Enforcement Directorate is not a ‘super cop’, says Karnataka High Court

The Karnataka HC ruled that the ED’s power under the Prevention of Money Laundering Act (PMLA) is “derivative and not original”. File | Photo credit: V. Sreenivasa Murthy

In a setback for the Enforcement Directorate (ED), the Karnataka High Court ruled that the ED is “not a super cop” and cannot file a private complaint to initiate a money laundering investigation when the relevant authorities refuse to prosecute a scheduled crime based on information provided by the ED.

“Derivative and not original”

The court ruled that the ED’s power under the Prevention of Money Laundering Act (PMLA) is “derivative and not original” and that the filing of a private complaint under Section 200 of the Penal Code (Cr.PC) / Section 223 of the Bharatiya Nagarik Surakasha Sanhita is not contemplated under the PMLA.

“…one institution of the country does not become sovereign to abuse the powers vested in it. The law recognizes the requirement of checks and balances. The ED is not a super cop to investigate anything and everything that comes to its notice,” the court said, adding that the ED has to exercise only the powers expressly conferred on it by the PMLA.

Justice MI Arun passed the order while allowing a batch of writ petitions filed by Congress party MLA from Malur constituency KY Nanjegowda, who is also the president of Kolar and Chikkaballapur Milk Union Ltd. (KOMUL), YB Ashwathanarayana, then Director of KOMUL, KN Gopala Murthy, Nagesh N. and Raju Krishna

The petitioners challenged the ED’s ECIR dated November 2023, the order of the Adjudicating Authority confirming the seizure of the articles, the summons issued to them and the private complaint filed by the ED in the Special Court.

Case background

The case arose out of a criminal case initiated on a private complaint of “land scam” filed by one KC Rajanna in a Kolar court alleging irregularities in the grant of around 80 acres of land to 38 persons by the Malur Grants Committee, of which Mr. Nanjegowda was the chairman.

The ED treated the case as a predicate offense and registered an ECIR in 2023. During searches conducted under this ECIR, the ED claimed to have come across material indicating irregularities in the recruitment of KOMUL, which it termed a separate “job scam”. In addition, the ED shared information with the Karnataka Lokayukta police about the alleged “job scam” it had discovered during searches.

However, the “land fraud” case ended in a closure report by the jurisdictional police and was dismissed by the trial court for lack of sanction to prosecute the public servant, despite the complainant Mr. Rajanna protesting the closure report.

As the Lokayukta failed to act on the information it shared under Section 66(2) of the PMLA, the ED itself filed a private complaint in a special court in Bengaluru against KOMUL’s “job scam”.

It was argued on behalf of the petitioners that once the predicate offense has collapsed, even on technical grounds, the ED cannot proceed with the PMLA proceedings and that when the ED detects another scheduled offence, its only permissible course of action is to share the information with the competent authority and not file a separate private complaint and investigate it.

The court accepted the petitioners’ contention and held that Section 66(2) required the ED to notify the agency concerned and not to initiate the investigation itself.

In a strange way

“In law, where an act is to be done in a particular way, it must be done in that way and in no other way,” the court said, citing the constitutional separation of powers and the need for checks and balances.

The court pointed out that the PMLA does not expressly empower the ED or its authorities to file a private complaint regarding a scheduled offense and investigate the accused under the PMLA based on that.

Allowing the ED to prefer a private complaint when other government agencies find it inappropriate to initiate any proceedings against anyone would be tantamount to allowing the ED to act as a super-cop and is contrary to the philosophy of the law which requires the existence of a predicate offense for the ED to initiate proceedings as contemplated under the PMLA,” the court said.

“The ED is not like any other person who would file a complaint under Section 200 Cr.PC/223 BNSS… If the ED is allowed to file a private complaint, it will be able to file a private complaint against any person itself and initiate an investigation against him. This is not contemplated under the provisions of PMLA,” the court clarified.

Published – 07 Nov 2026 16:31 IST