Punjab-Haryana High Court
Pawan Insaa vs Directorate Of Enforcement Govt Of ... on 10 April, 2024
Author: Manjari Nehru Kaul
Bench: Manjari Nehru Kaul
IN THE HIGH COURT OF PUNJAB & HARYANA
AT CHANDIGARH
2024:PHHC:049512
CRM-M No.6378 of 2023
Reserved on: April 1st, 2024
Pronounced on: April 10th, 2024
Pawan Insaa
.....Petitioner
Versus
Directorate of Enforcement, Government of India,
Chandigarh Zonal Office, Chandigarh
.....Respondent
CORAM: HON'BLE MRS. JUSTICE MANJARI NEHRU KAUL
Argued by: Mr. Bipan Ghai, Senior Advocate
with Mr. Nikhil Ghai, Advocate
for the petitioner.
Mr. Arvind Moudgil, Senior Counsel, Government of India
with Mr. Sahil Rangra and Mr. Naveen Kumar, Advocates
for the respondent.
MANJARI NEHRU KAUL, J.
Petitioner is seeking the quashing of Enforcement Case
Information Report i.e. ECIR/01/CDZO/2018 dated 05.02.2018 being
illegal and abuse of process of law in view of the judgment passed by
Hon'ble the Supreme Court in Vijay Madanlal Choudhary and others
Versus Union of India and others, 2021 SCC OnLine SC 1048, and
Parvathi Kollur and another Versus State by Directorate of
Enforcement, 2022 LiveLaw (SC) 688, since the petitioner has already
been discharged of the predicate offences.
2. Submissions made by learned senior counsel for the
petitioner:
2A. Scheduled offences as the basis of ECIR:-
(i) That the impugned ECIR (Annexure P-2) lists the
scheduled offences as Section 121-A and Section 120-B IPC, stemming
from FIR No.345 dated 27.08.2017 (Annexure P-3) under Sections
120-B, 121-A, 145, 150, 151, 152, 153, 146, 121, 216 of the IPC
registered at Police Station Sector 5, Panchkula, where the petitioner
had also been implicated.
2B. Discharge in scheduled offences by trial Court:-
(i) That notably, the learned trial Court, Panchkula, vide its
order dated 02.11.2019 (Annexure P-4), discharged the petitioner of the
offences under Sections 121 and 121-A IPC. Therefore, given the
discharge of the petitioner of the predicate offence, the continuance of
proceedings under the Prevention of Money Laundering Act, 2002
(hereinafter referred to as 'PMLA'), which were initiated on the
strength of the predicate offence, would be against the settled law and
an abuse of the legal process. In support learned senior counsel has
placed reliance upon the judgments passed in Vijay Madanlal
Choudhary and others Versus Union of India and others, 2021 SCC
OnLine SC 1048, and Parvathi Kollur and another Versus State by
Directorate of Enforcement, 2022 LiveLaw (SC) 688, wherein Hon'ble
the Supreme Court held that if the accused is finally discharged or
acquitted of the scheduled offence, or if the criminal case against the
accused is quashed by a competent Court, the offences of PMLA would
not subsist.
2C. The offence under Section 120-B of the IPC is not a
standalone offence:-
(i) That it has been settled by Hon'ble the Supreme Court in
Criminal Appeal No.2779 of 2023 titled as Pavana Dibbur Versus
The Directorate of Enforcement that an offence under Section 120-B of
the IPC becomes a scheduled offence only if the alleged conspiracy is in
relation to committing an offence included in the schedule. However, in
the instant case, as already highlighted earlier, the petitioner has already
been discharged of the scheduled offence. Consequently, the
proceedings under PMLA cannot persist solely on the basis of an
offence under Section 120-B IPC.
3. Submissions made by learned counsel for respondent-
Directorate of Enforcement (for short 'ED'):
3A. Preliminary objections on maintainability of the petition:
(i). That the instant petition under Section 482 of the Cr.P.C.
seeking the quashing of ECIR is not tenable, as it is an internal
administrative document of the ED. It cannot be kept at par with an FIR,
much less equated with it. Consequently, the provisions of the Code of
Criminal Procedure (hereinafter referred to as Cr.P.C.) are not
applicable to the ECIR. In such circumstances, this Court cannot
exercise its inherent jurisdiction under Section 482 of the Cr.P.C. to
quash the ECIR. The appropriate remedy available to the petitioner
would be to invoke the writ jurisdiction of this Court under Article 226
of the Constitution of India. In support, learned counsel has placed
reliance upon Vijay Madanlal Choudhary's case (supra), N. Dhanraj
Kochar and others Versus Enforcement Directorate 2022 SCC OnLine
Mad 8794 and Jitender Nath Patnaik Versus ED, CRLMC No.2891 of
2023, decided on 02.09.2023.
3B. Survival of scheduled offence under Section 120-B IPC:
(i) That the petitioner has not yet been discharged under
Section 120-B IPC. Since one of the alleged scheduled offences still
subsists, there is no impediment in proceeding against the petitioner.
4. Rebuttal by learned senior counsel for the petitioner:
(i) Learned senior counsel for the petitioner has contended that
ECIR is registered by the ED, which is an investigating agency
specializing in investigating the criminal offences under the PMLA.
Consequently, since there are allegations of commission of criminal
offences under the PMLA, and the fact that the registration of an ECIR
results in penal consequences, the present petition would indeed be
maintainable under Section 482 of the Cr.P.C. Moreover, it has been
emphasized that the broad scope and spirit of Section 482 of the
Cr.P.C., which aims to prevent abuse of process of the Court, should not
be constrained by overly technical interpretations.
5. I have heard learned counsel for the parties and perused the
relevant material on record.
6. Without delving into the merits of the case, this Court at
the outset would have to first address the preliminary objections raised
by learned counsel for ED, wherein challenge has been laid to the
maintainability of the instant petition. The primary question which has
arisen for the consideration is whether the ECIR can be quashed in the
exercise of its inherent jurisdiction under Section 482 Cr.P.C. by this
Court. This necessitates an inquiry into the nature, scope and import of
an ECIR. In this regard, it would be most relevant to reproduce the
following observations made by Hon'ble the Supreme Court in
Vijay Madanlal Choudhary's case (supra).
"457. Suffice it to observe that being a special
legislation providing for special mechanism regarding
inquiry/investigation of offence of money-laundering,
analogy cannot be drawn from the provisions of 1973
Code, in regard to registration of offence of money-
laundering and more so being a complaint procedure
prescribed under the 2002 Act. Further, the authorities
referred to in Section 48 of the 2002 Act alone are
competent to file such complaint. It is a different
matter that the materials/evidence collected by the
same authorities for the purpose of civil action of
attachment of proceeds of crime and confiscation
thereof may be used to prosecute the person involved
in the process or activity connected with the proceeds
of crime for offence of money-laundering. Considering
the mechanism of inquiry/investigation for proceeding
against the property (being proceeds of crime) under
this Act by way of civil action (attachment and
confiscation), there is no need to formally register an
ECIR, unlike registration of an FIR by the
jurisdictional police in respect of cognizable offence
under the ordinary law. There is force in the stand
taken by the ED that ECIR is an internal document
created by the department before initiating penal action
or prosecution against the person involved with process
or activity connected with proceeds of crime. Thus,
ECIR is not a statutory document, nor there is any
provision in 2002 Act requiring Authority referred to
in Section 48 to record ECIR or to furnish copy thereof
to the accused unlike Section 154 of the 1973 Code.
The fact that such ECIR has not been recorded, does
not come in the way of the authorities referred to in
Section 48 of the 2002 Act to commence
inquiry/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 accused, and the
absence of such provision does not in any manner impinge upon any
constitutional or statutory rights of a person. Thus, an ECIR is an
administrative document prepared by the officers of the ED. It precedes
the commencement of the prosecution against individuals involved in
the offence of money laundering, which in turn is governed by special
statute i.e. PMLA.
7. This Court unhesitatingly concurs with the contentions
made by the learned counsel for the respondent-ED that the ECIR is an
internal administrative document of the ED. Consequently, in the
considered opinion of this Court, since the ECIR precedes the stage of
criminal prosecution and proceedings, it thus falls outside the purview
of the inherent jurisdiction conferred upon this Court by Section 482 of
the Cr.P.C. Therefore, the prayer of the petitioner for quashing of the
ECIR under Section 482 of the Cr.P.C. cannot be entertained.
8. Though the learned senior counsel for the petitioner has
emphatically argued that mere technicalities should not come in the way
of entertaining the instant petition under Section 482 Cr.P.C. keeping in
view the amplitude of the powers conferred upon this Court, however, it
cannot be over-emphasized that the powers of this Court are not
unbridled and can be exercised under Section 482 Cr.P.C. only to give
effect to any order under the Cr.P.C.; or to prevent abuse of the process
of any Court; or to secure the ends of justice in relation to a criminal
proceeding. Since the ECIR is not a statutory document under the
Cr.P.C. and thus, cannot be equated to initiation of any criminal
proceeding, aforementioned argument advanced by the learned senior
counsel cannot be accepted as it would result in this Court exceeding its
jurisdiction under Section 482 Cr.P.C.
9. As a sequel to the above discussion, without delving into
the merits of the case, the present petition fails on grounds of
maintainability itself, and is dismissed as such.
10. However, it is made clear that anything observed
hereinabove shall not be construed to be an expression of opinion on the
merits of the case.
April 10th, 2024 (MANJARI NEHRU KAUL)
Puneet JUDGE
Whether speaking/reasoned : Yes
Whether reportable : Yes
