Bombay HC asks ED why its complaint can't be quashed if original offence is closed

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The Bombay High Court on Tuesday asked the Enforcement Directorate (ED) why an 'Enforcement Case Information Report' (ECIR) cannot be quashed if the original offence on which it is based has been closed.

A division bench of Justices Revati Mohite Dere and Prithviraj Chavan was hearing a petition filed by Jet Airways founder Naresh Goyal and his wife Anita Goyal seeking the quashing of an alleged money laundering case registered against them by the ED.

Generally an ECIR is registered on the basis of a criminal case registered by the police, CBI or any other agency.

The Goyals' lawyers senior advocates Ravi Kadam and Aabad Ponda submitted that the ECIR was registered on the basis of a complaint filed with the Mumbai police in 2018.

But in March 2020, the police filed a closure report stating that they found no substance in the complaint and the dispute seemed to be civil in nature.

The report was accepted by a magistrate's court.

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As the "scheduled offence" (police case) did not stand, the ED case could not survive, the lawyers said.

ED lawyers Hiten Venegaonkar and Shreeram Shirsat argued that the ECIR can not be quashed as it was an internal, private 'piece of paper.

"ECIR can never be quashed. It is not a statutory documentary and a simple paper. If we want to initiate a civil case, then ECIR helps. You cannot equate ECIR with FIR. What happens to the other actions that I have taken basis the ECIR, like recording statement of witnesses, what happens to that?" Venegaonkar argued.

The bench, however, asked if anything would survive when the scheduled offence had been closed.

"ECIR is basis on which you start investigation. You are making a big statement that ECIR cannot be quashed. If it is just a piece of paper, how do you initiate investigation on that? What happens when the scheduled offence goes? The very basis for ECIR goes, then what survives?" the court asked.

Ponda pointed out a Supreme Court order where Solicitor General Tushar Mehta had submitted that once a closure report on the original offence is accepted by a court, the ECIR did not survive.

The court then directed ED lawyers to take instructions and posted further hearing on Wednesday.

The police had registered a First Information Report against the Goyals for alleged cheating and forgery on a complaint filed by Akbar Travels.

The travel agency had alleged that it suffered a loss of over Rs 46 crore after the airline cancelled flight operations from October 2018.

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