PMLA investigation limits: ECIR survives on independent predicate offences, but coercive steps and warrants must meet statutory safeguards.

PMLA proceedings require a subsisting proceeds-of-crime basis from a scheduled offence, but an ECIR is only an internal investigative document and is not ordinarily quashable in writ jurisdiction. Where the predicate consolidated FIRs were stayed, coercive investigation could not continue against those FIRs, though independent FIRs could still sustain the ECIR to that extent. A writ challenge to search and seizure under PMLA was not entertained because it involved disputed facts and an alternate remedy before the Adjudicating Authority existed. Open-ended non-bailable warrants were set aside because the record did not show evasion or sufficient need for coercive process.

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Issues: (i) whether the ECIR could be quashed or its operation restrained in relation to the consolidated Grand Venice FIRs and the independent Mist Avenue FIRs; (ii) whether the search and seizure challenge was maintainable in writ jurisdiction; (iii) whether the Non-Bailable Warrants dated 11.04.2025 were liable to be set aside.

Issue (i): whether the ECIR could be quashed or its operation restrained in relation to the consolidated Grand Venice FIRs and the independent Mist Avenue FIRs.

Analysis: Proceedings under the Prevention of Money Laundering Act, 2002 depend upon the existence of proceeds of crime arising from a scheduled offence. An ECIR is only an internal document and is ordinarily not quashable in writ jurisdiction. The consolidation order relating to the Grand Venice FIRs did not extinguish the underlying scheduled offences, but the stay of the consolidated predicate proceedings meant that coercive investigation could not continue qua those stayed FIRs. The independent Mist Avenue FIRs, not covered by the consolidation stay, continued to supply separate predicate material sustaining the ECIR to that extent.

Conclusion: The ECIR was not quashed in entirety, but the Enforcement Directorate was restrained from proceeding coercively qua the consolidated Grand Venice FIRs until the earlier of final adjudication of the pending quashing matter, framing of charges, or any final order in the predicate case.

Issue (ii): whether the search and seizure challenge was maintainable in writ jurisdiction.

Analysis: The challenge to the search action under Section 17 of the Prevention of Money Laundering Act, 2002 raised disputed factual questions and the statute provided an efficacious alternate remedy before the Adjudicating Authority. Such matters were not fit for writ adjudication at this stage.

Conclusion: The writ challenge to the search and seizure action was rejected.

Issue (iii): whether the Non-Bailable Warrants dated 11.04.2025 were liable to be set aside.

Analysis: The record showed repeated engagement by the petitioner with the investigation, including appearance and furnishing of documents. The Enforcement Directorate did not place adequate material showing evasion of process or necessity for coercive warrant at that stage. In the circumstances, issuance of open-ended Non-Bailable Warrants was disproportionate and inconsistent with the governing safeguards.

Conclusion: The Non-Bailable Warrants dated 11.04.2025 were set aside.

Final Conclusion: The petition succeeded only to a limited extent: coercive steps were interdicted qua the stayed consolidated predicate FIRs and the Non-Bailable Warrants were annulled, while the ECIR itself was allowed to survive with respect to the independent predicate material and the search challenge was not entertained.

Ratio Decidendi: Money-laundering proceedings can continue only so long as there is a subsisting scheduled-offence foundation, but an ECIR, being an internal investigative document, is not ordinarily quashable; however, coercive steps must still conform to statutory safeguards and cannot be sustained where the predicate proceedings are stayed and the record does not show evasion justifying a warrant.

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