High Court has No Jurisdiction to Direct ED to Register ECIR Merely on Prima Facie Finding Existence of Predicate Offence: Supreme Court [Read Order]
The Supreme Court set aside a direction passed by the Kerala High Court to the Enforcement Directorate to register a case under the Prevention of Money Laundering Act in an alleged Co-operative bank fraud case
![High Court has No Jurisdiction to Direct ED to Register ECIR Merely on Prima Facie Finding Existence of Predicate Offence: Supreme Court [Read Order]](https://www.taxscan.in/wp-content/uploads/2025/03/High-Court-No-Jurisdiction-to-Direct-ED-No-Jurisdiction-ED-to-Register-ECIR-Merely-Prima-Facie-Finding-Existence-of-Predicate-Offence-Supreme-Court-taxscan.jpg "High Court has No Jurisdiction to Direct ED to Register ECIR Merely on Prima Facie Finding Existence of Predicate Offence: Supreme Court [Read Order]")
The Supreme Court, in a recent case, held that High Court could not have passed an order to register an Enforcement Case Information Report (ECIR) merely on the basis of a prima facie conclusion that a predicate offence has been committed. The HC observed that “Prima facie, it is a case of breach of trust and cheating which which is a predicate offence as per the provisions of Section 3...
The Supreme Court, in a recent case, held that High Court could not have passed an order to register an Enforcement Case Information Report (ECIR) merely on the basis of a prima facie conclusion that a predicate offence has been committed.
The HC observed that “Prima facie, it is a case of breach of trust and cheating which which is a predicate offence as per the provisions of Section 3 of the Prevention of Money Laundering Act, 2002. Since we had issued a notice to Mr.Jayasankar, Standing Counsel for the Enforcement Directorate, we thus direct the Enforcement Director to register an ECIR as provided under the Act against all the persons involved, for misappropriation, breach of trust, cheating as Well as offences under the PC Act forthwith.”
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The High Court bench of Justice Amit Rawal and Justice K. V. Jayakumar passed the impugned order while deciding an appeal filed by a depositor of the bank. As per allegations, , an amount of Rs. 24 Crore has been siphoned off from the Bank. The Court noted that FIR has been registered only against the former Secretary of the Bank. The surcharge proceedings initiated by the Kerala Co-operative Societies Act has fixed a liability of Rs 24,22,95,724 on 14 members of the former governing body of the Bank. The court wondered how other persons were let out without any criminal case.
The two judge bench of Justice Abhay S Oka and Justice Ujjal Bhuyan held that "High Court had no reason to pass a drastic order of directing the ED to register an ECIR only because the High Court prima facie came to a conclusion that a predicate offence exists,".
The Court observed that since breach of trust and cheating is a predicate offence as per the provisions of the Prevention of Money Laundering Act, a direction to register ECIR was warranted.The bench left it to the ED to take a call on the question of initiating proceedings under the PMLA.
To Read the full text of the Order CLICK HERE
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