Terming the trial court's reasoning legally flawed and prejudicial to the prosecution, the Enforcement Directorate (ED) has approached the Delhi High Court challenging the Rouse Avenue Court's order that declined to take cognisance of its money laundering complaint in the National Herald case involving Congress leaders Sonia Gandhi and Rahul Gandhi. In its appeal, the ED has argued that the trial court erred in holding that proceedings under the Prevention of Money Laundering Act (PMLA) cannot be sustained in the absence of an FIR in the scheduled offence. The agency has contended that such a requirement finds no place in the statutory scheme of the PMLA and that reading it into the law amounts to rewriting the legislation.
According to the ED, the impugned order wrongly treats an FIR as the only valid trigger for money-laundering proceedings, ignoring the settled position that criminal law can be set in motion either through a police case or a private complaint.The agency has asserted that once a competent court has already taken cognisance of the scheduled offence, and that decision has been upheld by higher courts the origin of the offence, whether through an FIR or a private complaint, becomes immaterial. The ED has further submitted that cognisance taken on a private complaint stands on a higher judicial footing than a mere FIR, as it reflects the application of the judicial mind at the threshold stage. It has been argued that the trial court failed to appreciate that cognisance of the scheduled offences under Sections 420 and 120B of the IPC had already been taken and upheld up to the Supreme Court.
Challenging the order passed by Special Judge Vishal Gogne, the ED has maintained that the PMLA does not restrict the manner in which a scheduled offence is reported. What is required, it said, is the existence of a scheduled offence and the generation of proceeds of crime, which can then be investigated and prosecuted under Sections 3 and 4 of the PMLA. The agency has also stated that the trial court's interpretation creates two impermissible classes of scheduled offences--those arising from FIRs and those arising from private complaints thereby granting what it termed an unintended "shield" to alleged money launderers in complaint-based cases. Such an approach, the ED argued, amounts to judicial legislation by adding words to the statute that Parliament never enacted.
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The appeal arises from the Rouse Avenue Court's order declining cognisance of the ED's prosecution complaint against Sonia Gandhi, Rahul Gandhi, Sam Pitroda, Suman Dubey, Young Indian, Dotex Merchandise Pvt Ltd and others. While the trial court clarified that it was not examining the merits of the allegations and permitted further investigation following a subsequent FIR registered by the Economic Offences Wing (EOW), Delhi, it held the prosecution complaint, as filed, to be legally unsustainable. The ED has now sought the setting aside of that order and permission from the Delhi High Court to proceed with its prosecution under the PMLA