ED to not take up PMLA cases just on basis of ‘criminal conspiracy’ angle alone

The Enforcement Directorate has asked officials to not rely just on the provision of “criminal conspiracy” while registering a money laundering case, but also add more sections such 66(2) of the PMLA to ensure they stand the court scrutiny, official sources said Monday. The directions come after multiple recent court rulings, including by the Supreme Court, stated that section 120-B of the IPC (now 61(2) of the Bharatiya Nyaya Sanhita, 2023) cannot be a standalone “predicate offence” for registering a criminal case under the Prevention of Money Laundering Act, and that a “scheduled offence” under the PMLA should accompany its application.

In light of these judgements, the federal agency has also asked its investigators to effectively put to use provisions of the the section 66(2) of the PMLA which allows the ED to share information about an offence with a predicate agency like the police department or Customs to file a fresh FIR or complaint, on the basis of which the agency can file its money laundering case.

The courts have ruled that Section 120-B of the IPC alone is not enough to register a money laundering case and launch 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 that are listed in the schedule of the PMLA should be applied in the ED ECIR (FIR).

Money laundering cases of the ED 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.