Cochin Minerals And Rutile Limited Vs Directorate of Enforcement (Kerala High Court)
The Kerala High Court dismissed an appeal challenging the validity of an Enforcement Case Information Report (ECIR) and summons issued by the Directorate of Enforcement (ED) under the Prevention of Money Laundering Act, 2002 (PMLA). The case arose after the ED initiated proceedings against a public limited company and certain employees. The appellants contended that the ECIR and subsequent summons were without jurisdiction because no crime, FIR, or complaint relating to a scheduled offence had been registered by a competent authority at the time the ECIR was recorded and summons were issued. They also argued that immunity granted under settlement proceedings under the Income Tax Act barred further proceedings based on the same facts.
The Court examined the legal status of an ECIR in light of the Supreme Court’s decision in Vijay Madanlal Choudhary v. Union of India. It noted that the Supreme Court had clearly distinguished an ECIR from an FIR. Unlike an FIR under the Code of Criminal Procedure, an ECIR is not a statutory document and there is no provision in the PMLA requiring its registration or supply to the person concerned. The Supreme Court had held that an ECIR is merely an internal document maintained by the ED and that even the absence of an ECIR does not prevent the ED from commencing inquiry or investigation under the Act. Accordingly, the High Court held that a prayer seeking quashing of an ECIR is misconceived and cannot be granted.
