Hello Friends, Sometimes in the judicial process, such decisions come which clarify many legal aspects. Recently, the Supreme Court, taking an important decision, quashed the order of the High Court, which forcibly asked the Enforcement Directorate (ED) to register an Enforcement Case Information Report (ECIR). In this decision, the Supreme Court made it clear that it is not justified to direct the ED to register an ECIR only based on a predicate offence. The court also made it clear that the Enforcement Directorate should have complete freedom to decide at its discretion whether to initiate an investigation under the Prevention of Money Laundering Act (PMLA), 2002 in a case.

Why did the High Court order ED?

The matter started when the High Court directed the Enforcement Directorate to register an ECIR against all the alleged involved persons in cases related to some financial irregularities. The High Court found that an FIR was registered only against the secretary in the case, but no criminal proceedings were initiated against other persons. On this, the High Court sought clarification from the Home Secretary and Additional Chief Secretary, Cooperative Societies as to why action was not taken against others. The court, considering the case as a primary offence under Section 3 of PMLA, asked the ED to start the investigation.

Why did the Supreme Court reject the order?

In this case, the petitioner argued in the Supreme Court that the High Court went beyond its jurisdiction and ordered the ED to register an ECIR. The petitioner said that ECIR is an internal process of the Enforcement Directorate and the decision to start its investigation or not should be at the discretion of the agency. Apart from this, just by registering an FIR, it is not necessary for the ED to automatically start an investigation under money laundering. After hearing these arguments, the Supreme Court found that the High Court had violated its jurisdiction. The court said that filing an ECIR is an administrative decision and it should be part of the independent investigation process of the Enforcement Directorate. The court said in its judgment, “In our opinion, there was no reason for the High Court to pass such a strict order, forcing the Enforcement Directorate to register an ECIR only on the ground that the High Court felt that a primary offence had been committed.”

Effect of the Supreme Court’s decision

With this decision, the Supreme Court made it clear that the judiciary cannot interfere in the discretion of an investigating agency. The court gave the ED the liberty to decide independently whether it has to take action under the Prevention of Money Laundering Act, 2002 or not. Along with this, the court completely cancelled the order of the High Court on the basis on which the ECIR was registered. This decision of the Supreme Court is very important in terms of maintaining the rights and independence of the investigating agencies. It makes it clear that no court can force any agency to register a case. The Enforcement Directorate should have the right to independently initiate or not initiate an investigation under its procedure.

Disclaimer: This article is written to provide information only. No legal advice is claimed in it. In any legal matter, please seek expert advice.

Also Read:

Evolution and Scope of Administrative Law

1248 Laws of India: A Comprehensive Legal Landscape Unveiled 

Supreme Court Slams Overpriced Lawyers: Justice Must Be Accessible to All