The High Court of Jammu and Kashmir and Ladakh on Wednesday quashed a chargesheet filed against National Conference president and former Chief Minister Farooq Abdullah by the Enforcement Directorate in an alleged money laundering case, Live Law reported.
Justice Sanjeev Kumar, however, said that the central agency could register the case afresh and launch a prosecution in the matter in accordance with law, according to Bar and Bench.
The case pertains to alleged irregularities in the grant of Rs 112 crore by the Board of Control for Cricket in India to the Jammu and Kashmir Cricket Association.
The order was passed on a petition challenging the Enforcement Directorate’s complaint filed by two other co-accused, Ahsan Mirza and Manzoor Gazanfar. Abdullah was not a petitioner before the High Court in the current matter.
The alleged scam came to light in March 2012 when the Jammu and Kashmir Cricket Association Treasurer Manzoor Wazir filed a complaint against its general secretary at the time, Mohammad Saleem Khan, and former treasurer Mirza.
In the same year, the High Court ordered the Central Bureau of Investigation to investigate the matter, after which it filed a chargesheet against six persons, including Abdullah, in 2018, The Hindu reported.
The Enforcement Directorate filed a fresh case in 2019. The agency has since alleged that more than Rs 50 crore were siphoned off between 2002 and 2011 from the Jammu and Kashmir Cricket Association when Abdullah was its president.
In 2020, the Enforcement Directorate filed a chargesheet in the case before a special Prevention of Money Laundering Act court in Srinagar.
Kumar on Wednesday said that the predicate offence registered by the Central Bureau of Investigation did not involve an offence under the Prevention of Money Laundering Act.
“In the absence of there being any case registered for commission of scheduled offence or any case pending enquiry or trial in respect of scheduled offence, authorities under PMLA [Prevention of Money Laundering Act] have no jurisdiction to register ECIR [Enforcement Case Information Report] and launch prosecution for offence of money laundering under Sections 3/4 of PMLA,” the High Court said.
Section 3 of the Act lays out the offence of money laundering, while Section 4 pertains to the punishment for such offences.
“When there is no scheduled offence having been registered or pending enquiry or trial, there are no proceeds of crime and, thus, there is no offence of money laundering under Section 3 of the Act,” Kumar said, according to Bar and Bench.
The High Court also dismissed the Enforcement Directorate’s argument that it could independently look into the material in the chargesheet to conclude that the petitioner committed an offence under the Act and that it was not bound by the conclusions drawn by the Central Bureau of Investigation.
“The Enforcement Directorate is not an authority or investigating agency in any manner superior to CBI [Central Bureau of Investigation], 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 High Court said.
Kumar said that the Enforcement Directorate had to respect the decisions of the Central Bureau of Investigation to “maintain harmony” and to “avoid contradictory stands” by the two investigating agencies operating in their independent fields, Bar and Bench reported.
The High Court subsequently quashed the chargesheet and added that “it shall remain open to the Enforcement Director to register ECIR afresh and launch prosecution against the petitioner under Section 3 of the PMLA if ultimately the Court of Chief Judicial Magistrate, Srinagar frames charges for offence/offences, which are specifically mentioned in the schedule of PMLA”.
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