The Madras High Court has unequivocally held that when a statutory investigating agency like the Enforcement Directorate shares incriminating material under Section 66(2) of the Prevention of Money Laundering Act, 2002, the jurisdictional police are legally bound to register an FIR without delay or preliminary inquiry. This judgment reinforces the principle that credible, evidence-based disclosures from specialized agencies cannot be subjected to procedural delays under the guise of investigation.
Background & Facts
The Dispute
The case arose from a massive recruitment scam in the Tamil Nadu Municipal Administration and Water Supply (MAWS) Department, involving 2,538 posts for Assistant Engineers and other positions. It was alleged that candidates were selected in exchange for bribes ranging from Rs.25 lakh to Rs.35 lakh per post, facilitated through a systematic scheme using Rs.10 currency notes as identifiers. The Enforcement Directorate, during a search in a bank fraud case, seized voluminous digital and documentary evidence - including WhatsApp chats, call letters, transaction records, and photographs of cash payments - from the residence of Ravichandran, brother of the sitting Minister of MAWS.
Procedural History
- October 27, 2025: Enforcement Directorate shared 232 pages of incriminating material with the Director General of Police under Section 66(2) of the PMLA.
- November 1, 2025: The State Government forwarded the material to the Directorate of Vigilance and Anti-Corruption (DVAC) for preliminary enquiry.
- December 12, 2025: DVAC registered an enquiry but did not register an FIR.
- January 12, 2026: Government granted sanction under Section 17A of the Prevention of Corruption Act.
- February 2026: Two writ petitions were filed - one by a public-spirited individual and another by a sitting Member of Parliament - seeking immediate FIR registration.
Relief Sought
The petitioners sought a writ of mandamus directing the State to register an FIR forthwith and conduct a fair, impartial, and time-bound investigation into the alleged large-scale corruption, invoking the Supreme Court’s ruling in Lalita Kumari v. Government of U.P. and Vijay Madanlal Choudhary v. Union of India.
The Legal Issue
The central question was whether the receipt of detailed, evidence-based information from the Enforcement Directorate under Section 66(2) of the PMLA mandates immediate registration of an FIR under Section 154 of the Code of Criminal Procedure, or whether a preliminary enquiry remains permissible even when the material discloses a cognizable offence.
Arguments Presented
For the Petitioner
The petitioners relied on Lalita Kumari v. Government of U.P. to argue that FIR registration is mandatory whenever information discloses a cognizable offence, and that no preliminary enquiry is permissible in such cases. They emphasized that the Enforcement Directorate’s communication was not a mere complaint but a statutory disclosure of seized evidence, including digital records and cash transaction proofs, which prima facie established offences under the Prevention of Corruption Act and IPC. They further cited Vijay Madanlal Choudhary v. Union of India, which holds that on receipt of such information, the jurisdictional police are obliged to register an FIR.
For the Respondent/State
The State contended that a preliminary enquiry was necessary due to the involvement of high-ranking officials, including a sitting Minister, and that sanction under Section 17A of the Prevention of Corruption Act was required before investigation. They argued that the predicate bank fraud case, from which the evidence was seized, had been quashed, rendering the materials potentially inadmissible. They also invoked Section 173(3) of the Bharatiya Nagarik Suraksha Sanhita, 2023, asserting that it permits preliminary enquiry for offences punishable with 3 - 7 years, and that the Vigilance Department’s ongoing enquiry was lawful and sufficient.
The Court's Analysis
The Court undertook a comprehensive review of the Supreme Court’s jurisprudence on FIR registration, beginning with Lalita Kumari v. Government of U.P., which established that Section 154 of the CrPC imposes a mandatory duty to register an FIR upon receipt of information disclosing a cognizable offence. The Court emphasized that the legislature deliberately omitted qualifiers like “reasonable” or “credible” in Section 154, distinguishing it from provisions governing arrest.
"The expression under Section 154(1) of the Code is not qualified by the prefix ‘reasonable’ or ‘credible’. The non-qualification of the word ‘information’ in Section 154(1) unlike in Sections 41(1)(a) and (g) of the Code is for the reason that the police officer should not refuse to record any information relating to the commission of a cognizable offence on the ground that he is not satisfied with the reasonableness or credibility of the information."
The Court then examined the recent decisions in State of Karnataka v. T.N. Sudhakar Reddy and State of Karnataka v. Sri Channakeshava.H.D., which clarified that while preliminary enquiry may be desirable in corruption cases, it is not mandatory and cannot be used to delay FIR registration indefinitely. The Court held that the mere existence of a source information report containing detailed evidence negates the need for preliminary enquiry.
Crucially, the Court analyzed Section 66(2) of the PMLA, which mandates that if the Director of Enforcement forms an opinion - based on material in possession - that another law has been contravened, he shall share the information with the concerned agency for necessary action. The Court interpreted this as a statutory command, not a discretionary recommendation. Citing Vijay Madanlal Choudhary, the Court held:
"On receipt of such information, the jurisdictional police would be obliged to register the case by way of FIR if it is a cognizable offence."
The Court rejected the State’s reliance on Imran Pratapgadhi v. State of Gujarat and Section 173(3) of BNSS, noting that BNSS applies to complaints received directly by police stations, not to statutory disclosures from specialized agencies. The Court further dismissed the argument that the quashing of the bank fraud case invalidated the evidence, observing that the seized materials pertained to a distinct offence - the recruitment scam - and were independently sufficient.
The Court condemned the 3.5-month delay as a disguised attempt to shield influential persons, stating that the Vigilance Department’s enquiry had morphed into a mini-trial, contrary to the limited scope of preliminary inquiry permitted under Lalita Kumari. The Court held that the burden of verifying credibility lies with the investigating agency after FIR registration, not before.
The Verdict
The petitioner in W.P.(Crl.) No.74 of 2026 succeeded. The Court held that FIR registration is mandatory upon receipt of detailed, evidence-based disclosures under Section 66(2) of the PMLA, and that no preliminary enquiry is permissible in such cases. The Directorate of Vigilance and Anti-Corruption was directed to forthwith register an FIR and conduct an expeditious investigation.
What This Means For Similar Cases
Statutory Disclosures Trigger Mandatory FIR Registration
- Practitioners must now treat any formal disclosure under Section 66(2) of the PMLA as a trigger for immediate FIR registration, irrespective of the nature of the predicate offence.
- Police cannot demand additional verification, seek sanction under other statutes, or initiate preliminary enquiry before registration.
- Delay beyond 14 days in such cases invites judicial intervention under Article 226.
Preliminary Enquiry Cannot Be a Shield for Inaction
- The Court has closed the loophole allowing agencies to use “preliminary enquiry” as a tool to delay investigations in high-profile corruption cases.
- Where evidence is voluminous and sourced from a statutory agency, the police must register the FIR and investigate - not adjudicate.
- Any refusal to register an FIR under such circumstances is a violation of Section 154 CrPC and Section 66(2) PMLA, and may attract contempt or disciplinary action.
Evidence from One Agency Can Sustain FIR in Another Domain
- Materials seized in a money laundering probe can form the basis for FIRs under the Prevention of Corruption Act, IPC, or other statutes, even if the original case is quashed.
- The Court affirmed that the purpose of the evidence determines its relevance, not the outcome of the parent investigation.
- Practitioners should argue that corroborative evidence from specialized agencies like ED, CBI, or SEBI carries greater weight than ordinary complaints and must be acted upon immediately.
