ED not a super police agency to probe every case that comes to its notice: HC
In Short
The Directorate’s powers depend on the actions of other investigating agencies and are not independent in nature, assert legal circles
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Enforcement Directorate
Bengaluru: The High Court has observed that the Enforcement Directorate (ED) is not a “super police” agency empowered to investigate every case that comes to its notice.
The court clarified that the ED cannot independently initiate money laundering investigations by bypassing the legal procedures prescribed under the Prevention of Money Laundering Act (PMLA).
The court stated that the powers granted to the ED under the PMLA are not independent or primary powers but depend on the actions taken by other investigating agencies. It further observed that proceedings under the PMLA cannot continue if the underlying scheduled offence, which forms the basis of the alleged money laundering, does not exist.
The observations were made while quashing the Enforcement Case Information Report (ECIR) registered by the ED against Congress MLA K.Y. Nanjegowda and several others, along with all subsequent proceedings arising from it. The case originated from allegations of irregularities in staff recruitment at the Kolar-Chikkaballapur District Cooperative Milk Producers’ Union Limited (KOMUL).
ED cannot initiate investigation independently
Advocate Mayank Jain appeared on behalf of Congress MLA KY Nanjegowda and other petitioners. They challenged the ECIR registered by the ED, subsequent proceedings under the PMLA and a private complaint filed by the agency. The High Court clarified that money laundering proceedings cannot be pursued independently of the existence of the scheduled offence under the PMLA.
Considering the arguments presented by Advocate Mayank Jain, the court observed that the ED’s jurisdiction under the PMLA comes into operation only after the primary law enforcement agency registers an FIR or an authorised criminal complaint concerning a scheduled offence. Justice Arun observed that the ED’s powers depend on the actions of other investigating agencies and are not independent in nature. The court also made it clear that the ED cannot initiate an investigation on its own merely on the basis of suspicion of money laundering.
HC questions ED’s power to file private complaints
The High Court also strongly criticised the ED for allegedly exceeding its jurisdiction by filing a private complaint. The court questioned the agency’s decision to file a private complaint when the concerned investigating agency had not taken action based on information shared under Section 66(2) of the PMLA. Under Section 66(2), if the ED comes across information regarding violations of other laws during its investigation, it is required to share that information with the appropriate investigating agency.
The court clarified that the ED cannot take over the investigation of offences falling under other laws on its own. Instead, it must share the relevant information with the competent authorities for appropriate action.
Emphasising the importance of constitutional checks and balances, the High Court observed that statutory powers must be exercised strictly in accordance with the procedures prescribed by law. The court further noted that the constitutional principles of separation of powers and institutional checks and balances do not permit any single agency to assume supreme authority.
