ED is no ‘super cop’, says Karnataka High Court, quashing case against Malur MLA

The Karnataka High Court has quashed the Enforcement Directorate’s (ED) money-laundering case against K.Y. Nanjegowda, the Congress MLA from Malur, and others connected with him, holding that the agency cannot act as a “super cop”.

Justice M.I. Arun set aside the Enforcement Case Information Report (ECIR), the ED’s equivalent of an FIR, and all proceedings under the Prevention of Money Laundering Act (PMLA) that followed from it. The court also set aside a June 2024 order of the PMLA Adjudicating Authority that had confirmed the seizure of one petitioner’s assets, and ordered the seized items returned.

The ruling turns on when the ED may step in. Money laundering under the PMLA means dealing with the proceeds of another crime, called the scheduled or predicate offence. The court held that the ED’s role begins only after a primary agency, such as the police, has registered an FIR or a formal complaint about such an offence. The PMLA does not allow the ED to file a private complaint of its own. If it could do that whenever other agencies declined to act on its information, the court said, it would become a super cop.

The background

The case arose from alleged irregularities in staff recruitment at the Kolar-Chikkaballapur District Cooperative Milk Producers’ Union (KOMUL), which Mr. Nanjegowda has headed. The ED, which said its case was based on local police FIRs, raided his premises in January 2024.

The ruling follows the line of the Supreme Court’s 2022 judgment in Vijay Madanlal Choudhary, which upheld the ED’s wide powers but said money laundering cannot exist without a predicate offence. Opposition parties have long accused the ED of targeting their leaders; the Union government says the agency acts on evidence.

What’s next

The ED can challenge the ruling in the Supreme Court. It had not said whether it would.