Money-laundering inquiry material can support an FIR; later quashing of the ED complaint does not nullify prior information.

Information gathered by the Enforcement Directorate during a money-laundering inquiry may be forwarded to the competent police authority under Section 66(2) of the Prevention of Money Laundering Act, and a later quashing of the ED prosecution complaint does not retrospectively erase that material. Statements recorded under Section 50 were treated as information for initiating or furthering investigation, not as trial confessions, and Section 25 of the Evidence Act did not bar their use at the stage of setting criminal law in motion. Where the FIR disclosed cognizable offences and a prima facie role of the petitioners, challenges based on alleged non-application of mind, territorial objection, or mala fides were rejected.

---

---

Issues: (i) Whether the FIR and consequential proceedings were liable to be quashed on the ground that the Enforcement Directorate's prosecution complaint had later been quashed and the statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002 could not be used for lodging the FIR. (ii) Whether the FIR disclosed cognizable offences and a prima facie role of the petitioners, including the challenge based on absence of application of mind, lack of territorial basis, and alleged mala fides.

Issue (i): Whether the FIR and consequential proceedings were liable to be quashed on the ground that the Enforcement Directorate's prosecution complaint had later been quashed and the statements recorded under Section 50 of the Prevention of Money Laundering Act, 2002 could not be used for lodging the FIR.

Analysis: The material gathered during the money-laundering inquiry was treated as information in the possession of the Enforcement Directorate and was capable of being forwarded to the competent police authority under Section 66(2) of the Prevention of Money Laundering Act, 2002. The later quashing of the prosecution complaint did not retrospectively erase the information already available when the communication was sent. The statements recorded under Section 50 were treated as material for initiating or furthering investigation, though not as trial confessions or admissions. The protection under Section 25 of the Indian Evidence Act, 1872 was held to depend on context and did not bar the use of such material at the stage of setting criminal law in motion.

Conclusion: The FIR was not liable to be quashed on this ground.

Issue (ii): Whether the FIR disclosed cognizable offences and a prima facie role of the petitioners, including the challenge based on absence of application of mind, lack of territorial basis, and alleged mala fides.

Analysis: The FIR was held to disclose cognizable offences under the penal law and the materials on record, including subsequent investigative material, were treated as sufficient to show prima facie complicity of the petitioners. The Court declined to interfere where the complaint disclosed cognizable offences and emphasised that investigation could continue. The contention that the communication was merely a verbatim reproduction or that the matter belonged only to another State was not accepted, as the alleged wrongdoing also involved activities within Uttar Pradesh and the record did not justify treating the communication as mala fide.

Conclusion: The challenge to the FIR on these grounds was rejected.

Final Conclusion: The writ petitions were found to disclose no ground for interference, and the petitioners were left to pursue ordinary remedies available in criminal law.

Ratio Decidendi: Information gathered by the Enforcement Directorate in the course of a money-laundering inquiry may be forwarded under Section 66(2) to the competent authority for registration of an FIR, and a later quashing of the ED prosecution complaint does not nullify a prior FIR that already disclosed cognizable offences.

---