Introduction
The Punjab and Haryana High Court has directed the Central Bureau of Investigation (CBI) to register an FIR and conduct an investigation into allegations concerning corruption and other illegal activities involving senior public officials in Punjab. The Court held that the material shared by the Enforcement Directorate (ED) with the Punjab Police under Section 66(2) of the Prevention of Money Laundering Act, 2002 disclosed, prima facie, the commission of cognizable offences and raised an issue of substantial public importance.
The judgment is significant for another reason. The Court clarified that when the ED shares information under Section 66(2) of the PMLA with the jurisdictional police and the information discloses a cognizable offence, the receiving agency cannot indefinitely delay the initiation of criminal investigation. The Court also held that, in appropriate cases involving a matter of vital public interest, a public-spirited person can approach the High Court through a PIL even though the ED may have other remedies available in law.
The Court ultimately concluded that a fair and transparent investigation was necessary and entrusted the investigation to the CBI. The CBI was directed to register an FIR and proceed with the investigation forthwith.
Case Details
| Particular | Details |
|---|---|
| Case Name | Nikhil Saraf v. State of Punjab and Others |
| Case Number | CWP-PIL-238-2026 (O&M) |
| Court | High Court of Punjab and Haryana at Chandigarh |
| Date of Judgment | 5 October 2026 |
| Bench | Ashwani Kumar Mishra, Chief Justice and Rohit Kapoor, J. |
| Petitioner | Nikhil Saraf |
| Respondents | State of Punjab and Others |
| Nature of Case | Public Interest Litigation |
| Important Provision | Section 66(2), Prevention of Money Laundering Act, 2002 |
| Other Important Provision | Section 173, Bharatiya Nagarik Suraksha Sanhita, 2023 |
| Final Relief | CBI directed to register FIR and investigate |
The judgment records that it was reserved on 14 September 2026 and pronounced on 5 October 2026.
Background and Facts of the Case
The PIL was filed by Nikhil Saraf, a practising advocate before the Punjab and Haryana High Court. The petition raised allegations concerning the involvement of senior officials of the State of Punjab in various alleged scams, including alleged cash-for-transfer arrangements, monetary considerations for favourable policies, tender-related irregularities and other activities involving alleged corruption in public office.
The petitioner relied substantially upon information that had allegedly been shared by the Enforcement Directorate with the Punjab Police. According to the petition, despite the ED communicating material to the State authorities and seeking appropriate action, no FIR had been registered for a considerable period.
The allegations were particularly significant because they concerned persons occupying senior positions in the State administration. The Court noted that the ED material related, among other things, to alleged influence over transfers and postings, government policies, tenders, arms licences, land-related matters and government approvals.
The ED Communication Under Section 66(2) of the PMLA
The ED sent a communication dated 30 July 2026 to the Director General of Police, Punjab. The communication was expressly described as a reference under Section 66(2) of the PMLA for registration of an FIR.
According to the material placed before the Court, the ED had conducted searches in connection with a PMLA investigation and recovered documents and other material. The ED referred to WhatsApp communications and other material allegedly showing the involvement of Nitin Gohal in transfers, postings, collection of money and coordination with other individuals.
The ED also referred to alleged proceeds of crime in the form of cash, land and other benefits. The communication contained 26 annexures running into more than 150 pages.
The ED further referred to alleged interference in government policy formulation, amendments to departmental rules, administrative approvals, tender conditions, licensing matters and other government decisions. It also referred to alleged access to confidential government information and communications relating to land transactions and government approvals.
What Happened After the ED Shared the Information?
The Court noted that the ED communication dated 30 July 2026 was received by the office of the Director General of Police, Punjab. A reminder was subsequently sent by the ED.
However, no FIR was registered during the period in question. The Punjab Police subsequently stated that it had begun examining and assessing the material.
The Punjab Bureau of Investigation claimed that several steps had been taken, including examining the ED communication, issuing notices to individuals, seeking information from government departments and examining the legal implications of the material.
The police also raised concerns regarding the legibility and authenticity of certain electronic material and requested clearer documents and relevant source material from the ED.
Objection to the Maintainability of the PIL
The State of Punjab strongly opposed the PIL.
It argued that the petitioner was a stranger to the communication exchanged between the ED and the Punjab Police and therefore had no locus to seek registration of a criminal case. The State also questioned the petitioner’s credentials and referred to earlier PILs filed by him.
The State argued that the ED itself could take appropriate legal steps if it believed that an FIR was required. It further contended that the Punjab Police was examining the material received from the ED and that additional time was necessary.
The State also disputed the petitioner’s allegation that proceedings concerning his farm stay were initiated as retaliation for filing the PIL.
The Court’s View on the Petitioner’s Credentials
The High Court examined the petitioner’s credentials in detail.
The petitioner had placed before the Court material showing his involvement in public-interest issues relating to governance, judicial and police reforms, gender justice and institutional accountability. He had also filed several PILs concerning different public causes.
The Court ultimately held that the petitioner had sufficiently established his credentials as a public-spirited person. It also held that the mere fact that two earlier PILs filed by him had not been entertained did not prevent him from maintaining the present PIL because those cases were decided on their own facts.
The Court further rejected the argument that the petitioner’s operation of a farm stay automatically discredited his credentials. Although the Court noticed the proceedings concerning the farm stay, it held that the existence of such a commercial activity was not by itself sufficient to defeat the PIL where the cause raised was otherwise of substantial public importance.
Whether the PIL Raised a Genuine Public Interest
The Court found that the allegations involved matters of significant public importance.
The material shared by the ED concerned alleged corruption relating to transfers, government policies, tenders, arms licences and accumulation of wealth by allegedly dubious means. Since the allegations concerned senior public officials, the Court considered them serious.
The Court observed that inaction by the State or Punjab Police in dealing with such allegations, despite the information having been shared by the ED, itself constituted an issue of vital public interest.
The Court therefore concluded that the PIL was maintainable.
Section 66(2) of the PMLA and the Duty of the Receiving Agency
One of the central questions before the Court was whether Section 66(2) of the PMLA merely permits the ED to share information with another agency or whether such information must result in appropriate criminal action when it discloses a cognizable offence.
Section 66(2) provides that where the Director or another specified authority forms an opinion, on the basis of information or material in its possession, that provisions of another law have been contravened, the information is to be shared with the concerned agency for necessary action.
The Court explained that the formation of an opinion based upon information or material in the possession of the competent authority is the condition that triggers Section 66(2). Once that statutory condition is satisfied, the information has to be shared with the concerned agency for necessary action.
What Does “Necessary Action” Under Section 66(2) Mean?
The Court gave considerable importance to the expression “necessary action”.
According to the Court, the object of Section 66(2) is to activate the process of investigation by the concerned agency because the ED itself is not authorised to investigate every offence under other laws merely because it discovers material indicating their violation.
The information shared under Section 66(2), therefore, is intended to activate the criminal-law process before the competent agency. The Court held that where the information discloses a cognizable offence, registration of an FIR is ordinarily the appropriate starting point for investigation.
Section 173 BNSS and Registration of FIR
The Court connected Section 66(2) of the PMLA with Section 173 of the Bharatiya Nagarik Suraksha Sanhita, 2023, which corresponds to Section 154 of the CrPC.
The Court relied upon the Constitution Bench judgment in Lalita Kumari v. Government of Uttar Pradesh, (2014) 2 SCC 1, concerning registration of FIRs upon information disclosing a cognizable offence.
The purpose of an FIR is not merely administrative. It sets the criminal process in motion and records the earliest information relating to the alleged commission of an offence. This also helps prevent subsequent embellishment and provides an element of transparency and judicial oversight.
Can a Preliminary Inquiry Be Conducted Instead of Registering an FIR?
The Court recognised that Lalita Kumari permits a limited preliminary inquiry in appropriate situations, particularly where the information does not clearly disclose a cognizable offence or where the nature of the allegations warrants such an inquiry.
However, the Court emphasised that if the information ex facie discloses a cognizable offence, registration of an FIR is mandatory. Questions regarding the truthfulness or credibility of the allegations are ordinarily matters for investigation rather than a reason to indefinitely postpone registration of the FIR.
The Court therefore held that the question whether information shared by the ED under Section 66(2) discloses a cognizable offence remains a factual question in each case. Where such an offence is disclosed, an FIR ordinarily has to follow.
Reliance on Vijay Madanlal Choudhary
The Court also considered Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1.
The judgment noted the Supreme Court’s observation that where material discovered during a PMLA investigation is shared with the jurisdictional police under Section 66(2) and a cognizable scheduled offence is disclosed, the jurisdictional police would be obliged to register the case by way of an FIR.
The Punjab and Haryana High Court therefore considered the registration of an FIR by the jurisdictional police to be the natural consequence where the information shared by the ED disclosed a cognizable offence.
Why the Court Rejected the State’s Reliance on Other High Court Decisions
The State relied upon decisions including V. P. Nandakumar v. Deputy Director, Directorate of Enforcement, Harish Fabiani v. Enforcement Directorate, R.K.M. Powergen (P) Ltd. v. Directorate of Enforcement and Angad Singh Makkar v. Union of India.
The High Court distinguished the authorities relied upon by the State on the basis of their factual context.
In particular, the Court noted that the Kerala High Court decision relied upon by the State concerned a situation where the FIR constituting the predicate offence had already been quashed. The controversy in that case was therefore different from the issue before the Punjab and Haryana High Court.
The Court’s Assessment of the Punjab Police Investigation
The Court closely examined the chronology provided by the Punjab Police.
The police had stated that it examined the ED communication, discussed the material with law officers, issued notices to various individuals, sought information from several departments and examined the legal implications of the material.
However, the Court was not satisfied with this approach.
The Court observed that the process appeared to have involved extensive preliminary activity without reaching the point of registering an FIR and commencing a criminal investigation. The Court described the process as a “journey with all travel and no reaching.”
Court Finds the Delay in Registration of FIR Significant
The Court noted that the ED had shared the relevant information with the Punjab Police on 30 July 2026 and that approximately two months had passed without registration of an FIR.
The Court was particularly concerned that the preliminary process continued despite the material allegedly disclosing serious allegations involving senior public officials.
The Court observed that the petitioner’s apprehension that the delay could facilitate distortion of evidence or shielding of senior officials could not be completely brushed aside.
Concerns Regarding the Police’s Handling of the Material
The Court also found inconsistencies in the explanation offered by the Punjab Police.
The police had stated that some documents supplied by the ED were illegible. At the same time, the police had already issued notices to persons whose names appeared in the material and had taken several other steps based upon that material.
The Court questioned why clarification regarding illegible material was sought only after approximately a month of deliberations and notices.
It observed that the circumstances lent support to the petitioner’s apprehension that time was being consumed in a manner that could potentially affect the evidence or facilitate attempts to shield persons against whom allegations had been made.
The Material Recovered During the ED Investigation
The judgment also considered statements and other material gathered by the ED.
One important part concerned statements made by Nitin Gohal during the ED proceedings. Questions were put to him regarding communications received from government officials concerning transfers and postings.
The material also referred to requests concerning government tenders, licences, policy changes and other official matters.
The Court did not finally determine the guilt or innocence of any individual. Instead, it considered the material for the limited purpose of deciding whether the allegations disclosed sufficient grounds for a proper criminal investigation.
The Court also noted material concerning alleged sharing of confidential government documents and requests relating to government policies.
The Court Did Not Decide the Guilt of the Persons Named
An important aspect of the judgment is that the High Court did not conduct a trial or make a final finding that the alleged corruption had actually occurred.
The Court repeatedly treated the allegations and material as prima facie material requiring investigation.
It specifically observed that the merits of the allegations could be examined during investigation and trial and that it was not expressing a definite opinion on the ultimate truth of those allegations.
Thus, the judgment should not be understood as a finding of criminal guilt against the persons referred to in the ED material.
The Alleged Action Against the PIL Petitioner
The petitioner had also alleged that he was being targeted after filing the PIL.
The record showed that proceedings concerning his farm stay had existed since 2024. However, the Court noted that a demolition-related action was taken shortly after the filing of the present PIL.
The Court did not decide the legality of the petitioner’s construction. Nevertheless, it found the timing and manner of the action significant and observed that the sequence created doubts regarding the intention of the State authorities.
Later, the Court observed that the demolition order appeared to have followed soon after the PIL and that the speaking order had not been produced before the Court. It stated that the circumstances created doubt regarding the intent of senior State officers against whom the petitioner had raised corruption allegations.
Ratio Decidendi
The central legal principle emerging from the judgment is that when the Enforcement Directorate, acting under Section 66(2) of the PMLA, shares information and material with the jurisdictional police indicating the commission of a cognizable offence, the receiving police agency is ordinarily required to initiate the criminal process by registering an FIR and conducting an investigation.
A preliminary inquiry may be justified where the information does not disclose a cognizable offence. However, where the material prima facie discloses such an offence, prolonged preliminary examination cannot substitute the investigation contemplated by criminal law.
The Court further held that a genuine public-interest petitioner can approach the High Court where inaction concerning serious allegations against persons holding high public office raises an issue of substantial public importance. The Court’s intervention, however, was based on the peculiar facts and circumstances of this case.
Important Legal Provisions
Section 66(2), Prevention of Money Laundering Act, 2002
Section 66(2) deals with sharing of information with another competent agency where the authority specified under the provision forms an opinion, on the basis of material in its possession, that provisions of another law have been contravened.
In this case, the High Court interpreted the provision as a mechanism for transmitting relevant information to the concerned agency so that the appropriate criminal-law process can be initiated.
Section 173, Bharatiya Nagarik Suraksha Sanhita, 2023
The Court referred to Section 173 BNSS as corresponding to Section 154 CrPC in the context of registration of FIRs.
Where information discloses the commission of a cognizable offence, registration of the FIR sets the investigation process in motion.
Section 63, Bharatiya Sakshya Adhiniyam, 2023
The Punjab Police had raised issues concerning electronic evidence, including WhatsApp chats and other digital material. The police sought compliance with the requirements relating to electronic records.
The judgment notes that the ED subsequently forwarded certificates and other material concerning electronic evidence. The Court considered the existence of such material while determining whether the allegations warranted investigation, without finally determining its evidentiary value at trial.
Important Precedents Considered by the Court
| Case | Legal Principle / Relevance |
|---|---|
| Lalita Kumari v. Government of Uttar Pradesh, (2014) 2 SCC 1 | Registration of FIR is mandatory where information discloses a cognizable offence, subject to recognised circumstances permitting preliminary inquiry. |
| Vijay Madanlal Choudhary v. Union of India, (2023) 12 SCC 1 | Considered the effect of Section 66(2) PMLA information being shared with jurisdictional police. |
| State of Uttaranchal v. Balwant Singh Chaufal, (2010) 3 SCC 402 | Principles governing PILs and credentials of public-interest petitioners. |
| P. Sirajuddin v. State of Madras, (1970) 1 SCC 595 | Considered in the context of preliminary inquiry involving allegations of corruption against public servants. |
| V. P. Nandakumar v. Deputy Director, Directorate of Enforcement | Distinguished on the facts concerning survival of an ECIR after quashing of the predicate FIR. |
| Harish Fabiani v. Enforcement Directorate | Considered in relation to the effect of information sharing under Section 66 PMLA. |
The Court’s treatment of these authorities was directed principally towards determining the relationship between Section 66(2) PMLA, registration of an FIR, preliminary inquiry and the maintainability of the PIL.
Final Decision of the Punjab and Haryana High Court
The High Court ultimately concluded that a fair and transparent investigation was required.
The Court was dissatisfied with the manner in which the Punjab Police had dealt with the material shared by the ED and considered the allegations sufficiently serious to warrant an independent investigation.
The Court therefore entrusted the investigation to the Central Bureau of Investigation.
The CBI was directed to register an FIR and proceed with the investigation forthwith. The State of Punjab and Punjab Police were directed to provide all assistance necessary for the CBI to conduct a fair investigation.
The CBI was further directed to submit a report regarding the outcome of the investigation to the High Court within two months. The matter was listed for 7 December 2026 for submission of a status report.
What This Judgment Means
This judgment is important for understanding the relationship between the Enforcement Directorate and the jurisdictional police when information is shared under Section 66(2) of the PMLA.
The provision does not itself make the ED the investigating agency for every offence that may emerge during a PMLA investigation. Instead, information concerning contravention of other laws is shared with the concerned agency for necessary action.
The Punjab and Haryana High Court has emphasised that “necessary action” cannot be understood as permitting indefinite inaction where the material prima facie discloses a cognizable offence.
The judgment also demonstrates that the High Court may intervene through its PIL jurisdiction where alleged inaction concerns corruption in high public office and the circumstances demonstrate a substantial threat to public interest.
Key Takeaways
- Section 66(2) PMLA permits the ED to share information regarding contravention of other laws with the concerned agency.
- Where such information prima facie discloses a cognizable offence, registration of an FIR would ordinarily follow.
- A preliminary inquiry cannot be used indefinitely where the material already discloses a cognizable offence.
- The question whether information shared under Section 66(2) discloses a cognizable offence depends upon the facts of each case.
- A public-spirited person may maintain a PIL where the matter concerns substantial public interest.
- Allegations concerning corruption in high public office can constitute an issue of vital public importance.
- The High Court can direct investigation by an independent agency where the circumstances demonstrate the need for a fair and impartial investigation.
- The Court did not determine the ultimate guilt of the persons named in the ED material; that question remains for investigation and trial.
- The CBI was directed to register an FIR and investigate the matter forthwith.
- The State of Punjab and Punjab Police were directed to assist the CBI in conducting the investigation.
Frequently Asked Questions
What is the Nikhil Saraf v. State of Punjab case?
Nikhil Saraf v. State of Punjab and Others is a 2026 PIL before the Punjab and Haryana High Court concerning allegations of corruption and other illegal activities involving senior public officials and the alleged failure of Punjab Police to register an FIR after receiving information from the Enforcement Directorate under Section 66(2) of the PMLA.
What did the Punjab and Haryana High Court decide?
The Court held that the material shared by the ED prima facie disclosed cognizable offences requiring investigation. It therefore directed the CBI to register an FIR and conduct a fair and transparent investigation.
What is the importance of Section 66(2) PMLA in this judgment?
Section 66(2) was important because the ED had shared information with the Punjab Police concerning alleged violations of other laws. The Court held that such information, where it discloses a cognizable offence, is intended to activate the criminal investigation process.
Is FIR registration mandatory after every communication under Section 66(2) PMLA?
Not automatically. The Court clarified that the information shared must be examined to determine whether it discloses a cognizable offence. Where it does, an FIR would ordinarily have to be registered. A preliminary inquiry may be justified where the information does not disclose a cognizable offence.
Can a private person file a PIL seeking investigation into alleged corruption?
The judgment establishes that a genuinely public-spirited person can approach the High Court where the matter involves substantial public interest. In this case, the Court found that allegations concerning corruption in high public office and alleged inaction by the police constituted a matter of vital public interest.
Did the High Court find the accused persons guilty of corruption?
No. The Court did not conduct a trial or determine criminal guilt. It held that the material prima facie warranted investigation and specifically recognised that the merits of the allegations would have to be examined during investigation and trial.
Why did the High Court transfer the investigation to the CBI?
The Court was dissatisfied with the manner in which the Punjab Police had handled the material received from the ED. It concluded that a fair and transparent investigation was required and therefore considered an independent CBI investigation appropriate.
What did the CBI have to do after the judgment?
The CBI was directed to register an FIR and proceed with the investigation forthwith. The State of Punjab and Punjab Police were directed to provide assistance to the CBI.
What was the status-report deadline?
The Court directed that a report concerning the outcome of the investigation be submitted within two months and listed the matter for 7 December 2026 for furnishing the status report.
What is the main legal principle from the judgment?
The principal takeaway is that where information shared by the ED under Section 66(2) PMLA prima facie discloses a cognizable offence, the jurisdictional police ordinarily must initiate the criminal process through registration of an FIR rather than allowing an indefinite preliminary exercise to replace investigation.
Conclusion
The judgment in Nikhil Saraf v. State of Punjab and Others is significant for PIL jurisprudence, the operation of Section 66(2) of the PMLA and the law governing registration of FIRs.
The Punjab and Haryana High Court accepted that the allegations concerning corruption in high public office raised a substantial public-interest issue. It also held that the ED’s communication under Section 66(2), supported by material allegedly indicating cognizable offences, required a meaningful response from the jurisdictional police.
The Court’s intervention was ultimately based on the particular facts before it. It did not pronounce upon the guilt of the persons named in the material. Instead, it held that the allegations required a fair, transparent and independent investigation.
Consequently, the Court entrusted the investigation to the CBI, directed it to register an FIR and ordered the State authorities to cooperate with the investigation. The judgment therefore reinforces the principle that where material prima facie discloses a cognizable offence, the criminal investigation process cannot be indefinitely delayed under the guise of preliminary examination, particularly when the matter concerns serious allegations involving high public office.
