Karnataka High Court Quashes ED Complaint In Milk-Union Job Scam Over Predicate Offence Rule

On 7 November 2026, the Karnataka High Court quashed an Enforcement Directorate complaint linked to alleged recruitment irregularities in a milk union. The court said the Prevention of Money Laundering Act, PMLA, does not allow the agency to file a private complaint over predicate offences. Its jurisdiction, the bench said, depends on a scheduled offence.

At issue was whether that complaint could stand where it concerned the predicate offence itself. The Directorate had filed it in connection with the alleged job scam. It could not, the order said.

According to the bench, the PMLA gives the Directorate no power to start criminal process for a predicate offence through a private complaint. It can act only where a scheduled offence anchors its jurisdiction. A predicate offence, the court said, must exist on its own; the agency cannot create or pursue one through its own complaint.

ED cannot file private complaint

The order said the Directorate cannot assume powers the law has not expressly given. Filing a private complaint for the predicate offence went beyond the statute, the court said. Jurisdiction under the PMLA 2002 Act must be traced to the law as written; what the statute does not allow, the agency cannot adopt on its own.

Allegations about milk-union recruitment did not change that limit, the court made clear. They did not by themselves expand the agency's authority. Authority, the bench said, had to flow from a predicate offence within the meaning of the PMLA bare act, not from the agency's own complaint. The decision keeps the agency's role within the boundary fixed by Parliament.

With that complaint quashed, the criminal process it sought to start does not survive against those named in it. The agency cannot proceed further on the strength of that private complaint. Any money-laundering action would still need a subsisting scheduled offence, as required by the court's reading of the law.