'Can ED Add Predicate Offences From Different FIRs Through Addendums In ECIR?' Karnataka HC Asks In Money Laundering Case

The Karnataka High Court heard detailed submissions challenging the Enforcement Directorate's (ED) action of adding predicate offences through addendums to an Enforcement Case Information Report (ECIR). The said ECIR is a part of the money laundering investigation against 'Puppys Tours & Travels” and other connected parties.The single judge bench of Justice M. Nagaprasanna was hearing a writ petition filed by the stakeholders embroiled in a money laundering scandal connected to an online gaming application called KING567. The allegation levelled against the petitioners is that they have laundered the money obtained through the said gaming app through various channels. The petitioners sought a declaration that the search, seizure, freezing and retention of assets carried out by the ED are illegal, along with a plea to quash the show cause notice issued under Section 8(1) of the Prevention of Money Laundering Act (PMLA) and release the assets.The primary issue raised before the Court concerned whether the ED has the power to add predicate offences through addendums. The second aspect to be examined was whether the ED could club together multiple FIRs arising from separate transactions using a single ECIR.ED had registered the ECIR on 22.07.2025 based on multiple FIRs filed over the course of 15 years, for betting and gambling activities wherein the petitioners were allegedly involved.First of all, the counsel appearing for the petitioners, Adv. Mayank Jain, argued that the statute does not confer any power upon the ED to club together multiple schedule offences [predicate offences resulting in illegal proceeds] arising out of different transactions in one ECIR.According to the petitioners, the definition of “proceeds of crime” under the PMLA statute indicates property derived directly or indirectly from a criminal activity relating to a specific scheduled offence.When the Court asked about the dates of the predicate offences, counsel for the petitioner submitted as below:“The FIRs start from 2011, beginning from 02.03.2011. When the ECIR was registered in 2025, no FIR was pending. Everything was closed.”Clubbing Of FIRs Through Addendum In ECIRAccording to the arguing counsel for the petitioners, the ED subsequently added FIRs from Bhopal and Harohalli through addendums in August 2025, even though there was no surviving predicate offence at the time of registration of the ECIR.The petitioner argued that the ED's approach effectively results in merging proceeds of crime arising from unrelated transactions. There is no such statutory mechanism permitting the clubbing of unrelated transactions, added the counsel.It was also contended that such a practice would lead to arbitrary discretion, with no checks or safeguards on the agency's powers.There were three ECIRs in different states. The ECIR in Hyderabad was already present when the FIR in Telangana was added to the Bengaluru ECIR. This was done soley because the initial ECIR of Bengaluru had the predicate offences already closed, submitted the counsel.The ED without any justification has registered addendums in the Bengaluru ECIRs, adding predicate offences emanating in Telangana, especially when an ECIR registered in Telangana was already lodged prior in time.The addendum to add Hyderabad FIR was an attempt to retain jurisdiction, argued the petitioner's counsel. When the FIR from Hyderabad was also closed, ED relied on the Bhopal FIR to retain jurisdiction, said the counsel.Jurisdictional Concerns On FIRs In Different States In Single ECIRDuring the hearing, Justice Nagaprasanna raised a few doubts regarding the jurisdictional complications of adding FIRs from different states through ECIR addendums.The Court asked whether any judicial precedent permits adding a predicate offence registered in one state as an addendum to an ECIR registered in another state.“Has any court considered adding another FIR from a different crime as an addendum to an ECIR?” the Court asked.The judge further observed:“If a predicate offence arises in another state, should an ECIR not be registered there? Where would the concept of jurisdiction go if FIRs from different states are added into one ECIR?”The Court also enquired why the ED could not simply register a fresh ECIR for a different offence instead of adding it to an existing investigation.ECIR Is Only An Internal Document: EDResponding to the petitioners' submissions, Zoheb Hussain, appearing for the ED, argued that territorial restrictions applicable to police investigations under the CrPC/BNSS do not bind the Enforcement Directorate.He submitted that the offence of money laundering under Section 3 of the PMLA relates to the “proceeds of crime”, which may arise from multiple criminal activities across jurisdictions.Referring to the Supreme Court's decisions, including Vijay Madanlal Choudhary and Rana Ayyub, ED argued that an ECIR is merely an internal administrative document for initiating an inquiry. It does not require...

'Can ED Add Predicate Offences From Different FIRs Through Addendums In ECIR?' Karnataka HC Asks In Money Laundering Case

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'Can ED Add Predicate Offences From Different FIRs Through Addendums In ECIR?' Karnataka HC Asks In Money Laundering Case

Sebin James

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