The Jharkhand High Court has held that an acquittal in a predicate offence must attain finality before it can terminate proceedings under the Prevention of Money Laundering Act, 2002 (PMLA). The court observed that an acquittal which remains open to appellate challenge cannot be relied upon as a blanket shield to end PMLA action against the accused.
A Single Judge Bench of Justice Sujit Narayan Prasad was hearing a criminal writ petition filed by Amar Mandal seeking quashing of an Enforcement Case Information Report (ECIR) registered by the Directorate of Enforcement under Sections 3 and 4 of the PMLA. The ECIR arose from allegations of illegal transportation of coal. The petitioner had been acquitted by the Judicial Magistrate First Class, Godda, on February 10, 2026, of the predicate offences under Sections 414 and 120B of the Indian Penal Code read with Sections 4 and 21 of the Mines and Minerals (Development and Regulation) Act, 1957.
The petitioner contended that since he had been acquitted of the predicate offence, which formed the basis for the scheduled offence under PMLA, there could be no surviving money laundering proceedings against him. The court acknowledged the settled legal principle that where a person is finally absolved of a scheduled offence through discharge, acquittal, or quashing of the criminal case, no action for money laundering can be initiated against that person.
However, the Bench found that the petitioner's acquittal had not attained the required finality, as it remained amenable to challenge before the competent appellate forum. The court observed: 'The legal fiction of final absolution crystallizes upon the exhaustive invocation of all available appellate remedies or, alternatively, upon the expiry of the statutory limitation period for filing an appeal without any challenge being preferred.'
The court further noted that the Magistrate's acquittal was confined to the alleged illegal transportation of coal involving a single intercepted truck. The trial court had not adjudicated upon the recovery of ₹85 lakh in cash, 134 original property deeds, or the alleged forensic trail of ₹8.94 crore deposited in the petitioner's bank accounts. In the absence of any adjudication by the trial court regarding these seized assets, the court held that the petitioner could not rely upon the acquittal, which was yet to attain finality, as a blanket shield against the PMLA proceedings.
The Bench also noted that the seized assets were already the subject matter of proceedings before the PMLA Adjudicating Authority, New Delhi. The petitioner had participated in those proceedings and filed a detailed reply to the show-cause notice issued under Section 8(1) of the PMLA.
The High Court declined to quash the ECIR, holding that an ECIR is an internal document of the Enforcement Directorate and is not equivalent to an FIR. The court observed: 'An ECIR does not constitute the initiation of a criminal prosecution; rather, it is an internal document of the Enforcement Directorate. The mere institution of an ECIR to invoke jurisdiction does not, by itself, amount to launching or initiating prosecution against the person concerned. It only marks the commencement of an enquiry.'
The Bench further held that the ECIR could not be subjected to judicial interference at the threshold under Article 226 of the Constitution, particularly when the ED investigation and statutory adjudication concerning the seized assets were ongoing. The petition was accordingly dismissed.
The case is titled Amar Mandal v. Directorate of Enforcement, bearing Case No. W.P. (Cr.) No. 231 of 2026.