The Karnataka High Court has ruled that a petition invoking Article 226 of the Constitution, read with Section 482 of the CrPC, can be maintained to challenge an Enforcement Case Information Report (ECIR) registered by the Directorate of Enforcement (ED) and the consequential proceedings arising from it and rejected the ED’s preliminary objection that an ECIR is merely an internal administrative document and therefore cannot be subjected to judicial scrutiny.
The bench of Justice Nagaprasanna observed that the judicial position on the question was not homogeneous. There were two distinct lines of authority. One line, including decisions of the Madras, Orissa and Punjab and Haryana High Courts, had held that an ECIR could not be challenged under Section 482 CrPC because it was an internal administrative document and not a criminal proceeding under the CrPC. The other line had recognised the power of the High Court to examine ECIR-related proceedings, particularly where constitutional jurisdiction under Article 226 was invoked.
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The first petitioner was engaged in operating an online technology platform for online gaming, while the second petitioner, described as a subsidiary, operated the Pocket 52 platform. The petitioners stated that the games offered through the platform included games of skill, including poker. Following the coming into force of the Promotion and Regulation of Online Gaming Act, 2025, the first petitioner discontinued its business in compliance with the legislation.
The controversy originated from a complaint lodged on December 5, 2024, before the Central CEN Crime Police Station. The complaint resulted in registration of Crime No. 722 of 2024 for offences under Section 318(2) of the Bharatiya Nyaya Sanhita, 2023 and Section 66 of the Information Technology Act, 2000. The allegation was that the petitioners had indulged in fraudulent online gaming operations, allegedly causing the complainant a loss of around ₹3 crore.
However, after investigation, the investigating agency filed a ‘B’ report, concluding that there was no material warranting prosecution. The jurisdictional court, after providing the complainant an opportunity of hearing, accepted the ‘B’ report. According to the judgment, that order attained finality, bringing the criminal proceedings to an end.
The petitioners’ grievance was that nearly six months after the predicate criminal case had effectively ended, the ED registered ECIR/BGZO/29/2025 dated November 11, 2025 under the Prevention of Money Laundering Act, 2002 (PMLA). Search and seizure operations were subsequently conducted between November 18 and November 22, 2025.
The ED also approached the Adjudicating Authority under Section 17(4) of the PMLA for retention of seized records and properties, followed by show-cause notices under Section 8 of the PMLA. The petitioners contended that these proceedings were founded upon a predicate offence which had already ceased to exist following acceptance of the ‘B’ report.
The petitioners therefore approached the High Court under Articles 226 and 227 of the Constitution read with Section 528 of the BNSS, 2023, seeking quashing of the ECIR and consequential proceedings.
The ED raised a preliminary objection to the maintainability of the petition itself. Its argument was that an ECIR is fundamentally different from an FIR registered under Section 154 of the CrPC.
According to the ED, an ECIR is neither a statutory document nor something recognised under the CrPC. It is an internal administrative record maintained by the ED for facilitating investigation under the PMLA. Consequently, the ED argued that the High Court’s inherent jurisdiction under Section 482 of the CrPC, or its corresponding provision under Section 528 of the BNSS, could not be invoked to challenge the ECIR.
The ED relied on judgments of the Supreme Court and various High Courts holding that an ECIR is not equivalent to an FIR and cannot ordinarily be challenged under Section 482 merely because it has been registered by the ED.
The petitioners, represented by senior counsel including Dr. S. Muralidhar, Vikram Chaudhary, Sajan Poovayya and Sandesh J. Chouta, took a different position.
They argued that the petition was not merely a criminal petition under Section 482 CrPC. It invoked the extraordinary constitutional jurisdiction of the High Court under Article 226. Therefore, the scope of constitutional judicial review could not be curtailed simply by describing the ECIR as an internal administrative document.
The petitioners also relied upon Section 2(1)(u) of the PMLA, which defines “proceeds of crime”, and argued that the Supreme Court’s judgment in Vijay Madanlal Choudhary v. Union of India did not create an absolute immunity from judicial review for proceedings originating from an ECIR.
They further relied on the Punjab and Haryana High Court’s decision in Chetan Gupta v. Directorate of Enforcement, where the issue of maintainability of an ECIR challenge had also been considered.
The Court found an important distinction in the earlier judgments rejecting Section 482 challenges. According to the Court, those decisions primarily considered whether an ECIR could be challenged under the inherent jurisdiction under Section 482 CrPC. They did not comprehensively determine whether an ECIR could be examined in exercise of the High Court’s constitutional jurisdiction under Article 226.
A significant part of the judgment concerns the distinction between the form or nomenclature of the ECIR and the consequences flowing from it.
The High Court observed that describing an ECIR as an internal or administrative document does not, by itself, create an absolute barrier against the exercise of constitutional or inherent jurisdiction. According to the Court, an administrative label cannot become a shield against judicial scrutiny where continuation of the action causes injustice or affects the efficacy of judicial orders.
The Court emphasised that “form” cannot eclipse “consequences”. The ECIR may be described as administrative, but proceedings originating from it can lead to searches, seizures, attachment of property, deprivation of liberty and arrest under the PMLA. The Court therefore considered it inconsistent with constitutional principles to allow the nomenclature of the document to determine whether judicial review is available.
The Court also made significant observations regarding the relationship between a predicate or scheduled offence and proceedings under the PMLA.
It observed that the definition of “proceeds of crime” is intrinsically connected with the commission of a criminal offence. In the Court’s formulation, crime constitutes the genesis and proceeds of crime constitute its consequence. Therefore, the Court observed that where the predicate offence itself ceases to exist by reason of discharge, acquittal or acceptance of a closure report, the PMLA proceedings founded upon that offence raise a serious legal question.
This observation is particularly significant in the present case because the underlying criminal investigation had culminated in a ‘B’ report which was subsequently accepted by the jurisdictional court and had attained finality.
However, the Court’s order in the present proceedings should be understood carefully: the Court did not finally quash the ECIR on this ground at this stage. The immediate question before it was whether the petition could be entertained at all.
The High Court extensively considered the Supreme Court’s ruling in Vijay Madanlal Choudhary v. Union of India, particularly its observations distinguishing an ECIR from an FIR.
The Supreme Court had recognised that the PMLA establishes a special statutory mechanism for investigation, attachment and confiscation of proceeds of crime and that there is no statutory requirement under the PMLA equivalent to the mandatory registration and supply of an FIR under Section 154 CrPC. The judgment also described the ECIR as an internal document of the ED.
The Karnataka High Court, however, held that these observations could not be interpreted as eliminating the High Court’s constitutional power of judicial review altogether. The question before it was not merely whether an ECIR was identical to an FIR, but whether its administrative character could prevent a constitutional court from examining the legality of the action and its consequences.
The High Court also highlighted the practical consequences of accepting the ED’s preliminary objection.
If a challenge to the ECIR itself were declared non-maintainable before one roster, while challenges to consequential proceedings were considered maintainable elsewhere, it could result in fragmentation of a single cause of action and potentially produce conflicting judicial decisions. The Court found no justification for such procedural fragmentation.
The Court therefore held that Article 226 cannot be rendered ineffective merely because the document challenged by the petitioner has been given the nomenclature of an ECIR rather than an FIR.
Ultimately, the High Court held that a writ petition invoking Article 226 of the Constitution read with Section 482 CrPC is maintainable for examining the legality of an ECIR as well as the consequential actions founded upon it.
The Court expressly rejected the ED’s preliminary objection and held that the petitioners were entitled to have their challenge examined by the Court.
The Court’s conclusion is significant: “The writ petition invoking Article 226 of the Constitution of India read with Section 482 of the Cr.P.C. is maintainable to examine the legality of an ECIR and every consequential action founded thereon.”
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