Is ECIR only an internal document of ED? Punjab and Haryana High Court expresses doubt

The Punjab and Haryana High Court recently questioned the Enforcement Directorate’s (ED) stand that the Enforcement Case Information Report (ECIR), which forms the basis for money laundering investigations, is only an internal document and cannot be equated with First Information Report (FIR) [Chetan Gupta vs Directorate of Enforcement and Others]..The Court was dealing with Additional Solicitor General SV Raju’s argument that since the ECIR is an internal document, it cannot be quashed like an FIR. Pertinently, the Supreme Court in Vijay Madanlal Choudhary v Union of India had accepted the ED’s stand that the ECIR was only an internal document of the central agency. .Delving into the issue, Justice Anoop Chitkara of the High Court said that while FIR was the creation of a statute under the Code of Criminal Procedure (CrPC), the ECIR was a term “given to itself” by the ED through some administrative order. “For this reason, the courts have usually quashed the FIR, which would automatically cancel all subsequent proceedings. Since ECIR is not a condition precedent for starting an investigation or inquiry/inquiry by the Enforcement Directorate and is only an internal record of the department, its quashing would serve no purpose whatsoever,” it added..However, the single-judge also opined that this does not mean the Court would not consider the plea of accused to seek quashing of complaints or other proceedings pending with the ED.“If such a view is taken, then it would give untrammeled arbitrary powers to the Enforcement Directorate to continue and keep pending the inquiry/investigation against the accused under the pretext or disguise that even if an accused has been acquired in the predicate offense, a decision is yet to be taken regarding the filing of a complaint against acquittal or such appeal is pending, or even when they do not find any evidence against the accused, at that stage, instead of absolving them, they con+nue to sit over the inquiry/investigation which would have unparalleled bearing on the accused mental health.”.The Court’s views appear to contradict a recent judgement delivered by a co-ordinate bench of the High Court which said that since ECIR was only an internal document of the ED, the High Court lacked the power to quash it.“There is no legal bar that restricts the powers of this Court under section 482 CrPC by ignoring the prayers to quash ECIR but to consider the remaining prayers to quash the complaint as well as all subsequent proceedings,” Justice Chitkara said..The Court also looked at the issue from another perspective by taking note of Section 44(1)(b) of the Prevention of Money Laundering Act (PMLA) which states that if no offence of money laundering is found after investigation, the ED shall submit a closure report before the Special PMLA Court.The Court noted that when evidence does not point to the involvement of the accused, the ED would only be closing the ECIR. “Once a closure report is filed before the concerned Court, in such closure report, the fundamental prayer to the concerned Court is to accept the closure report which would eventually led to closure of ECIR,” it added..In this context, the Court raised a doubt over the ED’s oft-repeated argument that ECIR was only its internal document.“Given above, coupled with Enforcement Directorate’s stand that ECIR is an internal document because it has no statutory force and cannot be equated with FIR on the face of it is blowing hot and cold,” Justice Chitkara said..The Court made the detailed discussion while dealing with petitions seeking quashing of an ECIR which had been registered by the ED on the basis of FIR registered by Vigilance Bureau in Punjab over allegations of alleged corruption in setting up and development of Ludhiana Improvement Trust.It was submitted before the Court that though the Vigilance Bureau has already filed a cancellation report in the FIR and the accused have been discharged, the ED was still proceeding with the ECIR. .The Court said that PMLA proceedings are always subservient and secondary to the principal offence and, therefore, allowed the petitions and closed the proceedings in the ECIR against the accused.Senior Advocate Vikram Chaudhri and advocates Hargun Sandhu and SS Saron represented the petitioners.Additional Solicitor General SV Raju, Senior Counsel Arvind Moudgil, Special Counsel Zoheb Hossain and advocates Shahil Rangra and Naveen Kumar represented the Enforcement Directorate.Additional Advocate General Sukhdev Singh represented the State of Punjab.[Read Judgment]