When main charges fail, ED should not stop investigating case, says top government lawyer

Chaudhary coupled this with a forceful defence of the ED’s expanding remit, framing opposition to its actions as part of an “ecosystem” resistant to anti-corruption efforts. The agency’s powers, he suggested, are calibrated to tackle financial crimes, and not to target individuals. He described financial crimes as akin to a “cancer” that cannot be treated “with a sweet pill” .

The issues outlined by ASG Raju resonate with ongoing high-profile cases, including the alleged irregularities in the Delhi excise policy, where Aam Aadmi Party (AAP) national convener Arvind Kejriwal is among the accused. The case has seen parallel proceedings in predicate offences and under the PMLA, with legal debates centring on how developments in one affect the other.

On February 27, a Delhi trial court discharged former CM Kejriwal, AAP leader Manish Sisodia, and 21 others in the Delhi excise policy case, citing lack of evidence. However, the Delhi High Court found these findings “prima facie erroneous”, with a CBI challenge scheduled for hearing on May 4.

ASG Raju framed the problem through a series of scenarios: Acquittal of all accused, discharge at the pre-trial stage, and even refusal by courts to take cognizance of a chargesheet. Each, he argued, required a calibrated response rather than an automatic closure of proceedings under the PMLA.

“We always say money laundering is a standalone offence… Why does it fall when the predicate offence falls?” Raju asked, before answering it himself: The law, as it stands, ties the offence to the existence of “proceeds of crime,” which, in turn, depends on a scheduled — or predicate — offence. “It is the umbilical cord,” he said, explaining that without a scheduled offence, “there cannot be money laundering”.

On discharge — where courts drop charges before trial — ASG Raju acknowledged that the “prevalent view today” is that PMLA proceedings do not survive if all accused are discharged. Yet, he argued, this should trigger a deeper response: “Look at the discharge, find the reason, go to the agency again.” In such cases, the ED could push for further investigation, especially if the initial probe was deficient, he said.

He also flagged technical barriers such as limitation periods. In offences punishable by up to two years, complaints must be filed within three years, failing which they become time-barred. “Does it mean that the offence itself did not take place?” he asked, again advocating recourse to revision proceedings.