Kerala High Court backs ED powers, says no FIR needed for money laundering civil action

CMRL had approached the Division Bench with a prayer to quash the enforcement case information report (ECIR) – the ED’s equivalent of an FIR — claiming that without a prior complaint or crime for a scheduled offence, the ED cannot proceed against them.

Rejecting the petitioner’s plea, the court said: “As regards the prayer to quash the ECIR, we hold that since the ECIR is not a statutory document and even the non-registration of an ECIR does not impede the commencement of civil action, the prayer to quash the ECIR cannot be granted in this case. The contention of the appellants is that the registration of an ECIR, in the absence of a crime or complaint registered by a competent jurisdictional authority, is legally unsustainable”.

The court said ECIR is not a statutory document, and there is no provision in the PMLA, requiring the authority mentioned in Section 48 to record it or to furnish copy thereof to the accused. Non-recording of an FIR regarding a scheduled offence will not impede the commencement of an inquiry/investigation for initiating civil action or provisional attachment of property, being proceeds of crime by the authorities referred to in Section 48 of the PMLA. Immunity from prosecution can be granted only for any action under the IT Act and the Wealth Tax Act. The PMLA is an independent statute with its own scheme of enforcement, said the court.

The ED case against CMRL has hogged limelight since CPI(M) Politburo member and former chief minister Pinarayi Vijayan’s daughter Veena Vijayan is under the scanner of the central agency following the finding of the Income Tax Department in 2019 that the company had paid Rs 2.78 crore to her now defunct IT firm Exalogic Solutions without rendering any service. Last week, ED had raided Vijayan’s premises as part of its probe. The raid was held a day after a single bench of the high court rejected CMRL’s plea to quash all proceedings against it.