Karnataka HC stays ED action against Embassy Group chairman in PMLA case

The High Court of Karnataka on Friday has stayed all further proceedings initiated by the Directorate of Enforcement against Jitendra Mohandas Virwani, Chairman of the Embassy Group, in a case registered under the Prevention of Money Laundering Act (PMLA), 2002.

The interim protection was granted by Justice Mohammad Nawaz while hearing Criminal Petition, filed under Section 482 of the Criminal Procedure Code (corresponding to Section 528 of the Bharatiya Nagarik Suraksha Sanhita).

The petition assails the Enforcement Case Information Report (ECIR) dated March 25, 2025, along with consequential summons issued by the ED.

During the hearing, the Court was informed that the ED proceedings had their genesis in an FIR registered at Hoskote Police Station for alleged offences under various provisions of the Indian Penal Code.

 

However, after completion of the investigation, the police filed a 'B' final report, seeking closure of the case. Counsel for the petitioners argued that once the predicate offence itself stood closed, the very foundation for continuing proceedings under the PMLA ceased to exist.

It was further submitted that coordinate benches of the High Court, in similar circumstances, had held that PMLA proceedings cannot survive independently once the underlying criminal case is closed, and that such views have also been affirmed by the Supreme Court. Relying on these precedents, the petitioners sought interim protection from coercive action.

Accepting the submissions at the preliminary stage, the High Court overruled office objections, directed issuance of notice to the State of Karnataka and other respondents, and ordered that all consequential proceedings arising out of the impugned ECIR shall remain stayed until the next date of hearing.