The Kerala High Court has refused to quash the Enforcement Directorate’s investigation into Cochin Minerals and Rutile Limited, holding that the absence of a registered predicate offence does not prevent the agency from initiating civil action under the Prevention of Money Laundering Act. The Court said registration of a scheduled offence is required for criminal prosecution, but not for attachment proceedings or inquiry powers under the PMLA.
CMRL Appeal Dismissed By Division Bench
A Division Bench of Justices Raja Vijayaraghavan V and KV Jayakumar passed the order on an appeal filed by Cochin Minerals and Rutile Limited. The company had challenged a single-judge order that had refused to interfere with the ED’s investigation into its activities.
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The company argued that the ED could not proceed without registration of a predicate offence, which refers to an underlying scheduled criminal offence that allegedly generates proceeds of crime. The Court, however, rejected this argument and held that such registration is not necessary for civil action under the PMLA.
Court Draws Line Between Civil Action And Prosecution
The Bench said that non-registration of an FIR or non-filing of a complaint in relation to a scheduled offence would not bar the ED from initiating civil measures under the PMLA. It clarified that registration of a scheduled offence is a prerequisite only for penal prosecution under Section 3.
The Court held that the ED can still exercise powers relating to attachment under Section 5 and inquiry under Section 50 of the PMLA. It said civil action under the law operates separately from criminal prosecution and does not depend on the prior registration of a predicate offence.
ECIR Quashing Plea Also Rejected
CMRL had also sought quashing of the Enforcement Case Information Report. The Court declined that request, observing that an ECIR is not a statutory document.
The Bench further held that even the non-registration of an ECIR does not prevent the commencement of civil action under the PMLA. On this basis, the Court said the prayer to quash the ECIR could not be granted.
With these findings, the Kerala High Court dismissed CMRL’s appeal and allowed the ED investigation to continue.
