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PMLA court accepts ED closure report in ₹10-cr corporate fraud case
A Mumbai special court under the PMLA accepted the ED closure report in a money-laundering case linked to an alleged ₹10-crore corporate fraud, stating that the prosecution cannot survive once the predicate offence ended in compromise and acquittal. The court noted the derivative nature of PMLA and cited a Supreme Court ruling in support of closing the case. The ED closure effectively ends the ECIR in this matter.
Why It Matters
This decision highlights the dependence of money-laundering proceedings on the status of the predicate offence and how acquittal can derail ED investigations in similar cases.
Timeline
5 Events
ED closure report accepted by PMLA court
April 25, 2026
The special PMLA court in Mumbai accepted the ED’s closure report in the money-laundering case, holding that no offence of money-laundering was made out since the predicate offence ended in acquittal; it ordered ECIR closure and noted the derivative nature of PMLA.
Magistrate allows compounding and acquits directors
January 2022
In January 2022, the jurisdictional magistrate allowed compounding of the scheduled offences after recording a settlement between the complainant company and the accused directors, and acquitted them under section 320(8) of the CrPC. No appeal was filed against this order.
ED registers ECIR in money-laundering case
February 23, 2021
Based on the FIR, the Enforcement Directorate registered an ECIR on February 23, 2021 to probe the alleged laundering of diverted funds, drawing on a forensic audit that flagged irregular transfers and misappropriation exceeding ₹10 crore.
Charge-sheet filed in criminal case
October 2020
A charge-sheet was filed in October 2020 in the criminal case.
FIR registered against OTISPL directors
May 14, 2019
An FIR was registered at Khalapur police station alleging cheating, criminal breach of trust, forgery and conspiracy by Indian directors of Oil Tools International Services Pvt Ltd (OTISPL). The complaint accused the directors of altering the shareholding pattern to dilute the foreign promoter’s stake from 84.98% to 22%, removing him from directorship, and siphoning funds through shell entities, causing losses running into crores.