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Issues: (i) Whether the FIR registered by the State police and the connected preliminary action under Section 66(2) of the Prevention of Money-Laundering Act, 2002 were liable to be quashed for alleged violation of the Supreme Court's interim directions and for being a second FIR; (ii) Whether the Enforcement Directorate's ECIR, arrest, remand orders, and continuation of investigation in the subsequent ECIR were liable to be quashed.
Issue (i): Whether the FIR registered by the State police and the connected preliminary action under Section 66(2) of the Prevention of Money-Laundering Act, 2002 were liable to be quashed for alleged violation of the Supreme Court's interim directions and for being a second FIR?
Analysis: The Court found that the State FIR and the earlier Uttar Pradesh FIR were not identical. The Chhattisgarh FIR covered a broader conspiracy involving illegal commission on liquor sales, unaccounted liquor, duplicate holograms, and corruption in the excise administration, whereas the Uttar Pradesh FIR was confined to a narrower set of allegations concerning holograms. The Court also held that the communication made by the Enforcement Directorate was prior to the Supreme Court's stay order and was protected by the disclosure obligation under Section 66(2) of the Prevention of Money-Laundering Act, 2002. Since an officer receiving information disclosing a cognizable offence is bound to register an FIR, the State action was treated as lawful and not as contempt or a prohibited second proceeding on the same facts.
Conclusion: The challenge to the Chhattisgarh FIR and the Section 66(2) disclosure failed.
Issue (ii): Whether the Enforcement Directorate's ECIR, arrest, remand orders, and continuation of investigation in the subsequent ECIR were liable to be quashed?
Analysis: The Court held that an ECIR is an internal document and is not to be equated with an FIR. It noted that the subsequent ECIR was founded on a different predicate FIR containing scheduled offences under the Prevention of Money-Laundering Act, 2002, unlike the earlier ECIR which had been dealt with by the Supreme Court only to the extent of quashing the complaint based on the earlier ECIR. The Court further held that the arrest was based on material in possession and recorded reasons to believe, and that the remand orders did not suffer from illegality. It also found no basis to interfere with the ongoing investigation, as the matter involved a large organized corruption and money-laundering network and the petitioners had not shown any legal infirmity warranting quashing at the investigation stage.
Conclusion: The challenge to the ECIR, arrest, remand, and investigation failed.
Final Conclusion: The petitions were not made out for interference, and the criminal and money-laundering proceedings were permitted to continue.
Ratio Decidendi: Where the later criminal and money-laundering proceedings arise from distinct facts and a different predicate offence, and the statutory disclosure mechanism under Section 66(2) is lawfully invoked, the FIR, ECIR, arrest, and remand will not be quashed merely because an earlier connected proceeding was partly interfered with or because the accused asserts a common factual matrix.
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