The Karnataka High Court has delivered a stern observation regarding the statutory powers of the Enforcement Directorate, asserting that the agency is not a super cop with unlimited authority to intervene in any matter. The court firmly stated that the financial probe agency cannot pursue a money laundering case based on a predicate offence when no other investigative agency or prosecution is willing to take the matter forward.
ECIR and Related Proceedings Quashed Against MLA
Justice M.I. Arun issued this significant ruling on Friday, quashing the Enforcement Case Information Report and all associated proceedings registered against Congress legislator K.Y. Nanjegowda and several others. The verdict came on a batch of five petitions filed in connection with an ED inquiry stemming from alleged irregularities in recruitment at the Kolar-Chikkaballapur Milk Union.
ED Powers Dependent on Primary Agency Actions
The High Court elaborated that the investigative authority of the ED under the Prevention of Money Laundering Act is not an independent or original right, but is strictly contingent upon an FIR or formal complaint registered by a primary investigating agency regarding a scheduled offence. According to Justice Arun, the agency cannot initiate an inquiry merely on the suspicion of money laundering without a foundational criminal case.
The bench observed that if the core predicate offence does not legally survive or if it is successfully closed in favor of the accused, the consequential money laundering proceedings cannot be sustained either. PMLA actions can only progress when a competent primary agency registers a formal complaint for a listed crime under the law.
Background of the Land Allocation Controversy
The central agency had commenced its inquiry on November 30, 2023, based on a land allotment dispute. The allegations claimed that while K.Y. Nanjegowda served as the chairman of the Malur Land Grant Committee, he had recommended the allocation of roughly 80 acres of land in favor of 38 individuals.
Following a private complaint, a case was registered under crime number 489/2022. However, the matter never progressed to a full trial stage as the police filed a closure report. Subsequently, due to the absence of mandatory government sanction, the trial court dismissed the prosecution in the absence of active proceedings.
Relief Granted to the Congress Legislator
The High Court noted in its judgment that this dismissal order had already attained finality. Consequently, when the proceedings concerning the primary crime failed to advance, the ED lacked the legal footing to continue its PMLA investigation on that same premise.
This judicial pronouncement grants substantial relief to Congress MLA K.Y. Nanjegowda and the other petitioners by setting aside the ECIR. The ruling clearly establishes the jurisdictional boundaries of the agency, reiterating that a valid legal foundation involving a scheduled predicate crime is an absolute prerequisite before any money laundering probe can be legally sustained.
