TaxTMI 
TaxTMI 
2026 (8) TMI 423
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.... of Money Laundering Act, 2002 ('the PMLA' for short). Though the challenge ostensibly appears to be to the registration of an ECIR, the controversy that truly beckons to be in consideration is far more fundamental. It concerns the width and amplitude of the constitutional power of judicial review, the interplay between Article 226 of the Constitution of India and Section 482 of the Code of Criminal Procedure, 1973 (for short 'the Cr.P.C.) / Section 528 of the Bharatiya Nagarika Suraksha Sanhitha, 2023 (for short 'the BNSS') and whether the mere nomenclature of an ECIR as an 'administrative document' can place it beyond the scrutiny of constitutional Courts despite the grave consequences that inexorably flow from it. SHORN OF UNNECESSARY DETAILS, THE FACTS, IN BRIEF, ARE AS FOLLOWS: 2. The 1st petitioner was engaged in the business of operating an online technology platform enabling users to participate in online gaming. Upon the coming into force of the Promotion and Regulation of Online Gaming Act, 2025, the said business stood discontinued in obedience to the legislative command. The 2nd petitioner, a subsidiary of the 1st petitioner, operates the online platform Pocket 52....
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....ntally misconceived, as the writ petition calls in question an ECIR, a document which, according to him, stands on an entirely different footing from a First Information Report registered under Section 154 of the Cr.P.C. An ECIR, it is urged, is neither a statutory creation nor a document recognised by the Cr.P.C.; it is but an internal administrative record maintained by the Directorate of Enforcement to facilitate its inquiry under the PMLA. Therefore, a criminal petition under Section 482 of the Cr.P.C. / Section 528 of the BNSS, seeking to assail such an internal document is, in his submission, not entertainable. To fortify the said preliminary objection, learned senior counsel places reliance upon a catena of judgments rendered by the Apex Court and several High Courts, all of which, according to him, unequivocally declare that an ECIR, not being akin to an FIR, cannot become the subject-matter of challenge in proceedings invoking the inherent jurisdiction of this Court. It is his emphatic submission that unless this threshold objection is answered in favour of the petitioners, the Court would not even enter the realm of merits, for the issue of maintainability must necessaril....
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....rless merely because the challenge is directed against an ECIR is to read into the Rules a restriction that does not exist. The constitutional jurisdiction under Article 226 of the Constitution of India, coupled with the inherent jurisdiction preserved under Section 482 of the Cr.P.C., remains unfettered and cannot be curtailed by administrative nomenclature or procedural technicalities. 12. Sri Vikram Chaudhary, learned senior counsel, in particular, would place strong reliance upon the judgment of the High Court of Punjab and Haryana in CHETAN GUPTA V. DIRECTORATE OF ENFORCEMENT reported in 2024 SCC OnLine P&H 1326. Drawing the Court's attention to the said decision, learned senior counsel would submit that the very same preliminary objection, projected by the very same learned senior counsel appearing for the Directorate of Enforcement, came to be considered and rejected by the High Court of Punjab and Haryana in CHETAN GUPTA (supra). The High Court of Punjab and Haryana after an elaborate analysis of the statutory framework and the constitutional jurisdiction of the High Court, unequivocally held that a petition under Section 482 of the Cr.P.C. challenging an ECIR and all co....
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....ds as follows: "482. Saving of inherent powers of High Court- Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice." 7. A mere reading of the above provision shows that the High Court has been clothed with inherent powers to, (a) make such orders as may be necessary to give effect to any order under this Code; (b) to prevent abuse of the process of any Court; (c) or otherwise to secure the ends of justice. 8. The expression "or otherwise to secure the ends of justice" should be read ejusdem generis with (b) above. 9. It is to be borne in mind that an ECIR is not registered under the Code of Criminal Procedure and it is not akin to an FIR, which is registered under Section 154 Cr. P.C. and sent to the jurisdictional Magistrate in terms of Section 157 Cr. P.C. The scope of an ECIR has been discussed by a Division Bench of this Court in which one of us (PNPJ) was a Member in The Assistant Director, Di....
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....ilable if in any proceeding of a Court, whether the High Court or a Court subordinate to it, any abuse of process is found or otherwise it is felt that to secure the ends of justice certain order of the High Court is necessary; it may act thus to prevent the abuse of process of any Court or otherwise to secure the ends of justice." 12. This view has found favour with the judgment of the Supreme Court in State of W.B. v. Sujit Kumar Rana [(2004) 4 SCC 129]. For better appreciation, the relevant paragraph from Sujit Kumar Rana (supra) is extracted hereunder: "33. From a bare perusal of the aforementioned provision, it would be evident that the inherent power of the High Court is saved only in a case where an order has been passed by the criminal court which is required to be set aside CRL.O.P. No. SR 46376 of 2021 to secure the ends of justice or where the proceeding pending before a court amounts to abuse of the process of court. It is, therefore, evident that power under Section 482 of the Code can be exercised by the High Court in relation to a matter pending before a court; which in the context of the Code of Criminal Procedure would mean "a criminal court" or w....
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.....C. Be it noted that under the scheme of Cr. P.C., the criminal law is set into motion after registration of the FIR under Section 154 of Cr. P.C. and/or filing of a complaint under Section 200 of Cr. P.C. The PML Act, 2002 also prescribes for filing of complaint before the Special Court under Section 44 thereof. So what is the scope and purport of the ECIR? This very question has been considered extensively by the Supreme Court in the case of Vijay Madanlal Choudhary (supra) and decided in the following words. "ECIR VIS-A-VIS FIR 456. As per the procedure prescribed by the 1973 Code, the officer in-charge of a police station is under an obligation to record the information relating to the commission of a cognizable offence, in terms of Section 154 of the 1973 Code 703. There is no corresponding provision in the 2002 Act requiring registration of offence of money-laundering. As noticed earlier, the mechanism for proceeding against the property being proceeds of crime predicated in the 2002 Act is a sui generis procedure. No comparison can be drawn between the mechanism regarding prevention, investigation or trial in connection with the scheduled offence governed b....
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....ime and inquiry/investigation of offence of money-laundering upto filing of the complaint in respect of offence under Section 3 of the 2002 Act is fully governed by the provisions of the 2002 Act itself. To wit, regarding survey, searches, seizures, issuing summons, recording of statements of concerned persons and calling upon production of documents, inquiry/investigation, arrest of persons involved in the offence of money-laundering including bail and attachment, confiscation and vesting of property being proceeds of crime. Indeed, after arrest, the manner of dealing with such offender involved in offence of money-laundering would then be governed by the provisions of the 1973 Code - as there are no inconsistent provisions in the 2002 Act in regard to production of the arrested person before the jurisdictional Magistrate within twenty-four hours and also filing of the complaint before the Special Court within the statutory period prescribed in the 1973 Code for filing of police report, if not released on bail before expiry thereof. 457. Suffice it to observe that being a special legislation providing for special mechanism regarding inquiry/investigation of offence of mon....
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.... From a bare perusal of the aforementioned provision, it would be evident that the inherent power of the High Court is saved only in a case where an order has been passed by the criminal court which is required to be set aside to secure the ends of Justice or where the proceeding pending before a court amounts to abuse of the process of court. It is, therefore, evident that power under Section 482 of the Code can be exercised by the High Court in relation to a matter pending before a court; which in the context of the Code of Criminal Procedure would mean "a criminal court" or whence a power is exercised by the court under the Code of Criminal Procedure. Once it is held that the criminal court had no power to deal with the property seized under the Act, the question of the High Court exercising its jurisdiction under Section 482 of the Code of Criminal Procedure would not arise." Similar view was taken by a Division Bench of the Madras High Court in the case of N. Dhanraj Kochar v. The Director, Directorate of Enforcement (CRL. O.P. No. SR 46376/2021, wherein it was held that registration of ECIR being an administrative act for initiation of investigation under the PML Act....
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....is of the considered view that the act of registration of ECIR against the petitioner and the investigation/enquiry said to be in progress on such basis are not amenable to judicial review by this Court in exercise of its inherent power under Section 482 of Cr. P.C. Further, the present motion, which is at a stage when the investigation/enquiry initiated on the basis of the ECIR registered against the petitioner has not culminated in lodging of a complaint under Section 44 of the PML Act, is premature. In view of such finding, the contentions raised by the parties touching upon the merits of the case are not required to be gone into." The High Court of Orissa holds that ECIR is only an internal document and not a statutory document created by the Directorate of Enforcement before initiating prosecution. The registration of an ECIR is not akin to launching prosecution under Section 44 of the PMLA. Therefore, a criminal petition under Section 482 of the Cr.P.C., would not be maintainable. 15.3. The High Court of Punjab and Haryana in the case of PAWAN INSAA v. DIRECTORATE OF ENFORCEMENT, GOVERNMENT OF INDIA 2024 SCC OnLine P & H 5461, has held as follows: ".... .... ......
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....nquiry/investigation for initiating civil action of attachment of property being proceeds of crime by following prescribed procedure in that regard. 459. .....Suffice it to observe that ECIR cannot be equated with an FIR which is mandatorily required to be recorded and supplied to the accused as per the provisions of 1973 Code. Revealing a copy of an ECIR, if made mandatory, may defeat the purpose sought to be achieved by the 2002 Act including frustrating the attachment of property (proceeds of crime). Non-supply of ECIR, which is essentially an internal document of ED, cannot be cited as violation of constitutional right....." On a minute perusal of the above reproduced observations of Hon'ble the Supreme Court, it can be safely culled that an ECIR cannot be kept at the same pedestal as an FIR. It is crucial to note that an ECIR is not registered under the Cr. P.C., unlike a First Information Report (FIR), which is mandatorily registered under Section 154 of the Cr. P.C., and subsequently forwarded to the Illaqa Magistrate as per the provisions of Section 157 of the Cr. P.C. Additionally, there exists no legal obligation to provide a copy of the ECIR to an accus....
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....intainable. The reasoning in each of those decisions proceeds on the premise that an ECIR is but an internal administrative document of the Directorate of Enforcement and, therefore, falls outside the contours of the inherent jurisdiction preserved under Section 482 of the Cr.P.C. 16. What, however, is of considerable significance is what these judgments do not decide. None of them embark upon an examination of the maintainability of a writ petition instituted under Article 226 of the Constitution of India, either independently or in conjunction with the inherent jurisdiction preserved under Section 482 of the Cr.P.C. The constitutional width of judicial review under Article 226 of the Constitution of India, therefore, neither fell for consideration nor received judicial exposition in those decisions. Their ratio, therefore, remains confined to the maintainability of a petition under Section 482 of the Cr.P.C. and cannot be expanded to eclipse or curtail the extraordinary constitutional jurisdiction of this Court. 17. The judicial discourse, however, does not conclude with the aforesaid line of authority. There exists another equally compelling stream of precedents wherein th....
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....n be determined after investigation, the Authority shall submit a Closure Report' before the Special Court. It assists in closing cases where the investigation was completed, and no offense was found. ... ... ... 24. A perusal of the judgments passed by a Division Bench of Madras High Court in N. Dhanraj Kochar, 2022 SCC OnLine Mad 8794; and by Orissa High Court in Jitendra Nath Patnaik v. Enforcement Directorate Bhubaneswar, CRLMC No. 2891 of 2023; and by this Court in Pawan Insaa v. Directorate of Enforcement, 2024 : PHHC : 049512, clearly points out that in these cases quashing of ECIR was sought, whereas in the present case, the petitioner is not only seeking quashing of ECIR but also all consequent proceedings. There is no legal bar that restricts the powers of this Court under section 482 CrPC by ignoring the prayers to quash ECIR but to consider the remaining prayers to quash the complaint as well as all subsequent proceedings. ... ... ... 34. The full form of ECIR is the "Enforcement Case Information Report," and the full form of the FIR is the "First Information Report." The difference between the two is that ECIR is a term given to itse....
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....er cannot be applied, and if the wall is broken, the plaster would automatically break off because it cannot stand on its own. The predicate offense is that wall only on which the plaster of the scheduled offense of PMLA can be applied. No wall no plaster. Similarly, for any prosecution under scheduled offense, the requirement of a predicate offense is the sine qua non. The Enforcement Directorate has no jurisdiction to enter the foray without any primary penal offense. Further, if the predicate offense results in the filing of a closure report or the accused is discharged by the concerned Court or results in acquittal, then it would imply that the wall has broken, and with it will also go the plaster if it has been put on it. 36. It would be relevant to extract Section 65 of PMLA Act which reads as follows:- "65. Criminal Procedure Code, 1973 to apply.- The provisions of the Criminal Procedure Code, 1973 (2 of 1974) shall apply, insofar as they are not inconsistent with the provisions of this Act, to arrest, search and seizure, attachment, confiscation, investigation, prosecution and all other proceedings under this Act." 37. A plain and simple reading o....
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....s an ECIR, which the Directorate of Enforcement characterises as an internal document. To hold otherwise would be to sacrifice substance at the altar of form and permit procedural technicalities to eclipse the administration of justice. 17.1.1. The High Court, exercising its inherent jurisdiction, is concerned not with the nomenclature of the initiating document but with the legality of the entire chain of proceedings that emanates therefrom. Therefore, once the Court is seized of the matter, its jurisdiction extends to examine the validity of every consequential proceeding flowing from the impugned ECIR, lest an arbitrary or unsustainable investigation be permitted to continue merely because its point of origin is described as an administrative record. Such an interpretation alone preserves the plenitude of the inherent powers of the High Court and secures the ends of justice, which remain the very raison d'être of Section 482 of the Cr.P.C. 17.2. The High Court of Kerala in the case of SOUTH INDIAN BANK LIMITED v. DIRECTORATE OF ENFORCEMENT 2024 SCC OnLine Ker 3936 observes that an ECIR is amenable to a writ petition under Article 226 of the Constitution of India as w....
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....ngs as (i) where it manifestly appears that there is a legal bar against the institution or continuance; (ii) where the allegations in the first information report or complaint taken at its face value and accepted in their entirety do not constitute the offence alleged; and (iii) where the allegations constitute an offence, but there is no legal evidence adduced or the evidence adduced clearly or manifestly fails to prove the charge. In the above category of cases, the inherent power under section 482 Cr. P.C. can be exercised to quash the proceedings. 10. Even though the ECIR registered by the enforcement directorate is an internal and administrative document, since an investigation by the ED is impossible without the existence of a predicate offence, it is essential that the ECIR be closed by the ED on its own volition soon after the predicate offence is quashed or the accused is acquitted or discharged. When the ED refuses to close the ECIR, an aggrieved person is certainly entitled to knock at the doors of this Court either under Article 226 of the Constitution of India or under section 482 Cr. P.C. 11. The final report in the predic....
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....re at stake. 19. The very definition is inextricably tethered to the commission of a criminal offence. Crime constitutes the genesis; proceeds of crime constitute its consequence. One cannot exist in the absence of the other. The entire architecture of the PMLA is erected upon the existence of criminal activity generating proceeds of crime. Therefore, if the predicate offence itself ceases to exist-whether by discharge, acquittal or acceptance of a closure report-the superstructure erected upon such foundation cannot survive. Money laundering is not an offence floating in legal isolation; it draws its very life-breath from the scheduled offence. In the absence of a subsisting predicate offence, the very birth of an ECIR becomes legally incomprehensible. 20. The submission of the Directorate of Enforcement, if accepted, would produce consequences startling in constitutional jurisprudence. An ECIR, though branded as an "internal administrative document", authorises search, seizure, attachment of property, deprivation of liberty, arrest under one of the most stringent penal statutes in the country and prosecution carrying grave consequences. To describe such a document as merely....