CHENNAI: In a significant ruling, the Madras High Court has held that mere registration of an FIR on a predicate offence does not mandate the Enforcement Directorate (ED) to register a case on money laundering but the subjective satisfaction of the authorised officer of the agency is essential for initiating such proceedings.
Dismissing petitions seeking directions to the ED to register Enforcement Case Information Report (ECIR) based on FIRs registered by the Directorate of Vigilance and Anti-Corruption (DVAC) against seven former AIADMK ministers, the court said the central agency is free to decide on initiating money laundering proceedings under Prevention of Money Laundering Act (PMLA) against them.
The ruling was given by the first bench of Chief Justice Sushrut Arvind Dharmadhikari and Justice G Arul Murugan on petitions filed by DMK MP R Girirajan seeking ED action on the ex-ministers for alleged misappropriation of public funds.
“The registration of FIR in a predicate offence does not ipso facto mandate the ED to register an ECIR, but it is only based on the satisfaction of the authorised officer from the predicate case and the materials available. This court cannot substitute the satisfaction of ED, which is to be arrived at from the materials available, in accordance with PMLA,” the bench said in a recent order.
Satisfaction of ED must for PMLA case: HC
Petitioner Girirajan had filed the petitions seeking ED to register cases on the basis of FIRs registered against former ministers SP Velumani, P Thangamani, C Vijaya Baskar, MR Vijayabaskar, R Kamaraj, KC Veeramani, KP Anbalagan, former MLA B Sathyanarayanan alias T Nagar Sathya, and former president of Central Cooperative Bank in Salem R Elangovan by the DVAC for ‘large scale corruption’ and ‘misappropriation of public funds’.
Pointing out that the cases were registered for offences under Section 13(2) r/w 13(1)(e) and Section 13(2) r/w 13(1)(b), Girirajan noted that the offences committed by them constitute ‘scheduled offences’ under the PMLA but ED has not yet registered money laundering cases against them.
The CJ bench, citing the Supreme Court’s judgment in R Madhavan Pillai case, said, “The PMLA does not contemplate that wherever the case is registered invoking scheduled offences, the ED is mandated to register an ECIR. It is only based on the satisfaction of the authorised officer that there are proceeds of crime, the authority would proceed further under the Act.”
The court had also recently dismissed the petitions seeking money laundering proceedings against BJP state president Nainar Nagenthran and former organisation secretary Kesava Vinayagam based on the FIR registered by CB-CID in connection with the seizure of Rs 3.98 crore from men linked to Nagenthran allegedly for distributing to voters of the Tirunelveli Lok Sabha constituency in 2024.
