MR.Y. B. ASHWATHANARAYAN vs UNION OF INDIA
- Court
- Karnataka High Court
- 1 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
IN THE HIGH COURT OF KARNATAKA AT BENGALURU
TH
DATED THIS THE 6 DAY OF NOVEMBER, 2026
®
BEFORE
THE HON'BLE MR. JUSTICE M.I.ARUN
WRIT PETITION NO. 18821 OF 2024 (GM-RES)
C/W
WRIT PETITION NO. 8914 OF 2024 (GM-RES)
WRIT PETITION NO. 4630 OF 2025 (GM-RES)
WRIT PETITION NO. 5168 OF 2025 (GM-RES)
WRIT PETITION NO. 22460 OF 2025 (GM-RES)
IN W.P. NO.18821 OF 2024:
BETWEEN:
MR. Y.B. ASHWATHANARAYAN,
AGED 53 YEARS,
S/O LATE BYRAREDDY,
RESIDING AT: OLLAVADI VILLAGE AND PO.
KASABA HOBLI, CHINTHAMANI,
CHIKKABALAPUR DT.
KARNATAKA-563125. … PETITIONER
(BY SRI. KIRAN S. JAVALI, SENIOR ADVOCATE FOR SRI. MAHENDRA
GOUDA C.R. AND SRI. MAYANK JAIN, ADVOCATES)
AND:
1. UNION OF INDIA,
THROUGH THE DEPUTY DIRECTOR,
DIRECTORATE OF ENFORCEMENT,
BENGALURU,
RD
3 FLOOR, B BLOCK, BMTC BUILDING,
SHANTINAGAR, TTMC, K.H. ROAD,
BENGALURU-560027.
Digitally
signed by K M
SOMASHEKAR
Location:
HIGH COURT
OF
KARNATAKA
K M
SOMASHEKAR
2. THE REGISTRAR,
ADJUDICATING AUTHORITY (PMLA),
TH
ROOM NO. 26, 4 FLOOR,
JEEVAN DEEP BUILDING,
- 2 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
PARLIAMENT STREET,
NEW DELHI-110001.
… RESPONDENTS
(BY SRI. S.V. RAJU, ASG A/W SMT. ANUPARNA BORDOLOI,
ADVOCATE FOR R1 AND R2)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF
CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR
DIRECTION AND QUASH THE ORDER DATED 06/06/2024 PASSED BY
ND
THE 2 RESPONDENT, THE ADJUDICATING AUTHORITY UNDER THE
PMLA, 2002 PASSED IN O.A.1132/2024 PRODUCED AS ANNEXURE-A.
IN SO FAR AS THE PETITIONER IS CONCERNED; ISSUE A WRIT OF
MANDAMUS OR ANY OTHER APPROPRIATE WRIT, ORDER OR
DIRECTION, DIRECTING THE RESPONDENT TO RETURN BACK ALL
THE ARTICLES SEIZED FROM THE PETITIONERS. IN SO FAR AS THE
PETITIONER IS CONCERNED; PASS ANY ORDER OR DIRECTIONS AS
THIS HON’BLE COURT DEEMS FIT IN THE CIRCUMSTANCES OF THE
CASE.
IN W.P. NO.22460 OF 2025:
BETWEEN:
DR. RAJU KRISHNA C.
S/O MR. KRISHNA C.,
AGED ABOUT 55 YEARS,
QUARTERS NO.A-2,
MANGALORE UNIVERSITY CAMPUS,
MANGALA GANGOTHRI,
MANGALORE-574199.
… PETITIONER
(BY SRI. THAMMAIAH H.N., ADVOCATE)
AND:
1. THE UNION OF INDIA,
THORUGH THE DIRECTOR,
DIRECTORATE OF ENFORCEMENT,
RD
BENGALURU, 3 FLOOR,
B-BLOCK, BMTC BUILDING,
SHATINAGAR, TTMC,
K.H. ROAD, BENGALURU-560027.
- 3 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
2. THE KARNATAKA LOKAYUKTA POLICE,
KOLAR DT.-563131. … RESPONDENTS
(BY SRI. S.V. RAJU A/W SMT. ANUPARNA BORDOLOI, ADVOCATES
FOR R1;
SRI. B.S. PRASAD, ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH AND SET
ST
ASIDE THE ACTIONS OF 1 RESPONDENT IN FILING/SUBMITTING
PRIVATE COMPLAINT REPORT UNDER SECTION 200 OF THE CODE OF
CRIMINAL PROCEDURE VIDE ANNEXURE-A DATED 11.09.2024 PCR
NO.32/2024 PENDING BEFORE THE ADDL. CITY CIVIL AND SESSIONS
JUDGE, BENGALURU (CCH.82) PETITIONER CONCERN ONLY; QUASH
AND SET ASIDE THE ORDER DATED 30.10.2024 IN PCR NO.32/2024
PENDING BEFORE THE ADDL. CITY CIVIL AND SESSIONS JUDGE,
BENGALURU (CCH.82) AT ANNEXURE-B TAKING COGNIZANCE OF THE
COMPLAINT AND CALLING FOR STATUS REPORT; QUASH AND SET
ASIDE ECIR IN BGZO/41/2023 DATED 30.11.2023 REGISTERED BY
ST
THE 1 RESPONDENT OF WHICH THE CERTIFIED COPY OF SUMMONS
DATED 19.01.2024 IS PRODUCED AT ANNEXURE-E; GRANT SUCH
OTHER RELIEF OR RELIEFS AS THIS HON’BLE COURT DEEMS FIT
CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, IN
ORDER TO MEET THE ENDS OF JUSTICE.
IN W.P. NO.8914 OF 2024:
BETWEEN:
MR. Y.B. ASHWATHANARAYAN,
AGED 53 YEARS,
S/O LATE BYRAREDDY,
RESIDING AT: OLLAVADI VILLAGE AND PO.
KASABA HOBLI, CHINTHAMANI,
CHIKKABALAPUR DT., KARNATAKA-563125.
… PETITIONER
(BY SRI. KIRAN S. JAVALI, SENIOR ADVOCATE FOR SRI. MAHENDRA
GOUDA C.R. AND SRI. MAYANK JAIN, ADVOCATES)
AND:
1. UNION OF INDIA,
THROUGH THE DEPUTY DIRECTOR,
DIRECTORATE OF ENFORCEMENT,
- 4 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
BENGALURU,
RD
3 FLOOR, B BLOCK, BMTC BUILDING,
SHANTINAGAR, TTMC, K.H. ROAD,
BENGALURU-560027.
2. THE REGISTRAR,
ADJUDICATING AUTHORITY (PMLA),
TH
ROOM NO. 26, 4 FLOOR,
JEEVAN DEEP BUILDING,
PARLIAMENT STREET,
NEW DELHI-110001. … RESPONDENTS
(BY SRI. S.V. RAJU, ASG A/W SMT. ANUPARNA BORDOLOI,
ADVOCATE FOR R1 AND R2)
THIS WRIT PETITION IS FILED UNDER ARTICLE 226 OF THE
CONSTITUTION OF INDIA, PRAYING TO ISSUE A WRIT OF
CERTIORARI OR ANY OTHER APPROPRIATE WRIT, ORDER OR
DIRECTION AND QUASH THE ECIR NO.BGZO/41/2023/2849
REGISTERED ON 30-11-2023 AND THE SUMMONS OF WHICH IS
DATED 16.01.2024 PRODUCED AS ANNEXURE-A AND ALL
CONSEQUENTIAL ACTIONS INCLUDING THE SHOW-CAUSE NOTICE
ISSUED IN NO.O.A.1132/24 DATED 16.02.24 AT ANNEXURE-H
ISSUED BY THE RESPONDENT NO.2, AS ILLEGAL AND ABINITIO
VOID; ISSUE A WRIT OF MANDAMUS OR ANY OTHER APPROPRIATE
WRIT, ORDER OR DIRECTION, DIRECTING THE RESPONDENT TO
FOREBEAR THE RESPONDENTS FROM INITIATING ANY ACTION
UNDER THE PROVISION OF THE PML ACT; PASS ANY ORDER OR
DIRECTIONS AS THIS HON’BLE COURT DEEMS FIT IN THE
CIRCUMSTANCES OF THE CASE.
IN W.P. NO.4630 OF 2025:
BETWEEN:
SRI. K.Y. NANJE GOWDA,
AGED ABOUT 56 YEARS,
S/O. LATE. YALLE GOWDA,
KOMMANAHALLI VILLAGE,
TEKAL HOBLI, MALUR TQ.,
KOLAR DT.-563137. … PETITIONER
(BY SRI. KIRAN S. JAVALI, SENIOR ADVOCATE FOR SRI. MAHENDRA
GOUDA C.R. AND SRI. MAYANK JAIN, ADVOCATES)
- 5 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
AND:
1. THE UNION OF INDIA,
THROUGH THE DIRECTOR,
DIRECTORATE OF ENFORCEMENT,
RD
BENGALURU, 3 FLOOR,
B-BLOCK, BMTC BUILDING,
SHANTINAGAR, TTMC, K.H. ROAD,
BENGALURU-560027.
2. THE KARNATAKA LOKAYUKTA POLICE,
KOLAR DT.-563137
… RESPONDENTS
(BY SRI. S.V. RAJU, ASG A/W SMT. ANUPARNA BORDOLOI,
ADVOCATE FOR R1;
SRI. B.S. PRASAD, ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
OF THE CONSTITUTION OF INDIA, PRAYING TO QUASH AND SET
ST
ASIDE THE ACTIONS OF 1 RESPONDENT IN FILING/SUBMITTING
PRIVATE COMPLAINT REPORT UNDER SECTION 200 OF THE CODE OF
CRIMINAL PROCEDURE VIDE ANNEXURE-A DATED 11.09.2024
INSOFAR AS THE PETITIONER IS CONCERNED; TO GRANT SUCH
OTHER RELIEF OR RELIEFS AS THIS HON’BLE COURT DEEMS FIT
CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, IN
ORDER TO MEET THE ENDS OF JUSTICE.
IN W.P. NO.5168 OF 2025:
BETWEEN:
1. MR. K.N. GOPALA MURTHY
S/O NARAYANAPPA K.,
AGED ABOUT 58 YEARS,
MANAGING DIRECTOR KOLAR MILK UNION LTD.,
RESIDING AT ‘HOMBELAKU’
RD
NO.34/G, 3 CROSS, THIRUMALA NAGAR,
ND
ATTUR 2 STAGE, YELAHANKA,
BANGALORE -64.
2. MR. NAGESH N, S/O NAGAPPA N.,
AGED ABOUT 44 YEARS,
TH ND
NO.51, 5 CROSS, 2 RIGHT,
- 6 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
JAI BHUVANESHWARI LAYOUT,
H.V. RESIDENCE,
KRISNARAJAPURAM, BANGALORE- 49.
… PETITIONERS
(BY SRI. KIRAN S. JAVALI, SENIOR ADVOCATE FOR SRI. MAHENDRA
GOUDA C.R. AND SRI. MAYANK JAIN, ADVOCATES)
AND:
1. ASSISTANT DIRECTOR,
DIRECTORATE OF ENFORCEMENT,
RD
3 FLOOR, B BLOCK, BMTC BUILDING,
SHANTINAGAR, TTMC, K.H. ROAD,
BENGALURU-560027.
2. SUPERINTENDENT OF POLICE
LOKAYUKTA POLICE,
KOLAR-563101.
… RESPONDENTS
(BY SRI. S.V. RAJU, ASG A/W SMT. ANUPARNA BORDOLOI,
ADVOCATE FOR R1;
SRI. B.S. PRASAD, ADVOCATE FOR R2)
THIS WRIT PETITION IS FILED UNDER ARTICLES 226 AND 227
R/W SECTION 482 OF CODE OF CRIMINAL PROCEDURE, PRAYING TO
SET ASIDE THE ORDER 30.10.2024 DATED PCR NO.32/2024 AT
ANNEXURE-A, INCLUDING IN THE COMPLAINT IN PCR NO.32/2024
ON THE FILE OF THE LXXXI ADDL. CITY CIVIL AND SESSIONS JUDGE
(SPECIAL COURT EXCLUSIVELY TO DEAL WITH CRIMINAL CASES
RELATED TO ELECTED MPS AND MLAS IN THE STATE OF
KARNATAKA) CCH.82, BANGALORE AT ANNEXURE-B; PASS ANY
OTHER ORDER OF DIRECTIONS AS THIS HON’BLE COURT DEEMS
FIT, IN THE INTEREST OF JUSTICE.
THESE PETITIONS HAVING BEEN HEARD AND RESERVED FOR
ORDERS ON 17.10.2026 AND COMING ON FOR PRONOUNCEMENT OF
ORDERS THROUGH PHYSICAL HEARING/VIDEO CONFERENCING,
THIS DAY, THE COURT MADE THE FOLLOWING:
CORAM: HON'BLE MR. JUSTICE M.I.ARUN
- 7 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
CAV ORDER
One Sri K.Y. Nanje Gowda, the petitioner in W.P.
No.4630/2025, was the Chairman of the Land Grant
Committee of Malur, Kolar District. There was an
allegation made against him that he, in collusion with
other Members of the Land Grant Committee,
recommended grant of land measuring about 80 acres for
about 38 persons and that the same was done by abusing
their official position, in an illegal manner (hereinafter
referred to as ‘Land Scam Case’). It culminated in filing of
a private complaint by one Sri K.C.Rajanna bearing PCR
No.15366/2022 before the Chief Metropolitan Magistrate,
Bangalore alleging commission of offences under Sections
468, 464, 465, 471, 420 and 120B of the Indian Penal
Code, 1860. Based on the aforementioned complaint,
Crime No.489/2022 came to be registered. Thereafter, the
said K.Y.Nanje Gowda was appointed as Chairman of Kolar
and Chikkaballapur Milk Union Ltd. (hereinafter referred to
as ‘KOMUL’).
- 8 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
2. Based on the allegations in the Land Scam
Case, treating the same as a predicate offence, the
Enforcement Directorate (hereinafter referred to as ‘ED’)
took up the matter for investigation and registered it as
ECIR/BGZO/41/2023. In the process of investigation a
search was conducted on the premises of several persons.
While conducting the search, the ED came across certain
materials, which, in its opinion, amounted to a scam
pertaining to recruitments of employees to KOMUL
(hereinafter referred to as ‘Job Scam Case’).
3. Based on the alleged incriminating material
pertaining to the Job Scam Case, summons were issued to
one Sri Y.B.Ashwathanarayan. Aggrieved by the same, the
said Sri Y.B.Ashwathanarayan has preferred W.P.
No.8914/2024 with the following prayers:
“(a) Issue a writ of certiorari or any other
appropriate writ, order or direction and quash
the ECIR NO.BGZO/41/2023/2849 registered on
30-11-2023 and the summons of which is dated
16.01.2024 produced as Annexure-A and all
- 9 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
consequential actions including the show-cause
notice issued in No.O.A.1132/24 dated 16.02.24
at Annexure-H issued by the respondent no.2,
as illegal and ab initio void;
(b) Issue a writ of mandamus or any other
appropriate writ, order or direction, directing the
respondent to forebear the respondents from
initiating any action under the provision of the
PML Act;
(c) Pass any order or directions as this Hon’ble court
deems fit in the circumstances of the case.”
4. Thereafter, the ED filed O.A. No.1132/2024
under Section 17(4) of the Prevention of Money-
Laundering Act, 2002 (hereinafter referred to as ‘PMLA’)
before the Adjudicating Authority. The Adjudicating
Authority has issued a show-cause notice in this regard to
the concerned persons. Thereafter, the ED shared the
information about the Job Scam Case with the
jurisdictional police/authority, as contemplated under
Section 66(2) of the PMLA.
- 10 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
5. However, a closure report was filed in Crime
No.489/2022 (Land Scam Case) which was pending on the
file of the jurisdictional Trial Court. In reply, the
complainant therein filed a protest petition against the
closure report. However, as the allegations were made
against a public servant and it required government
sanction for continuation of the Land Scam Case before
the Trial Court and as the same was not obtained, the Trial
Court dismissed the said case for non-prosecution.
6. In the meanwhile, the said
Sri Y.B.Ashwathanarayan issued a reply to the show-cause
notice issued by the Adjudicating Authority. However, the
Adjudicating Authority confirmed the seizure in O.A.
No.1132/2024 on 06.06.2024. Aggrieved by the same, the
said order has been impugned by Sri
Y.B.Ashwathanarayan by filing another writ petition
(W.P. No.18821/2024) with the following prayers:
”(a) Issue a writ of certiorari or any other
appropriate writ, order or direction and quash
- 11 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
nd
the order dated 06.06.2024 passed by the 2
respondent, the adjudicating authority under the
PMLA, 2002 passed in O.A.1132/2024 produced
as Annexure-A in so far as the petitioner is
concerned.
(b) Issue a writ of mandamus or any other
appropriate writ, order or direction, directing the
respondent to return back all the articles seized
from the petitioners in so far as the petitioner is
concerned.
(c) Pass any order or directions as this Hon’ble court
deems fit in the circumstances of the case.”
7. However, the jurisdictional police/authority did
not deem it fit to act upon the information shared by the
ED under Section 66(2) of PMLA, in respect of the Job
Scam Case. Hence, the ED itself filed PCR No.32/2024
before the Trial Court to have the case referred to
Lokayukta Police for investigation alleging offences under
Sections 7, 11, 12 and 13 of the Prevention of Corruption
Act, 1988 and Sections 120B, 420, 464, 465, 468, 471 of
IPC.
- 12 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
8. Aggrieved by the actions of the ED, Sri.
K.Y.Nanje Gowda has preferred W.P. No.4630/2025 with
the following prayers:
st
“a. To quash and set aside the actions of 1
Respondent in filing/submitting private
complaint report under section 200 of the
code of criminal procedure vide Annexure-A
dated 11.09.2024 insofar as the petitioner is
concerned.
b. To grant such other relief or reliefs as this
Hon’ble Court deems fit considering the facts
and circumstances of the case, in order to
meet the ends of justice.”
9. One Sri K.N.Gopala Murthy and one Sri Nagesh
N., have preferred W.P. No.5168/2025 with the following
prayers:
“(a) Set aside the Order dated 30.10.2024 in
PCR No.32/2024 at Annexure-A, including
the Complaint in PCR No.32/2024 on the file
of the LXXXI Addl. City Civil and Sessions
Judge (Special Court Exclusively to deal
- 13 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
with criminal Cases related to elected MPs
and MLAs in the State of Karnataka)
CCH.82, Bangalore at Annexure-B.
(b) Pass any other order or directions as this
Hon’ble Court deems fit, in the interest of
justice.”
10. One Dr.Raju Krishna C., has preferred W.P.
No.22460/2025 with the following prayers:
st
“a. To quash and set aside the actions of 1
Respondent in filing/submitting private
complaint report under section 200 of the code
of criminal procedure vide Annexure-A dated
11.09.2024 PCR No.32/2024 pending before the
Addl. City Civil and Sessions Judge, Bangalore-
(CCH.82) petitioner concern only.
b. To quash and set aside the order dated
30.10.2024 in PCR No.32/24 pending on Hon’ble
Addl. City Civil & Sessions Judge, B’lore-
(CCH.82) at Annexure-B taking cognizance of
the complaint and calling for status report.
c. To quash and set aside ECIR in BGZO/41/2023
st
dated 30.11.2023 registered by the 1
Respondent of which the Certified copy of
- 14 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
Summons dated 19.01.2024 is produced at
Annexure-E.
d. To grant such other relief or reliefs as this Hon’ble
Court deems fit considering the facts and
circumstances of the case, in order to meet the
ends of justice.”
11. In the aforementioned writ petitions, the
petitioners have challenged the actions of the ED in
continuing the investigation, in respect of the Land Scam
Case, even after the predicate offence being dismissed for
non-prosecution and also the action of the ED in filing a
private complaint, all by itself, against the petitioners in
the Job Scam Case, when the concerned police/authority
did not initiate any action based upon the information
received under Section 66(2) of the PMLA.
12. The case of the petitioners is that once a
predicate offence is closed, either on merits or on technical
grounds, the ED cannot continue investigation under the
provisions of PMLA and when ED, while investigation into
- 15 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
proceeds of crime under one offence, comes across any
material which in its opinion, amounts to commission of an
altogether different scheduled offence (predicate offence),
the ED is only empowered to share the information with
the relevant police/authority and it is not empowered to
present a private complaint and take up the matter for
investigation alleging that the accused therein are
benefitted by the proceeds of crime.
13. The case of the ED is that once the
investigation is taken up based on the existence of a
predicate offence and the same gets closed on technical
grounds and not on merits, still the ED is empowered to
investigate into the offence of money laundering under the
provisions of PMLA. It is also contended that when the
concerned authority does not act upon the information
received under Section 66(2) of the PMLA, then in that
event, as any person is empowered to set into motion the
criminal proceedings, the ED is empowered to maintain a
- 16 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
private complaint under Section 200 of the Code of
Criminal Procedure, 1973/Section 223 of the Bharatiya
Nagarik Suraksha Sanhita, 2023. On the said grounds, it is
prayed that the writ petitions be dismissed.
14. The questions that arise under the instant
petitions are:
(i) Can the Enforcement Directorate continue
investigation into proceeds of crime under the
provisions of the PMLA when the predicate
offence is closed on technical ground such as
for want of sanction from the concerned
authority?
(ii) When the Enforcement Directorate, based on
the material in its possession, is of the opinion
that some other law in force is contravened,
shares the information with the concerned
agency for necessary action as per Section
66(2) of the PMLA and the said agency fails to
initiate any prosecution against the accused,
then in that event, can the Enforcement
Directorate prefer a complaint under Section
200 Cr.P.C./223 of Bharatiya Nagarik Suraksha
- 17 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
Sanhita, 2023 before the jurisdictional
Magistrate and based on the said complaint
can it initiate proceedings under the PMLA?
15. Section 3 of PMLA reads as under:
“ 3. Offence of money-laundering. —
Whosoever directly or indirectly attempts to indulge
or knowingly assists or knowingly is a party or is
actually involved in any process or activity
connected with the proceeds of crime including its
concealment, possession, acquisition or use and
projecting or claiming it as untainted property shall
be guilty of offence of money-laundering.
Explanation.—For the removal of doubts, it is
hereby clarified that,—
(i) a person shall be guilty of offence of money-
laundering if such person is found to have
directly or indirectly attempted to indulge or
knowingly assisted or knowingly is a party or is
actually involved in one or more of the following
processes or activities connected with proceeds
of crime, namely:—
(a) concealment; or
(b) possession; or
(c) acquisition; or
(d) use; or
(e) projecting as untainted property; or
(f) claiming as untainted property, in any
manner whatsoever;
- 18 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
(ii) the process or activity connected with proceeds
of crime is a continuing activity and continues
till such time a person is directly or indirectly
enjoying the proceeds of crime by its
concealment or possession or acquisition or
use or projecting it as untainted property or
claiming it as untainted property in any
manner whatsoever.”
16. Section 2(1)(u) of PMLA defines ‘proceeds of
crime’ which reads as under:
“(u) “proceeds of crime” means any property
derived or obtained, directly or indirectly, by any
person as a result of criminal activity relating to a
scheduled offence or the value of any such property
or where such property is taken or held outside the
country, then the property equivalent in value held
within the country or abroad;
Explanation.—For the removal of doubts, it is
hereby clarified that "proceeds of crime" include
property not only derived or obtained from the
scheduled offence but also any property which may
directly or indirectly be derived or obtained as a
result of any criminal activity relatable to the
scheduled offence;”
17. Thus, for an investigation or an inquiry to be
made as to the existence of ‘proceeds of crime’ or
- 19 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
laundering of the money obtained through proceeds of
crime can be made only if there is pre-existence of a
predicate offence and not otherwise. The Apex Court in
Vijay Madanlal Choudhary and Others Vs. Union of India
1
and Others , in paragraphs 148, 149 and 152, has held as
under:
“ 148. The next question is: Whether the
offence under Section 3 is a stand-alone offence?
Indeed, it is dependent on the wrongful and illegal
gain of property as a result of criminal activity
relating to a scheduled offence. Nevertheless, it is
concerning the process or activity connected with
such property, which constitutes offence of money
laundering. The property must qualify the definition
of “proceeds of crime” under Section 2(1)(u) of the
2002 Act.
149. As observed earlier, all or whole of the
crime property linked to scheduled offence need not
be regarded as proceeds of crime, but all properties
qualifying the definition of “proceeds of crime” under
Section 2(1)(u) will necessarily be crime properties.
Indeed, in the event of acquittal of the person
1
(2023) 12 SCC 1
- 20 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
concerned or being absolved from allegation of
criminal activity relating to scheduled offence, and if
it is established in the court of law that the crime
property in the case concerned has been rightfully
owned and possessed by him, such a property by no
stretch of imagination can be termed as crime
property and ex consequenti proceeds of crime
within the meaning of Section 2(1)(u) as it stands
today. On the other hand, in the trial in connection
with the scheduled offence, the court would be
obliged to direct return of such property as belonging
to him. It would be then paradoxical to still regard
such property as proceeds of crime despite such
adjudication by a court of competent jurisdiction. It
is well within the jurisdiction of the court concerned
trying the scheduled offence to pronounce on that
matter.
152. Even though the 2002 Act is a complete
code in itself, it is only in respect of matters
connected with offence of money laundering, and for
that, existence of proceeds of crime within the
meaning of Section 2(1)(u) PMLA is quintessential.
Absent existence of proceeds of crime, as aforesaid,
the authorities under the 2002 Act cannot step in or
initiate any prosecution.”
- 21 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
18. Further, the Apex Court in V. Senthil Balaji Vs.
2
Deputy Director, Directorate of Enforcement , in
paragraph 21 has held as under:
“21. Hence, the existence of a scheduled
offence is sine qua non for alleging the existence of
proceeds of crime. A property derived or obtained,
directly or indirectly, by a person as a result of the
criminal activity relating to a scheduled offence
constitutes proceeds of crime. The existence of
proceeds of crime at the time of the trial of the
offence under Section 3 of PMLA can be proved only
if the scheduled offence is established in the
prosecution of the scheduled offence. Therefore,
even if the trial of the case under the PMLA
proceeds, it cannot be finally decided unless the
trial of scheduled offences concludes. In the facts of
the case, there is no possibility of the trial of the
scheduled offences commencing in the near future.
Therefore, we see no possibility of both trials
concluding within a few years.”
19. Thus, the role of ED under PMLA commences
only after a primary law enforcement agency registers a
2
2024 SCC OnLine SC 2626
- 22 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
FIR or a formal criminal complaint regarding
scheduled/predicate offence. The power of the ED is
derivative and not original. It cannot initiate an
investigation suo motu based on a standalone suspicion of
money laundering. If there is no existence of the predicate
offence, then in that event, proceedings under PMLA
cannot exist; meaning even when the predicate offence is
terminated in favour of the accused therein, the
proceedings under PMLA cannot continue.
20. In the instant case, admittedly, the private
complaint filed in respect of the Land Scam Case has been
closed for want of sanction from the competent authority.
It has reached finality. Under the circumstances, the
question of any person being convicted for the said
offences does not arise. Thus, under the given facts and
circumstances of the case, the action of the ED continuing
the investigation or inquiry into existence of proceeds of
- 23 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
crime derived from the scheduled offences alleged in the
Land Scam Case cannot be sustained.
21. In respect of the ED preferring a private
complaint under Section 200 Cr.P.C/223 BNSS, when the
concerned authorities did not act on the information
provided by the ED under Section 66(2) of the PMLA and
on the strength of the same, it has to be held that the ED
is not empowered to do so for the following reasons:
(i) A perusal of Section 66(2) of PMLA points out that if,
during the course of investigation, the ED comes across
violations of other provisions of law, it is duty bound to
intimate the concerned agency and not take up the
investigation by itself. In law, where an act is to be
done in a particular way, it must be done in that way
and in no other way. Our Constitution envisages
separation of powers between different organs of
government. The reason being that one institution in
the country does not become supreme so that it is in a
- 24 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
position to abuse the powers conferred on it. Law
recognizes the requirements of checks and balances.
The ED is not a super cop to investigate anything and
everything which comes into its notice. Section 48 of
the PMLA envisages the authorities under the Act. Once
appointed under the PMLA, they are bound by the
restraints imposed on them by the PMLA. Section 66(2)
of PMLA envisages that if the ED is of the opinion that
it is having certain materials which constitute a
scheduled offence, then in that event, the same should
be forwarded to the concerned agency. The Act does
not expressly empower the ED or the authorities under
the PMLA to prefer a private complaint in respect of a
scheduled offence and on the strength of it, thereafter,
take up investigation against the accused therein under
the provisions of PMLA. In fact, maintaining law and
order is the responsibility of the State and not
the Centre. It is the duty of the concerned
agency to examine the same and to take a
- 25 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
decision whether to prosecute the matter further or
not. The ED is not like any other person to file a
complaint under Section 200 Cr.P.C./223 of BNSS. It
has to exercise only those powers expressly conferred
on it by the PMLA. Filing of a private complaint by the
ED is not contemplated under the PMLA. Allowing the
ED to prefer a private complaint, when the other
government authorities deem it inappropriate to initiate
any proceedings against anybody, will amount to
permitting the ED to act as a super cop and it goes
against the philosophy of the Act which requires a
predicate offence to be in existence for the ED to
initiate proceedings as contemplated under the PMLA.
If the ED is permitted to file a private complaint, it will
be in a position to file a private complaint against any
person by itself and take up investigation against
them. This is not contemplated under the provisions of
the PMLA. In paragraphs 151 and 211 of Vijay
- 26 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
Madanlal Choudhary (supra), the Apex Court has held
as under:
“151. It is possible that in a given case
after the discovery of huge volume of
undisclosed property, the authorised officer
may be advised to send information to the
jurisdictional police [under Section 66(2) of the
2002 Act] for registration of a scheduled
offence contemporaneously, including for
further investigation in a pending case, if any.
On receipt of such information, the
jurisdictional police would be obliged to register
the case by way of FIR if it is a cognizable
offence or as a non-cognizable offence (NC
case), as the case may be. If the offence so
reported is a scheduled offence, only in that
eventuality, the property recovered by the
authorised officer would partake the colour of
proceeds of crime under Section 2(1)(u) of the
2002 Act, enabling him to take further action
under the Act in that regard.
211. This argument clearly overlooks the
overall scheme of the 2002 Act. As noticed
earlier, it is a comprehensive legislation, not
limited to provide for prosecution of person
involved in the offence of money laundering,
- 27 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
but mainly intended to prevent money
laundering activity and confiscate the proceeds
of crime involved in money laundering. It also
provides for prosecuting the person involved in
such activity constituting offence of money
laundering. In other words, this legislation is an
amalgam of different facets including setting up
of agencies and mechanisms for coordinating
measures for combating money laundering.
Chapter III is a provision to effectuate these
purposes and objectives by attachment,
adjudication and confiscation. The adjudication
is done by the adjudicating authority to confirm
the order of provisional attachment in respect
of proceeds of crime involved in money
laundering. For accomplishing that objective,
the authorities appointed under Chapter VIII
have been authorised to make inquiry into all
matters by way of survey, searches and
seizures of records and property. These
provisions in no way invest power in the
authorities referred to in Chapter VIII of the
2002 Act to maintain law and order or for that
matter, purely investigating into a criminal
offence.”
- 28 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
The decision of the Apex Court in Mukesh Singh Vs.
3
State (Narcotic Branch of Delhi) is not applicable to
the present case as the same pertains to the NDPS Act
and not the PMLA.
(ii) Examining the instant case itself, the jurisdictional
police have filed a ‘B’ Report in the Land Scam Case.
Thereafter, the sanctioning authority has not issued
necessary sanction to prosecute the alleged accused
therein. If we were to accept the contention of the ED
in the instant case, it would amount to concluding that
the jurisdictional police and the sanctioning authority
are guilty of dereliction of their respective duties and
the ED alone is correct. Similarly, in Job Scam Case, it
amounts to presuming the Lokayukta Police/agency,
who have not proceeded against the accused by not
initiating any criminal proceedings based on the
information provided by the ED, are guilty of
dereliction of their respective duties and putting the ED
3
(2020)10 SCC 120
- 29 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
on a higher pedestal, which is not contemplated in law.
The scheme of the PMLA envisages that prosecution
regarding the predicate offence has to be initiated by
the respective prosecuting agency/third party, but not
ED or Authorities constituted under the PMLA.
22. For the aforementioned reasons, the petitions
deserve to be allowed. Hence, the following:
ORDER
(i) All the petitions are allowed.
(ii) The impugned order dated 06.06.2024
passed by respondent No.2-Adjudicating
Authority in O.A. No.1132/2024, insofar as it
relates to the petitioner in W.P.
No.18821/2024, is hereby quashed.
(iii) The respondents are directed to return the
articles seized, if any, from the petitioner in
W.P. No.18821/2024.
(iv) The ECIR No.BGZO/41/2023/2849 dated
30.11.2023, the summons issued pursuant
thereto and the consequential proceedings
including the show-cause notice dated
16.02.2024 in O.A. No.1132/2024, impugned
in W.P.8914/2024 and W.P. No.22460/2025,
- 30 -
HC-KAR
NC: 2026:KHC:61902
WP No. 18821 of 2024
C/W WP No. 8914 of 2024
WP No. 4630 of 2025
AND 2 OTHERS
CNR: KAHC010389262024
are hereby quashed insofar as it relates to
the petitioners therein are concerned.
(v) Proceedings in PCR No.32/2024 pending
before the Additional City Civil and Sessions
Judge, Bengaluru (CCH-82) stands quashed
insofar as it relates to the petitioner in W.P.
No.22460/2025, W.P.No.4630/2025 and
W.P. No.5168/2025.
(vi) The ECIR No.BGZO/41/2023/2849 dated
30.11.2023 and the consequential summons
dated 09.01.2024 impugned in W.P.
No.22460/2025 are hereby quashed.
(vii) All pending interlocutory applications, if any,
stand disposed of.
Sd/-
(M.I.ARUN)
JUDGE
KMS
CT:BCK
LIST NO.: