The Bombay High Court, on Tuesday, has quashed money laundering proceedings initiated by the Enforcement Directorate (ED) against partnership firm K.S. Chamankar Enterprises and its partner brothers. It was ruled that once the petitioners were discharged by trial court from the predicate offence, prosecution under the Prevention of Money Laundering Act (PMLA) could not continue.
The case stemmed from a 2015 FIR registered by the Anti-Corruption Bureau, Mumbai, alleging irregularities in the construction of Maharashtra Sadan in Delhi, the High Mount Rest House, and certain RTO buildings. Based on this FIR, the ED registered Enforcement Case Information Reports (“ECIRs”) in June 2015 and filed a charge sheet in PMLA case. However, in July 2021, the trial court discharged the Chamankars from the corruption case, observing that the works had been carried out as per contract and no incriminating evidence was available. That order was never challenged by the prosecution and attained finality.
Petitioners filed a petition under Articles 226 and 227 read with Section 482 of the CrPC[1] for quashing the PMLA case. Before the High Court, petitioners relied on the Supreme Court’s ruling in Vijay Madanlal Choudhary v. Union of India[2], which held that if the accused are acquitted or discharged in the scheduled offence, money laundering proceedings cannot survive. The ED, while conceding the discharge order, argued that PMLA prosecution could still proceed, citing Pavana Dibbur v. Directorate of Enforcement[3] and a Jammu & Kashmir High Court ruling in Niket Kansal v. Union of India[4].
The Division Bench of Justices A.S. Gadkari and Rajesh S. Patil rejected respondent’s contention, noting that the binding authority of the Supreme Court in Vijay Madanlal Choudhary[5] is applied in this case. The Court accordingly quashed the ECIRs and charge sheet filed by the ED, bringing an end to the PMLA case against the petitioners.
Appearance
Petitioners: Mr. Shreeyash Lalit (Through V.C.) a/w Ms. Shweta R. Rathod i/b Elixir Legal Services
Respondents: Ms. Manisha Jagtap for Respondent No.2.
Smt. M.M. Deshmukh, APP for Respondent No.3, State.
[1] Replaced with Section 528 of Bhartiya Nagarik Suraksha Sanhita, 2023
[2] (2023) 12 SCC 1 : (2023) 21 ITR-OL 1 : 2022 SCC OnLine SC 929
[3] (2023) 15 SCC 91
[4] 2025 SCC OnLine J&K 475
[5] Supra
