PMLA summons may issue without awaiting the outcome of predicate-offence proceedings.

The petitioners challenged summons issued by the Directorate of Enforcement under Section 50 of the Prevention of Money Laundering Act, 2002 (PMLA), requiring them to appear and give evidence in an investigation under the Act.

The proceedings followed a bank complaint concerning alleged loan fraud and a CBI case alleging, among other offences, cheating, forgery and conspiracy—offences the Enforcement Directorate treated as predicate offences under the PMLA.

One related criminal petition remained pending, while the CBI investigation had concluded and its final report had been provided to the Enforcement Directorate.

The petitioners argued that the summons were an abuse of process, including because of the pending proceedings and their pending one-time settlement application with the bank. They also offered to cooperate with the investigation.

Whether the summons issued under Section 50 of the PMLA were valid and sustainable in law.

Whether the Enforcement Directorate had jurisdiction and authority to issue the summons under the PMLA.

Section 50(2) and (3) of the PMLA empowers authorised officers to summon persons whose attendance or evidence may be relevant to an investigation or proceeding, and to require them to attend, state the truth and produce required documents; proceedings under Section 50 are judicial proceedings under Section 50(4).

The Court treated the alleged offences in the CBI case as scheduled predicate offences and considered whether the alleged loan proceeds constituted “proceeds of crime” under Section 2(1)(u) of the PMLA.

It relied on V. Senthil Balaji v. State, Abhishek Banerjee v. Directorate of Enforcement and Vijay Madanlal Choudhary v. Union of India concerning the PMLA’s investigative and summons powers.

It further relied on Gian Singh v. State of Punjab for the principle that settlement or repayment does not automatically extinguish proceedings involving serious alleged offences, and on Commissioner of Customs v. Sayed Ali for the principle that courts should ordinarily not interfere at the summons stage except in exceptional cases.

Under Neeharika Infrastructure v. State of Maharashtra and Sanjay Kumar Gupta v. State of U.P., a blanket order restraining coercive steps cannot be granted as a substitute for seeking anticipatory bail before the competent court.

The Court found that the CBI case alleged offences treated as scheduled offences under the PMLA and that the Enforcement Directorate had examined bank records said to show transfers of loan proceeds to the petitioners’ accounts and further movement through associated entities.

Those allegations supplied a basis for the Enforcement Directorate to investigate whether the funds were proceeds of crime and to summon the petitioners under Section 50; the petitioners had not established that the authority lacked jurisdiction or competence.

The pending criminal proceedings, the stay in one related case, and the bank’s pending settlement application did not invalidate the summons or bar a distinct PMLA investigation.

The Court also declined to grant protection against coercive steps, holding that such relief could not be granted as a blanket order in this petition.

The criminal petition was dismissed, and pending miscellaneous applications were closed.