly permitted the Enforcement Directorate to inspect documents before the Special Court and thereafter seek copies.

Analysis: The order did not direct disclosure of unmarked documents as certified copies. It only enabled inspection under the applicable Rules of Practice followed by a proper third-party copy application. That course was not inconsistent with the restriction on supplying certified copies of unmarked documents, and the electronic-record objection did not bar mere inspection. The High Court's limited facilitation of access to records was therefore within jurisdiction.

Conclusion: The appeal against the inspection order failed and was dismissed.

Issue (iv): Whether the orders refusing extension of time for further investigation and the connected contempt petitions and interlocutory request survived.

Analysis: Refusal to extend time did not extinguish the earlier direction for further investigation, especially when a further report had already been filed. The contempt allegations were not made out on the record as the alleged non-compliance was attributable to the procedural and judicial status of the matters. The request for constitution of a Special Investigation Team was also premature on the materials then available.

Conclusion: The appeal against the refusal of extension, the contempt petitions, and the interlocutory application were dismissed.

Final Conclusion: The batch resulted in partial success for the appellants: the de novo investigation order and the order restraining the Enforcement Directorate were set aside, while the challenge to document inspection, the extension-related appeal, the contempt petitions, and the special investigation team request were rejected or dismissed.

---