ED must only probe money laundering cases under PMLA: Delhi HC

New Delhi: The Enforcement Directorate (ED) only has the power to investigate offences coming under the Prevention of Money Laundering Act (PMLA), the Delhi High Court observed, adding that the central agency cannot assume that a predicate offence has been committed, PTI reported.

The court ruled that predicate offences must be investigated and tried by only those authorities empowered by the law.

The court said, "What needs to be emphasised is that the PMLA empowers the ED to investigate Section 3 offences only. Its power to investigate and enquire stands confined to the offence of money laundering as defined in that section. However, the same cannot be read as enabling it to assume from the material that it may gather in the course of that investigation that a predicate offence stands committed."

"The predicate offence has to be necessarily investigated and tried by the authorities empowered by law in that regard," Justice Yashwant Varma said in a 111-page judgement passed on January 24."

"The primary function to investigate and try such offences remains and vests in authorities constituted under those independent statutes...In any case, it (ED) cannot and on its own motion proceed on the surmise that a particular set of facts evidence the commission of a scheduled offence and, based on that opinion, initiate action under the PMLA," the court noted.

During a probe, if the ED come to a conclusion that the material in its possession is evidence of an offence, the agency must transfer the information to the authorities concerned for requited action, the court ruled.

The high court's verdict came while allowing two separate petitions filed by Prakash Industries Limited and Prakash Thermal Power Limited challenging the Provisional Attachment Orders (PAO) issued by the ED on November 29, 2018.