Court finds Enforcement Directorate's shared material prima facie discloses cognizable offences and censures Punjab Police's inaction; orders immediate FIR registration and fair probe by CBI amid allegations of shielding senior officials
Chandigarh, 5 October 2026 - In a significant judgment delivered by the Punjab and Haryana High Court (Division Bench comprising Chief Justice Ashwani Kumar Mishra and Justice Rohit Kapoor), the Court has upheld the maintainability of a Public Interest Litigation (PIL) filed by advocate Nikhil Saraf, concerning alleged corruption involving senior State officials of Punjab. The Court ordered the Central Bureau of Investigation (CBI) to take over the probe, register an FIR immediately, and conduct a fair and transparent investigation.
The PIL stemmed from voluminous material shared by the Enforcement Directorate (ED) under Section 66(2) of the Prevention of Money Laundering Act (PMLA), 2002, exposing alleged scams including "cash for transfers," "cash for tenders," manipulation in policy framing, arms license facilitation, land transaction irregularities, and leakage of confidential government documents. The ED's communication implicated senior Punjab officials, including those posted in the office of the Chief Minister, such as Rajbir Ghuman, Officer on Special Duty (OSD). Despite receiving this information, the Punjab Police failed to register an FIR for over two months, citing illegibility of documents and conducting a preliminary inquiry that the Court found unsatisfactory.
The State government challenged the PIL's maintainability, arguing that the petitioner was a "stranger" with no locus standi, running a commercial farm stay with disputed credentials, and that the PIL was politically motivated. The petitioner, however, submitted detailed affidavits proving his credentials as a practicing advocate and public-spirited person engaged in governance, judicial reforms, and institutional accountability for over seven years. The Court accepted these credentials, dismissing objections related to the petitioner's commercial activities and prior PIL dismissals on different grounds.
On the legal question regarding the effect of information sharing under Section 66(2) of PMLA, the Court held that once the ED forms an opinion, based on material in its possession, that an offence under any law has been committed, it must share such information with the concerned agency for necessary action. The Court emphasized that this "necessary action" includes registration of an FIR if the information discloses a cognizable offence, as mandated by Section 173 of the Bharatiya Nagarik Suraksha Sanhita, 2023 (corresponding to Section 154 CrPC). The judgment reiterated the binding Supreme Court precedent laid down in Lalita Kumari v. Uttar Pradesh (2014) that registration of FIR is compulsory upon receipt of information disclosing commission of a cognizable offence, subject only to limited preliminary inquiry in exceptional cases.
Examining the facts, the Court found the Punjab Police's conduct "a journey with all travel and no reaching." Despite multiple discussions, notices issued to implicated persons, and assessment meetings, no FIR had been registered. The Police's claim of illegible documents was undermined by their issuance of notices based on those same documents. The Court expressed serious concern that the delay was being used to shield high-ranking officers and manipulate evidence. The Court also noted the suspicious timing of the State's order to demolish the petitioner's farm stay shortly after filing the PIL, which suggested retaliatory vindictiveness.
Rejecting the State's objections, the Court held the PIL maintainable as it raised issues of vital public importance involving governance and corruption in high public office. It recognized the petitioner's bona fide public interest motive and dismissed attempts to discredit him based on unrelated commercial disputes or prior PIL dismissals.
Consequently, the Court directed the CBI to register the FIR forthwith and investigate the matter independently. The Punjab Police and State were ordered to extend all assistance to the CBI. The CBI was also instructed to submit a status report within two months. The matter is listed for further hearing on 7 December 2026.
This judgment underscores the judiciary's proactive role in ensuring accountability in public office and preventing shielding of high-ranking officials from investigation. It clarifies the scope of enforcement agencies' powers under PMLA Section 66(2) and reinforces the mandatory nature of FIR registration upon receipt of credible information about cognizable offences.
Bottom Line:
Public Interest Litigation - Maintainability - Advocate-petitioner held to be a public-spirited person despite objections to credentials - Information shared by Enforcement Directorate under Section 66(2) of Prevention of Money Laundering Act, 2002, disclosing prima facie cognizable offences involving corruption in high public office, required necessary action - In peculiar facts, failure of Punjab Police to register FIR and manner of preliminary inquiry justified transfer of investigation to CBI - CBI directed to register FIR and investigate.
Statutory provision(s):
Prevention of Money Laundering Act, 2002 Section 66(2), Bharatiya Nagarik Suraksha Sanhita, 2023 Section 173 (corresponding to CrPC Section 154), Lalita Kumari v. Government of Uttar Pradesh (2014) 2 SCC 1 (precedent), Prevention of Corruption Act, 1988 (Section 17-A referenced), Bharatiya Sakshya Adhiniyam, 2023 Section 63 (admissibility of electronic evidence)
Nikhil Saraf v. State of Punjab, (Punjab And Haryana)(DB) : Law Finder Doc Id # 2991140
