Enforcement Directorate can’t assume predicate offence committed: Delhi HC
New Delhi: The Delhi High Court has held that the Enforcement Directorate (ED) has the power to investigate and inquire into an offence of money laundering under the Prevention of Money Laundering Act (PMLA) only and it cannot assume that a predicate offence has been committed.
The high court said the predicate offence has to be necessarily investigated and tried by the authorities empowered by law in that regard and the ED cannot possibly arrogate unto itself the power to investigate into the alleged commission of those offences.
“What needs to be emphasised is that the PMLA empowers the ED to investigate Section 3 offences only. Its power to investigate and enquire stands confined to the offence of money laundering as defined in that section. However, the same cannot be read as enabling it to assume from the material, that it may gather in the course of that investigation, that a predicate offence stands committed.
“The predicate offence has to be necessarily investigated and tried by the authorities empowered by law in that regard,” Justice Yashwant Varma said in a 111-page judgement passed on January 24.
The high court said, “The primary function to investigate and try such offences remains and vests in authorities constituted under those independent statutes In any case, it (ED) cannot and on its own motion proceed on the surmise that a particular set of facts evidence the commission of a scheduled offence and based on that opinion initiate action under the PMLA.”
It said if in the course of its enquiry and investigation, ED was to come to the conclusion that the material in its possession evidences the commission of an offence created under any other enactment, it would be obliged to furnish requisite information in respect thereof to the agency concerned for necessary action.
The high court’s verdict came while allowing two separate petitions filed by Prakash Industries Limited and Prakash Thermal Power Limited challenging the Provisional Attachment Orders (PAO) issued by the ED on November 29, 2018.
The proceedings drawn by the ED emanate from an allocation of the Fatehpur Coal Block in Chhattisgarh.
It was alleged that the two companies misrepresented their net worth to procure coal block. An FIR was lodged by the CBI under the provisions of the IPC and Prevention of Corruption Act.
