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The Jharkhand High Court has held that an acquittal in a predicate offence must attain finality before it can bring money laundering proceedings against the accused to an end, observing that an acquittal which remains open to appellate challenge cannot be used as a “blanket shield” against proceedings under the Prevention of Money Laundering Act, 2002 (PMLA).

A Single Judge Bench of Justice Sujit Narayan Prasad was hearing a petition filed by Amar Mandal seeking quashing of an Enforcement Case Information Report (ECIR) registered by the Directorate of Enforcement under Sections 3 and 4 of the PMLA.

The ECIR arose from a case concerning alleged illegal transportation of coal. The petitioner had been acquitted by the Judicial Magistrate First Class, Godda, on February 10, 2026, of the predicate offences under Sections 414 and 120B IPC read with Sections 4 and 21 of the Mines and Minerals (Development and Regulation) Act, 1957. Relying on the acquittal, the petitioner argued that there could be no surviving PMLA proceedings against him since the predicate offence, which formed the basis for the scheduled offence, had ended in acquittal.

The Court noted that the legal position is settled that where a person is “finally absolved” of a scheduled offence by way of discharge, acquittal or quashing of the criminal case, there can be no action for money laundering against that person. However, the Bench found that the petitioner's acquittal had not attained such finality, as it remained amenable to challenge before the competent appellate forum. The Court observed:

“The legal fiction of 'final absolution' crystallizes upon the exhaustive invocation of all available appellate remedies or, alternatively, upon the expiry of the statutory limitation period for filing an appeal without any challenge being preferred.”

The Court further noted that the Magistrate's acquittal was confined to the alleged illegal transportation of coal involving a single intercepted truck. The trial court had not adjudicated upon the recovery of ₹85 lakh in cash, 134 original property deeds or the alleged forensic trail of ₹8.94 crore deposited in the petitioner's bank accounts.

In the absence of any adjudication by the trial court regarding the seized assets, the Court held that the petitioner could not rely upon the acquittal, which was yet to attain finality, as a blanket shield against the PMLA proceedings.

The Bench also noted that the seized assets were already the subject matter of proceedings before the PMLA Adjudicating Authority, New Delhi. The petitioner had participated in those proceedings and filed a detailed reply to the show-cause notice issued under Section 8(1) of the PMLA.

The High Court also declined to quash the ECIR, holding that an ECIR is an internal document of the Enforcement Directorate and is not equivalent to an FIR. The Court observed:

“An ECIR does not constitute the initiation of a criminal prosecution; rather, it is an internal document of the Enforcement Directorate. The mere institution of an ECIR to invoke jurisdiction does not, by itself, amount to launching or initiating prosecution against the person concerned. It only marks the commencement of an enquiry.”

The Bench further held that the ECIR could not be subjected to judicial interference at the threshold under Article 226 of the Constitution, particularly when the ED investigation and statutory adjudication concerning the seized assets were ongoing.

The petition was accordingly dismissed.

Case Title: Amar Mandal v. Directorate of Enforcement.

Case No.: W.P. (Cr.) No. 231 of 2026

Appearance: For the Petitioner – Mr. Ajit Kumar, Sr. Advocate, Mr. Kartik Sabharwal, Advocate, Ms. Aprajita Bhardwaj, Advocate, Mr. Sabi Uddin, Advocate, Mr. Abash Ajit Kumar, Advocate and Mr. Abhishek Abhi, Advocate. For the Opposite Party – Mr. Amit Kumar Das, Sr. Advocate and Mr. Saurav Kumar, Advocate.

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