Facing rap from courts, the Enforcement Directorate (ED) cautioned officials not to register money laundering cases just on the basis of “criminal conspiracy” but rely on scheduled offences under Prevention of Money Laundering Act (PMLA) for taking up the investigation.

Multiple rulings including from the Supreme Court have made it clear that Section 120-B of the erstwhile Indian Penal Code, which is now 61(2) of the Bharatiya Nyaya Sanhita, 2023, cannot be a standalone “predicate offence” for registering a criminal case under the PMLA.

A “scheduled offence” under the PMLA should be the trigger for launching probe, the courts have held.

Bridge gaps

To bridge anomalies in investigation, the ED headquarters has also asked its investigators to judiciously put to use provisions of the Section 66(2) of the PMLA which allows the agency to share information about an offence with a predicate agency like the police department or customs to file a fresh FIR or complaint, said sources.

On that basis the agency can file its PMLA case, sources added.

The courts have ruled that Section 120-B of the IPC alone is not enough to register a money laundering case and start the investigation.

In some instances, some ED FIRs or cases have been quashed, sources said.

Hence, they said, it has been directed that in order to build a water tight case, other sections of the law listed in the schedule of the PMLA should be applied in the ED ECIR (FIR).

ED’s PMLA cases against Karnataka deputy Chief Minister D K Shivakumar and retired Chhattisgarh IAS officer Anil Tuteja and some others are among those which were quashed by the courts on this ground.

In the Chhattisgarh case, the ED used its powers vested under Section 66(2) of the PMLA and shared “fresh evidence” with the state police’s economic offences wing (EOW) which filed a fresh FIR against Tuteja and others.

The ED then filed a new money laundering case on the basis of this EOW complaint.