The Delhi High Court quashed the Enforcement Directorate’s money‑laundering investigation against the Aristo Group, stating that a Prevention of Money Laundering Act (PMLA) case cannot survive after its underlying offence is closed.
Predicate offence must remain alive for PMLA action
Justice Anish Dayal, writing a 115‑page opinion, said the investigation had been based on a single FIR filed in February 2021. That FIR alleged forged signatures on share transfers and bank moves. In December 2022 the Economic Offences Wing filed a cancellation report after forensic analysis proved the signatures authentic, and a magistrate accepted the report in June 2025.
Because the report ended the scheduled offence, the court held the PMLA proceedings could not continue. The ruling cites the Supreme Court’s decision in Vijay Madanlal Choudhary and later cases that a money‑laundering charge is “parasitic” on a live predicate offence. Without a surviving predicate, the ECIR (Enforcement Case Information Report) loses its legal footing.
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Addendum to a dead case labeled colourable
Two months after the magistrate’s acceptance of the cancellation report, the Enforcement Directorate issued an “addendum” to the same ECIR. It tried to attach an older 2019 FIR, which concerned alleged wrongful confinement of the family matriarch and removal of jewellery, as a fresh predicate offence.
The court found the addendum untenable on two grounds. First, a dead ECIR cannot be revived by tacking on a new predicate. Second, the delay—six years between the 2019 FIR and the addendum—showed procedural impropriety. The judges described the move as a “colourable exercise of power.”
If the directorate truly believed the 2019 FIR disclosed proceeds of crime, the court noted, it could have opened a fresh ECIR instead of grafting it onto a closed one. The addendum was therefore struck down, and all related searches and summons were nullified.
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Comparing this outcome with earlier money‑laundering disputes, the court’s stance reflects a pattern: courts have consistently refused to let authorities extend investigations beyond the life of the original predicate. This approach curtails the risk of agencies reviving old cases merely to exert pressure, a concern that has surfaced in several high‑profile financial probes.
In its final order, the High Court directed that the status quo ante be restored for the petitioners. All coercive actions stemming from the ECIR and its addendum were quashed, and the Enforcement Directorate was barred from initiating further steps unless a higher court revives the predicate offence.
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