ED is not superior to CBI, cannot sit in appeal against CBI probe: Jammu & Kashmir High Court

The Jammu & Kashmir and Ladakh High Court on Wednesday said that Enforcement Directorate (ED) is not in any manner superior to the Central Bureau of Investigation (CBI) and cannot sit in appeal against the investigation made by the latter [Ahsan Ahmad Mirza vs Directorate of Enforcement]..It is necessary that ED respects the decision of the CBI unless it is varied or modified by a competent Court of criminal jurisdiction, Justice Sanjeev Kumar said."The Enforcement Directorate is not an authority or investigating agency in any manner superior to CBI, nor is it vested with or conferred the power and jurisdiction to sit in appeal against the investigation made and the conclusion drawn by the later. The Enforcement Directorate being a parallel investigating agency in respect of crimes under PMLA must accept the investigation carried by another investigating agency and the conclusion drawn by the said agency in respect of commission of the offences other than the offences under PMLA,” the Court stated..The Court made the observations while quashing the money laundering case against former J&K Chief Minister Farooq Abdullah and others in connection with the alleged misappropriation of funds of the J&K Cricket Association.The ED had contended that it can independently look into the chargesheet filed in the predicate case by CBI and come to a different conclusion regarding the offences to justify its money laundering case.A money laundering case is registered on the basis of a predicate offence or the First Information Report (FIR) lodged by another investigating agency like the police or CBI.However, the ED is empowered to initiate PMLA proceedings against the accused only if the main agency has invoked an offence which is included in the scheduled offences mentioned under the Prevention of Money Laundering Act (PMLA)..Additional Solicitor General (ASG) SV Raju’s argument before the High Court was that though the CBI had not invoked any scheduled offence in the present case, the ED’s view was that the CBI chargesheet itself revealed commission of scheduled offences.The Court rejected the argument and said that ED cannot resort to PMLA proceedings against a person on mere assumption that their property must be proceeds of crime..It stressed that ED being a parallel investigation agency must accept the probe carried out by another agency and the conclusions drawn with respect to the offences involved.The ED cannot be permitted to preempt the outcome of an exercise, which is yet to be undertaken by a competent Court of law at the stage of charge/discharge, the Court added. “It cannot be said that notwithstanding the fact that there is no case registered or charge-sheet filed before the competent Court of criminal jurisdiction for commission of scheduled offence, the Enforcement Director can still register and launch prosecution for the offence of money laundering under Sections 3/4 of PMLA on the assumption that the material collected by the investigating agency(CBI) does disclose commission of scheduled offence”..The Court further said that the ED cannot be allowed to assume jurisdiction of the competent court of criminal jurisdiction and arrive at conclusions different from those arrived at by the CBI which has investigated the matter .It, thus, stressed that the two agencies must maintain harmony and avoid contradictory stands.“With a view to maintaining harmony and to avoid contradictory stand by the two investigating agencies operating in their independent fields, it is necessary that Enforcement Directorate respects the decision of the CBI unless it is varied or modified by a competent court of criminal jurisdiction,” the Court said..Advocates Shariq J Reyaz and M Syed Bhat represented the petitioners.Additional Solicitor General SV Raju, Special Counsel Zoheb Hossein and Manin Jain with Deputy Solicitor General of India TM Shamsi and advocates Faizan, Rehana Qayoom and Monika Kohli represented the ED..[Read Judgment]