Independent money-laundering inquiry may continue despite remand in the predicate case and absence from the FIR accused list.

The Punjab and Haryana HC noted that a stay or later remand of the predicate order under Section 156(3) CrPC did not automatically nullify the registered FIRs or bar an independent money-laundering inquiry. It treated the Enforcement Case Information Report as an internal step and held that proceedings under the Prevention of Money-Laundering Act could continue where scheduled offences and possible proceeds of crime existed, even if the person concerned was not shown as an accused in the predicate FIR. It also held that non-bailable warrants issued during investigation were not illegal where the accused had not cooperated and the warrants were meant to secure appearance before the Court. The petitions were found to lack merit.

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Issues: (i) Whether the Enforcement Case Information Report could be sustained notwithstanding stay of the order passed under Section 156(3) of the Code of Criminal Procedure and later setting aside of that order with the matter remanded for fresh consideration; (ii) whether non-bailable warrants issued during investigation were illegal; (iii) whether proceedings under the Prevention of Money-Laundering Act, 2002 could continue against a person not shown as an accused in the predicate FIR and where other scheduled offences were also in existence.

Issue (i): Whether the Enforcement Case Information Report could be sustained notwithstanding stay of the order passed under Section 156(3) of the Code of Criminal Procedure and later setting aside of that order with the matter remanded for fresh consideration.

Analysis: The order passed under Section 156(3) of the Code of Criminal Procedure was only remitted for fresh consideration and was not treated as resulting in automatic quashing of the registered FIRs. The Enforcement Case Information Report was an internal document and the offence of money-laundering is distinct and independent from the predicate offence. The interim stay of further proceedings in the FIRs did not operate as a restraint on the Enforcement Directorate, which was not a party to the earlier proceedings. The existence of other FIRs containing scheduled offences also supported continuation of the inquiry.

Conclusion: The Enforcement Case Information Report was held to be valid and its continuation was upheld.

Issue (ii): Whether non-bailable warrants issued during investigation were illegal.

Analysis: A Magistrate may issue warrants during investigation, but such warrants are to secure presence before the Court and not to place the accused before the investigating agency. The record showed non-cooperation and non-appearance despite summons. The impugned warrants were reasoned and did not direct production before the Enforcement Directorate. In these circumstances, issuance of warrants could not be termed illegal.

Conclusion: The challenge to the non-bailable warrants was rejected.

Issue (iii): Whether proceedings under the Prevention of Money-Laundering Act, 2002 could continue against a person not shown as an accused in the predicate FIR and where other scheduled offences were also in existence.

Analysis: A person need not necessarily be an accused in the scheduled offence to face proceedings under the Prevention of Money-Laundering Act, 2002, so long as the scheduled offence and proceeds of crime exist. The existence of additional FIRs involving scheduled offences meant that proceeds of crime could not be ruled out. At the investigation stage, no conclusive finding could be returned that the money-laundering case lacked foundation.

Conclusion: The objection to continuation of proceedings on this ground failed.

Final Conclusion: The petitions were found to lack merit and the enforcement proceedings were allowed to continue.

Ratio Decidendi: Stay or remand of proceedings in the predicate case does not, by itself, bar an independent money-laundering inquiry, and proceedings under the 2002 Act may continue where a scheduled offence and possible proceeds of crime exist.

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