PMLA30 August 2026

Can ED Combine Multiple Predicate FIRs Through ECIR Addenda? The Unresolved PMLA Questions Before the Karnataka High Court

By C&C Law Chambers Editorial Desk · 4 reads

The dispute before the Karnataka High Court in Puppys Tours and Travels LLP v Union of India raises a foundational question about money-laundering investigations: when alleged proceeds are traced to several FIRs, transactions and States, may the Enforcement Directorate place them within one existing ECIR by successive addenda, or must each legally distinct scheduled-offence foundation be examined separately?

At the hearing reported on 12 March 2026 in W.P. No. 964 of 2026 and connected matters, the Court heard competing submissions on that issue. The petitioners also challenged search, seizure, freezing and retention measures, the continued existence of scheduled offences, territorial jurisdiction and the composition of the PMLA Adjudicating Authority. The Court’s questions and oral observations at that stage were not a final judgment. An issue raised from the Bench identifies a problem for adjudication; it does not itself settle the law.

The controversy

The ECIR was stated to have been recorded in July 2025 in an investigation concerning alleged online betting and gambling activity connected with the KING567 platform. According to the petitioners’ submissions, the original ECIR drew upon FIRs registered over many years and some matters had already been closed. They alleged that FIRs from other locations were later introduced through addenda, including matters from Hyderabad, Bhopal and Harohalli.

The petitioners argued that PMLA speaks of property derived or obtained from criminal activity relating to a scheduled offence. On that reading, the connection between particular criminal activity and the property said to be its proceeds cannot be replaced by administrative aggregation of unrelated FIRs. They contended that combining transactions from different States could obscure both the statutory nexus and territorial accountability.

ED’s response, as reported at the hearing, was that an ECIR is an internal administrative document and that a laundering investigation is directed to proceeds of crime rather than confined by police-station boundaries. ED maintained that the alleged online network and flow of funds connected the transactions, and that at least one scheduled-offence matter continued to survive.

The statutory starting point

Section 2(1)(u) PMLA defines proceeds of crime through a relational test. The property must be derived or obtained, directly or indirectly, as a result of criminal activity relating to a scheduled offence, or represent the value of such property within the statutory definition. Section 3 then addresses a process or activity connected with those proceeds, including concealment, possession, acquisition, use, projecting or claiming the property as untainted.

This structure produces two connected inquiries. First, what scheduled criminal activity is alleged, and what property was generated from it? Second, what process or activity involving that property is attributed to the person proceeded against? A large flow of unexplained money does not become proceeds of crime merely because its source appears suspicious.

In Vijay Madanlal Choudhary v Union of India, 2022 SCC OnLine SC 929, the Supreme Court explained at paragraphs 251 and 253 that the expression must be construed by reference to property derived or obtained from criminal activity relating to a scheduled offence. At paragraphs 281 to 284, the Court held that section 3 depends on illegal gain from such criminal activity, although the distinct process connected with the property constitutes money laundering. Paragraph 467(v)(d) also rejects prosecution on a merely notional assumption that a scheduled offence has been committed.

That principle does not itself answer whether one ECIR may contain several scheduled offences. It does require ED to preserve a legally intelligible chain for each component: the scheduled criminal activity, the property allegedly produced by it, and the laundering process connected to that property.

One scheme or unrelated transactions?

The decisive distinction may be between several FIRs describing one integrated laundering architecture and several FIRs concerning genuinely independent transactions.

If different FIRs record parts of the same alleged enterprise, common actors, one platform, linked fund flows and a continuous method of concealment, procedural coordination may serve efficiency without weakening the statutory nexus. If the FIRs concern different victims, periods, actors, alleged offences and property, placing them in one ECIR could make the case broader while making each proceeds-of-crime link less precise.

The ECIR’s status as an internal document cannot alone resolve that distinction. An internal document need not mirror an FIR, but executive form cannot enlarge substantive power. Search under section 17, provisional attachment under section 5, and retention and adjudication under section 8 must still rest on the conditions enacted by Parliament.

Territorial jurisdiction after Rana Ayyub

ED relied upon Rana Ayyub v Directorate of Enforcement, (2023) 4 SCC 357. That judgment is important, but its precise scope must be respected.

At paragraphs 20 to 29, the Supreme Court described PMLA’s two-track structure: attachment and adjudication concerning property, and prosecution before the Special Court. Paragraphs 36 to 40 explain that territorial jurisdiction may arise where alleged proceeds are acquired, possessed, concealed or used. Money laundering can therefore have legally relevant acts and consequences in more than one State.

Rana Ayyub does not expressly decide whether unrelated scheduled-offence FIRs may be introduced through addenda to one ECIR. It addresses the territorial jurisdiction of the Special Court and recognises that jurisdictional facts may depend on evidence. It supports the proposition that laundering activity is not confined to the place where the predicate FIR was registered; it does not eliminate the need for a real territorial and transactional nexus.

The live-predicate-offence question

The hearing also exposed a timing problem. What was the scheduled-offence foundation when the ECIR was first recorded? What is the effect if an original FIR had already ended, but another FIR was added later? And what follows if a closure report has been filed but not yet accepted by the competent court?

Vijay Madanlal requires a registered or pending scheduled-offence foundation and treats final discharge, acquittal or quashing as legally significant for proceedings linked to that offence. But a police closure report awaiting judicial consideration is not necessarily equivalent to final judicial acceptance.

The answer also depends on whether the later FIR concerns the same alleged proceeds. A surviving but unrelated scheduled offence cannot automatically supply the missing foundation for property allegedly generated by a different, extinguished transaction. The proceeds-to-offence nexus must be demonstrated, not borrowed.

Search, seizure and section 8

The petitioners challenged the seizure of cash and digital devices and the freezing of bank accounts on the ground that the assets were not shown to be linked to proceeds of crime. ED responded that these objections should be placed before the Adjudicating Authority under section 8.

Statutory adjudication is important, but its availability does not make every jurisdictional challenge premature. A distinction is necessary between a factual dispute about whether particular property is tainted and a foundational challenge alleging absence of statutory power, a live scheduled offence, recorded reasons or a lawfully constituted authority. Courts ordinarily show restraint where the Act provides an effective remedy, yet a remedy before a body whose jurisdiction or composition is itself challenged presents a different question.

Composition of the Adjudicating Authority

Section 6 creates the Adjudicating Authority and prescribes qualifications associated with law, administration, finance or accountancy. The petitioners contended that the functioning composition did not satisfy the statutory design, and the Court sought further information.

This issue cannot be decided through assumptions about titles or professional background. The final inquiry must examine the applicable statutory text, appointment notifications, allocation of business, quorum provisions and the nature of the proceeding. Until those materials are adjudicated, it would be inaccurate to describe the Authority as either validly or invalidly constituted.

Current criminal-code orientation

The FIR allegations reportedly included section 420 IPC. For post-1 July 2024 orientation, the closest current provision is section 318(4) of the Bharatiya Nyaya Sanhita, 2023. That cross-reference does not alter the law governing historical conduct and does not imply that the provisions are textually identical. References in older judgments to the CrPC remain historically correct; the Bharatiya Nagarik Suraksha Sanhita, 2023 now governs criminal procedure subject to its commencement and savings provisions.

What the eventual judgment must clarify

A reasoned final decision could provide guidance on five points:

1. Whether PMLA permits an ECIR addendum and, if so, what legal limits govern it. 2. Whether the test is a common laundering scheme, common proceeds, common actors or another transactional nexus. 3. How territorial jurisdiction should be assessed where scheduled offences and alleged laundering acts span several States. 4. What procedural status a scheduled offence must have when the ECIR is recorded and coercive measures are taken. 5. Whether challenges to foundational jurisdiction must await section 8 adjudication.

Conclusion

The case is significant because administrative convenience and statutory nexus are not the same thing. PMLA can address sophisticated money flows crossing institutional and State boundaries, but its breadth remains tied to identifiable proceeds of crime and identifiable scheduled criminal activity. A single ECIR may be administratively convenient; legality will depend on whether it preserves, rather than obscures, those connections.

As of the reported 12 March 2026 hearing, the Karnataka High Court had raised and heard these questions but had not finally decided them. Any account must therefore distinguish the parties’ submissions and the Court’s oral inquiries from binding reasons that can emerge only in a final judgment.

Sources

Puppys Tours and Travels LLP v Union of India, W.P. No. 964 of 2026 and connected matters, Karnataka High Court, hearing dated 12 March 2026.

Vijay Madanlal Choudhary v Union of India, SLP (Crl.) No. 4634 of 2014 and connected matters, decided 27 July 2022, 2022 SCC OnLine SC 929: https://webapi.sci.gov.in/supremecourt/2014/19062/19062_2014_3_1501_36844_Judgement_27-Jul-2022.pdf

Rana Ayyub v Directorate of Enforcement, W.P. (Crl.) No. 12 of 2023, decided 7 February 2023, (2023) 4 SCC 357: https://api.sci.gov.in/supremecourt/2023/1847/1847_2023_15_1501_41710_Judgement_07-Feb-2023.pdf

Prevention of Money-Laundering Act, 2002: https://upload.indiacode.nic.in/showfile?actid=AC_CEN_2_2_00035_200315_1517807326550&filename=a2003-15.pdf&type=actfile

Bharatiya Nyaya Sanhita, 2023: https://www.indiacode.nic.in/bitstream/123456789/20062/1/a2023-45.pdf

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