National Herald case: ED 'simply inverted template' of PMLA, says Delhi court

New Delhi, Dec 16 (PTI) The Enforcement Directorate “simply inverted the template" of PMLA by registering an FIR in 2021, a Delhi court on Tuesday said while refusing to take cognisance of the ED's money laundering charge against Congress leaders Sonia Gandhi and Rahul Gandhi in the National Herald case.

In his 117-page order, Special Judge Vishal Gogne said that the CBI had decided not to register an FIR on Subramanian Swamy’s 2014 private complaint, and there appeared to be a “long-lasting consensus” between it and the ED till an Enforcement Case Information Report (equivalent to FIR) was registered on June 30, 2021.

The judge said that before the ECIR was registered, the ED was probably “cognisant of the necessity of an FIR by a law enforcement agency” like the CBI as the “jurisdictional foundation” for the investigation under the Prevention of Money Laundering Act (PMLA).

He said, “Upon first having shared information with the CBI in the year 2014 and then having waited for seven years for the CBI to act, the ED simply inverted the template of money laundering being consequential to the predicate offence by recording its own ECIR on June 30, 2021.” “The PMLA perceives the scheduled offence to be recorded and commenced for investigation as the first step, and the probe into money laundering as the second step. Perhaps, the ED should have stayed as staid as the CBI,” the court said.

The original criminal act from which the criminal proceeds are generated is called a predicate offence, while the activity of disguising the criminal origins of the proceeds of crime is called money laundering.

The judge said that the conventional approach of both agencies in not registering an FIR was reiterated by a 2022 Supreme Court verdict, holding that an FIR in the scheduled offence was a prerequisite for investigation into the proceeds of crime.

He said that an FIR was not a mere entry in a register but “the progenitor of material steps in investigation” and as such a “league” was “unattainable” by an investigation based on a complaint.

“Certainly, the ED, as an investigation agency dealing with the proceeds of crime, cannot be training or involving individual complainants like Swamy, akin to ‘Nodal Officers’ or Law Enforcement Agencies (LEAs) in terms of the Financial Action Task Force (FATF) report,” the judge said.

He said there were several “improbabilities” because of which the ED apparently was “possibly loath to register an ECIR on the complaint of Swamy since 2014”.

“The relevant notings from the case diaries of the present investigation, inspected by the court, are a testament to the acceptance, by the ED, of the non-viability of the individual complaint (by Swamy) as the basis for initiating a PMLA investigation,” the judge said.

He said the consistency of a long held view regarding the requirement of an FIR in the predicate offence as a trigger for PMLA investigation was ruptured by the ED in instituting the present prosecution complaint (ED's equivalent of chargesheet) without an FIR.

Judge Gogne said that a private complaint could not “liaison with the premier agency tasked with tackling money laundering for apparent reasons of locus, capacity, confidentiality and coordination”.

He said, “For want of a better expression, the court would observe that a complaint case and the incidents of an FIR are chalk and cheese in their contribution to evidence collection and meaningful trial. The complex and layered allegation set of economic offences or financial frauds is certainly not amenable to trial as a complaint case.” Regarding the merits of the allegations, the judge said he was not required to address them.

“The ED is evidently conducting further investigation on the allegations, as evident from its sharing information under section 66(2) PMLA with the Economic Offences Wing (EOW), Delhi which has resulted in registration of an FIR by the EOW on October 3, 2025,” the special judge said.

He said that the continuing investigation by these two agencies "may lead to the uncovering of additional evidence or (additional) accused”.

“Since the present order has declined cognisance solely on a question of law related to jurisdiction of the ED and therefore also the jurisdiction of this court, the present order does not efface either the existing allegations or curtail further investigation,” the judge said. PTI MNR MNR KVK KVK