ECIR registration cannot be compelled on a prima facie view alone; independent ED decision-making remains necessary under PMLA.

A direction to register an ECIR cannot be sustained merely because a prima facie view exists that a predicate offence has been made out. The Supreme Court held that, on the facts, the High Court's direction was unwarranted at that stage where it had proceeded on a prima facie conclusion of breach of trust, cheating, and possible application of the Prevention of Money Laundering Act, 2002. The portion of the judgment requiring ECIR registration was set aside, and the ECIR registered pursuant to that direction was quashed. The Enforcement Directorate was left free to independently decide whether proceedings under the PMLA should be initiated.

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Issues: Whether the direction to the Enforcement Directorate to register an ECIR could be sustained merely because the High Court formed a prima facie view that a predicate offence existed.

Analysis: The direction requiring registration of an ECIR was issued on the basis of a prima facie conclusion that offences of breach of trust and cheating existed and that the matter attracted Section 3 of the Prevention of Money Laundering Act, 2002. The Supreme Court held that such a drastic direction was unwarranted at that stage. It set aside the portion of the impugned judgment directing registration of an ECIR and quashed the ECIR registered pursuant to that direction, while leaving it open to the Enforcement Directorate to independently decide whether proceedings under the Prevention of Money Laundering Act, 2002 should be initiated.

Conclusion: The direction to register the ECIR was invalid and was set aside.

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