The Enforcement Directorate (ED) on Tuesday registered a new case to probe “afresh” alleged corruption in Chhattisgarh’s liquor industry, people aware of developments said — a day after the Supreme Court quashed money laundering proceedings in the case, holding that no scheduled offence was established for the agency to proceed under the Prevention of Money Laundering Act (PMLA).

The financial crimes probe agency filed an ECIR (enforcement case information report) — equivalent to the first information report (FIR) — on Tuesday morning based on an FIR filed on January 17 by the Chhattisgarh Police, which named 70 people including Indian Administrative Service (IAS) officer Anil Tuteja, his son Yash Tuteja, several Congress leaders, bureaucrats, and businessmen over alleged corruption worth ₹2,000 crore.

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“We have registered a fresh case in Chhattisgarh liquor scam to investigate the larger conspiracy afresh,” said an officer of the agency, requesting anonymity.

The Chhattisgarh police FIR was filed under various sections of Prevention of Corruption Act and the Indian Penal Code, which falls under the category of predicate offence for ED to proceed.

A second officer, who also asked not to be named, said “The fresh case under PMLA will allow us to continue with the gains made in the liquor scam probe in last one year.”

The police FIR came roughly a month after the Congress was unseated in the state by the BJP in assembly elections.

Former Chhattisgarh chief minister Bhupesh Baghel called the probe politically motivated.

“We have always said ED is working on a baseless offence and the motive is highly political. I have been saying this for the last three years. If they have now registered a case on Chhattisgarh EOW’s FIR, it raises many questions. The most important is that the FIR in Chhattisgarh was registered on the advice and direction of ED only, so how can it become a predicate offence,” said Baghel.

To be sure, the Chhattisgarh Police acted in the matter on the reference of ED, which sent a detailed probe report to the local police after the elections. It is unclear exactly when it was sent.

This is not the first time that ED has taken this route to file a case. But a similar sequence of events is part of a batch of petitions currently pending before the Supreme Court.

The new ED case might allow the agency to open its probe again after the top court on Monday struck down the original PMLA probe, saying that predicate offence wasn’t established. “As there is no scheduled offence, as held in the aforesaid decision (Pavana Dibbur), there cannot be any proceeds of crime… If there are no proceeds of crime, obviously offence under Section 3 of PMLA is not made out,” noted a bench comprising justices Abhay S Oka and Ujjal Bhuyan.

The bench noted that ED cannot proceed based on an income tax violation since those offences are not categorised as scheduled under PMLA. In the Dibbur ruling, the court declared that criminal conspiracy can be charged under PMLA only when it relates to an enlisted scheduled offence. PMLA enumerates specific offences, including those under the Indian Penal Code (IPC), Narcotic Drugs and Psychotropic Substances (NDPS) Act and others with cross-border implications.

The controversy originally arose from allegations of corruption within Chhattisgarh’s liquor industry, implicating officials and influential functionaries. ED alleged there were irregularities between 2019 and 2022 when officials of the state-run liquor retailer, CSMCL, took bribes from distillers. The then Congress-led state government accused the BJP-led central government of using ED to target its leaders. The Centre defended ED’s actions as upholding the law.

After the government changed, the state police filed a fresh FIR, also naming then excise minister Kawasi Lakhma, former special secretary at the department of excise and the managing director (MD) of Chhattisgarh State Marketing Corporation Limited (CSMCL) Arun Pati Tripathi, former bureaucrat Vivek Dhandh and Congress leader Anwar Dhebar. The FIR estimated that proceeds of crime (PoC) of around ₹2,161 crore were generated by the suspects in the alleged case.

The federal agency’s latest ECIR in the matter means it can now summon all those named again for questioning and build on its already completed investigation from the beginning, said the first officer cited above.

Earlier, in its charge sheet filed in July 2023 first week, which now stands quashed, ED alleged that ₹776 crore of the ₹2,161 crore collected in the Chhattisgarh liquor scam by Anwar Dhebar, the prime accused and brother of Aijaz Dhebar, went to “political executives”.

Former chief minister Bhupesh Baghel said on Monday that the ruling exposed the Narendra Modi government’s “political misuse” of federal investigative agencies. “Just before the assembly elections, ED registered a case of liquor scam and gave BJP a campaign weapon. BJP tried to defame the Congress government throughout the elections. Today the SC decision has made it clear that the BJP was just spreading lies,” he wrote on X (formerly Twitter).

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ED initiates prosecution under PMLA predicated on a base FIR registered by CBI or any other law enforcement agency. ED registers an ECIR in order to probe the cases of money laundering related to the proceeds of crime which have been committed prior and an FIR for such an offence already exists. If the base FIR is quashed or the accused is exonerated of the charges, ED cannot continue its probe under PMLA, the Supreme Court held in its 2022 judgment in the Vijay Madanlal Chaudhary & Others v Union of India case.

Former ED director Karnal Singh said, “If, during an investigation, ED gathers information related to predicate offence and sends it to police or agencies empowered to file predicate offence related cases, then it will be treated as an independent probe”.