The Supreme Court, in its observation, stated that an Enforcement Case Information Report (ECIR) is not equivalent to a First Information Report (FIR). Therefore, it is not mandatory to formally register an ECIR before initiating penal action or prosecution. The court further held that the disclosure of grounds of arrest is sufficient and that there is no obligation to supply the ECIR to the accused.
This ruling came in response to the case of Vijay Madanlal Choudhary vs. Union of India, which involved allegations of money laundering under the Prevention of Money Laundering Act (PMLA). The accused in the case argued that penal action could not be initiated against them as no ECIR was registered. However, the Supreme Court rejected this argument and clarified the legal status of an ECIR.
The court's decision implies that law enforcement agencies can initiate action against alleged offenders under the PMLA without the need to register an ECIR. However, the authorities must still comply with the disclosure requirements of the law and provide the accused with the grounds of their arrest.