N. Dhanraj Kochar Vs Director (Madras High Court)
Summary: The Madras High Court considered the maintainability of a petition filed under Section 482 of the Code of Criminal Procedure seeking quashing of ECIR No. CEZO-I/39/2021 dated 31.03.2021. The Enforcement Directorate had registered the ECIR after seven FIRs were registered by the Central Crime Branch, Chennai, against Dhanraj Kochar and others for offences under Sections 120-B and 420 IPC involving allegations of forgery, cheating and land grabbing. Since those FIRs disclosed commission of a scheduled offence under the Prevention of Money Laundering Act, 2002, the ED commenced investigation. The Registry raised a doubt about whether an ECIR could be challenged through the High Court’s inherent jurisdiction under Section 482 CrPC, and the matter was therefore placed for hearing on maintainability. The petitioners relied on Arun Kumar Mishra Vs. Directorate of Enforcement, 2015 SCC OnLine Del 8658, and Ajanta Merchants Pvt. Ltd. Vs. Directorate of Enforcement, 2015 SCC OnLine Del 8659, where petitions under Section 482 CrPC seeking quashing of ECIR proceedings had been entertained. The Madras High Court declined to rely on those decisions because they contained no discussion on the maintainability of such petitions. Referring to Section 482 CrPC and earlier precedent, the Court held that the inherent power is concerned with giving effect to orders under the Code, preventing abuse of the process of a court, or otherwise securing the ends of justice in the context of court proceedings. The Court emphasized that an ECIR is not registered under the CrPC and is not akin to an FIR registered under Section 154 CrPC. Relying on The Assistant Director, Directorate of Enforcement Vs. Justin Devadoss @ David and Others, it reiterated that an ECIR is an administrative form used by the Enforcement Directorate to commence investigation under the PMLA and has no independent adjudicatory significance. Registration of an ECIR is therefore an administrative act under a special statute and cannot be quashed through Section 482 CrPC. The Court also relied on K. Rajamanickam and Others Vs. State of Tamil Nadu, Inspector General and Another, State of W.B. and Others Vs. Sujit Kumar Rana, and State of Punjab Vs. Davinder Pal Singh Bhullar and Others regarding the scope of inherent jurisdiction. It concluded that registration of an ECIR by ED officers cannot be subjected to judicial review under Section 482 CrPC. The Registry’s objection was upheld and the petition was dismissed as not maintainable at the SR stage.
Cases Discussed
- Arun Kumar Mishra Vs. Directorate of Enforcement, 2015 SCC OnLine Del 8658 (Delhi High Court) — The petitioners relied on the decision; the Court declined to rely on it because it did not discuss maintainability of a Section 482 CrPC petition for quashing ECIR proceedings.
- Ajanta Merchants Pvt. Ltd. Vs. Directorate of Enforcement, 2015 SCC OnLine Del 8659 (Delhi High Court) — The petitioners relied on the decision; the Court declined to rely on it because it did not discuss the maintainability issue before the Court.
- The Assistant Director, Directorate of Enforcement Vs. Justin Devadoss @ David and Others, 2021-1-L.W.(Crl.) 605 (Madras High Court) — Relied upon for the nature of an ECIR as an administrative form used by ED to commence investigation and its distinction from an FIR under Section 154 CrPC.
- K. Rajamanickam and Others Vs. State of Tamil Nadu, Inspector General and Another, 2015 (3) MWN (Cr.) 379 (DB) (Madras High Court) — Relied upon on the scope of the High Court’s inherent powers under Section 482 CrPC.
- State of W.B. and Others Vs. Sujit Kumar Rana, (2004) 4 SCC 129 (Supreme Court) — Relied upon for the proposition that Section 482 power operates in relation to matters or proceedings before a criminal court.
- State of Punjab Vs. Davinder Pal Singh Bhullar and Others, (2011) 14 SCC 770 (Supreme Court) — Relied upon on the requirement that the relevant proceedings be pending in a subordinate court when inherent jurisdiction is invoked to secure the ends of justice.
FULL TEXT OF THE ORDER OF MADRAS HIGH COURT
It appears that seven FIRs were registered by the Central Crime Branch, Chennai, for the offences under Sections 120-B and 420 IPC against one Dhanraj Kochar and others, for forgery, cheating and land grabbing. Since the FIRs disclosed the commission of a ‘scheduled offence’ under the Prevention of Money Laundering Act, 2002 (in short “the PML Act”), the Enforcement Directorate registered a case in ECIR No. CEZO-I/39/2021 on 31.03.2021, for quashing which, Dhanraj Kochar and others have filed the present criminal original petition under Section 482 Cr.P.C.
2. Inasmuch as the Registry entertained a doubt about the very maintainability of the petition under Section 482 Cr.P.C., the matter was posted for hearing under the caption “for maintainability”.
3. Heard Mr. P. Ramesh Kumar, learned counsel for the petitioners and Mr. Rajnish Pathiyil, learned Special Public Prosecutor for the Enforcement Directorate.
4. Mr. Ramesh Kumar submitted that the impugned ECIR refers to the FIRs that were registered by the CCB and therefore, the present petition under Section 482 Cr.P.C. is maintainable. In support of his contention, he placed strong reliance on the judgments of the Delhi High Court in Arun Kumar Mishra Vs. Directorate of Enforcement (2015 SCC Online Del 8658) and Ajanta Merchants Pvt. Ltd. Vs. Directorate of Enforcement (2015 SCC Online Del 8659).
5. This Court perused the aforesaid two judgments, wherein, petitions under Section 482 Cr.P.C. have been entertained by a learned Single Judge of the Delhi High Court for quashing the ECIR proceedings, but, without any discussion on the very maintainability of those petitions for such quashment under Section 482 Cr.P.C. Therefore, we are not inclined to 4/10 place any reliance on the said two judgments, as they do not lay down any law on the issue at hand.
6. At the outset, useful reference could be made to Section 482 Cr.P.C. which reads as follows:
“482. Saving of inherent powers of High Court – Nothing in this Code shall be deemed to limit or affect the inherent powers of the High Court to make such orders as may be necessary to give effect to any order under this Code, or to prevent abuse of the process of any Court or otherwise to secure the ends of justice.”
A mere reading of the above provision shows that the High Court has been clothed with inherent powers to,
(a)make such orders as may be necessary to give effect to any order under this Code;
(b)to prevent abuse of the process of any Court;
(c)or otherwise to secure the ends of justice
The expression “or otherwise to secure the ends of justice” should be read ejusdem generis with (b) above.
7. It is to be borne in mind that an ECIR is not registered under the Code of Criminal Procedure and it is not akin to an FIR, which is registered under Section 154 Cr.P.C. and sent to the jurisdictional Magistrate in terms 5/10 of Section 157 Cr.P.C. The scope of an ECIR has been discussed by a Division Bench of this Court in which one of us (PNPJ) was a Member in The Assistant Director, Directorate of Enforcement Vs. Justin Devadoss @ David and Others [2021-1-L.W.(Crl.) 605], wherein, in paragraphs 13 and 17, it has been held as follows:
“13. The ECIR is an administrative form that is used by the Enforcement Directorate for commencing the investigation of a case. Be it noted that the E CIR form is not i n pari materia with the form that is used by the police to register an FIR under Section 154 Cr.P.C. read with the Rules framed for that purpose by the State Government.
17. An investigation under the PML Act gets triggered against a person only if he is found to have been involved in a ‘schedule offence’. Thus, when the police register a case against a person for a ‘schedule offence’ and when the Enforcement Directorate comes to know of it, they can commence investigation under the PML Act by formally recording in the ECIR form about the nature of the ‘schedule offence’, as disclosed in the FIR registered by the police. A person cannot be convicted or acquitted based on the entries in the ECIR form, because, an offence under the PML Act has to be proved by examining witnesses and proving documents in order to establish that the accused had involved himself in a criminal activity, acquired assets and had projected the proceeds of the crime as untainted property. In this scheme of things, the ECIR document really has no significance.”
(emphasis supplied)
Thus, registration of an ECIR is an administrative act that is done by the officers of the Enforcement Directorate, for initiation of an investigation under the PML Act, which is a special statute and therefore, the same cannot be quashed, in exercise of the powers under Section 482 Cr.P.C., because, 6/10 the registration of the ECIR is not under the Code.
8. Next, the scope of Section 482 Cr.P.C. has been succinctly laid down by a Division Bench of this Court way back in 1991 in K. Rajamanickam and Others Vs. State of Tamil Nadu, Inspector General and Another [2015 (3) MWN (Cr.) 379 (DB)],8 the relevant portion of which reads as under:
“5. The first part or the first clause, understood as above, conveys that the inherent power of the High Court can come into play when it is necessary to give effect to any order under the Code, if there is no express bar and if there is no other provision of the Act to ensure the implementation of the order. The second part or the clause will be available if in any proceeding of a Court, whether the High Court or a Court subordinate to it, any abuse of process is found or otherwise it is felt that to secure the ends of justice certain order of the High Court is necessary; it may act thus to prevent the abuse of process of any Court or otherwise to secure the ends of justice.”
9. This view has found favour with the judgment of the Supreme Court in State of W.B. and Others Vs. Sujit Kumar Rana [(2004) 4 SCC 129]. For better appreciation, the relevant paragraph from Sujit Kumar Rana (supra) is extracted hereunder:
“33. From a bare perusal of the aforementioned provision, it would be evident that the inherent power of the High Court is saved only in a case where an order has been passed by the criminal court which is required to be set aside 7/10 to secure the ends of justice or where the proceeding pending before a court amounts to abuse of the process of court. It is, therefore, evident that power under Section 482 of the Code can be exercised by the High Court in relation to a matter pending before a court; which in the context of the Code of Criminal Procedure would mean “a criminal court” or whence a power is exercised by the court under the Code of Criminal Procedure.”
10. Similarly, in State of Punjab Vs. Davinder Pal Singh Bhullar and Others [(2011) 14 SCC 770], the Supreme Court held as follows:
“63……. When reference is made to the phrase “to secure the ends of justice”, it is in fact in relation to the order passed by the subordinate court and it cannot be understood in a general connotation of the phrase. More so, while entertaining such application the proceedings should be pending in the subordinate court…….”
11. Thus, viewed from any angle, the registration of an ECIR by the officers of the Enforcement Directorate, cannot be a subject matter of judicial review under Section 482 Cr.P.C.
In the result, the objection raised by the Registry is upheld and this petition stands dismissed as not maintainable at the SR stage itself.
