SRINAGAR, Aug 25: The High Court has upheld an investigation into a money-laundering case arising from alleged corruption in a project involving construction and dredging works at Hokersar Wetland as valid.
Justice Sanjay Dhar upheld the jurisdiction of the Enforcement Directorate (ED) to investigate the corruption in a project.
Justice Dhar dismissed a petition filed by M/s Reach Dredging Limited, challenging the summons issued by the ED and the underlying Enforcement Case Information Report (ECIR).
The case relates to an e-NIT issued in July 2018 by the Executive Engineer, Flood Spill Channel, Narbal, for construction of a channel across Hokersar Wetland along the old alignment, including side-slope protection and dredging of drainage and escape channels flowing into the wetland.
Reach Dredging, whose bid was found to be the lowest, was awarded the work in 2019 and completed it in 2020, as per the pleadings.
Subsequently, the Anti-Corruption Bureau registered a case (FIR No. 7/2025) under Section 5(1)(d) of the J&K Prevention of Corruption Act and Section 120-B of the RPC. The company later received summons from the ED under Section 50 of the Prevention of Money Laundering Act (PMLA).
The company argued that the alleged offence under Section 5(1)(d) of the J&K Prevention of Corruption Act was not a scheduled offence under the PMLA after Section 13(1)(d) of the Central Prevention of Corruption Act was omitted through the 2018 amendment. It contended that the ED consequently lacked jurisdiction to register the ECIR or issue summons.
The ED opposed the plea, maintaining that Section 5(1)(d) of the J&K law corresponds to the amended Section 7 of the Central Prevention of Corruption Act, which is a scheduled offence under the PMLA.
The Court rejected the company’s contention, holding that the 2018 amendment, which omitted Section 13(1)(d) of the Central Prevention of Corruption Act, did not remove the corresponding offence from the statutory framework. Rather, the court said, the amended Section 7 was made comprehensive enough to cover conduct previously dealt with under Section 13(1)(d).
The Court observed that amended Section 7 covers cases where a public servant obtains or accepts an undue advantage by abusing his position or through corrupt or illegal means, thereby corresponding to Section 5(1)(d) of the J&K Prevention of Corruption Act.
Since the amended Section 7 of the Central Prevention of Corruption Act is included in the PMLA Schedule, the Court held that an offence under Section 5(1)(d) of the J&K Prevention of Corruption Act also qualifies as a scheduled offence by virtue of Section 2(2) of the PMLA.
Accordingly, the court held that the ED had jurisdiction to issue summons and register the ECIR against Reach Dredging Limited. Finding no merit in the petition, the Court dismissed the plea.
