The Enforcement Directorate (ED) plays a crucial role in upholding financial integrity and combating economic crimes in India. Its authority extends to investigating offences such as money laundering, foreign exchange violations, and financial fraud. But time and again, it was noted that some ministers and government officials politicised the ED summons, calling it a political move of the central government. But not anymore; as the Supreme Court held on Tuesday that persons summoned under the Prevention of Money Laundering Act (PMLA) must appear before the Enforcement Directorate (ED) to cooperate with an ongoing investigation,
The Supreme Court noted that the probe agency has the power to summon any person if it deems their attendance necessary during an investigation or proceeding under the Prevention of Money Laundering Act (PMLA).
Background of the Sand Mining Case in Tamil Nadu
- Tamil Nadu, with its extensive coastline and numerous rivers, is a hotspot for sand mining.
- In recent years, allegations of illegal sand mining have been reported from riverbeds, coastal areas, and other restricted zones without proper permits or adherence to environmental regulations.
- This unauthorised mining not only caused ecological damage by disrupting river ecosystems and exacerbating erosion but also posed serious risks to public safety and infrastructure.
- Various FIRs were registered across Tamil Nadu over widespread unauthorised sand mining along the riverbeds and basins of the state.
- Following an investigation, it was revealed that Shanmugam Ramachandran, Karuppaiah Rethinam, and Pannerselvam Karikalan, along with their associates, had formed a syndicate and were involved in illegal mining in the state.
- The ED asserted possession of credible scientific evidence, including drone and LiDAR (light detection) surveys, bathymetric surveys, satellite imagery processing, etc., establishing the prevalence of rampant illegal mining in districts of Tamil Nadu.
- The ED, in this case, said that the permitted mining area was 195.37 hectares, but sand mining was happening at 987.01 hectares.
- The proceeds of the crime and the loss to the exchequer due to illegal sand mining are pegged at a staggering Rs 4,730 crore.
- The central probe agency had summoned the district collectors of Vellore, Tiruchirappalli, Karur, Thanjavur, and Ariyalur as witnesses in connection with its probe into the money laundering case related to alleged illegal sand mining.
- The Tamil Nadu government had contested the extent of the ED’s powers in this matter, arguing that illegal sand mining does not qualify as a scheduled offence under the Prevention of Money Laundering Act (PMLA).
- The state government, along with the bureaucrats, had moved the high court to stay the summons issued by the ED on November 28, 2023.
- Challenging the high court order, ED moved to the Supreme Court, which stayed the Madras High Court order granting relief to the five district collectors.
- Judicial Bench (Bench of justices Bela M Trivedi and Pankaj Mithal) on Tuesday (February 27th, 2024) termed the plea of the Tamil Nadu Government and its officials against the ED summons as “strange and unusual.”
- The Supreme Court directed five district collectors of Tamil Nadu to appear before the Enforcement Directorate in connection with an ongoing money laundering probe pertaining to alleged illegal sand mining.
Impact of the Supreme Court Decision on the Political Storm in New Delhi
- The Delhi Chief Minister has ignored seven summonses of the ED in the “Delhi Liquor Scam,” citing the same as the political agenda of the BJP and the Central Government. In one of its six charge sheets, ED claimed that the policy was Kejriwal’s “brainchild,” though he has not been named as an accused.
- In view of the same, he has been issued an 8th summons and asked for discussion or questioning on March 4th, 2024.
- After the Supreme Court’s recent judgement, Delhi CM’s propaganda of ignoring ED summons seems baseless, as he has no other choice but to make a physical appearance before ED functionaries.
- Already, the ex-Deputy Chief Minister, few other minister, and well-known liquor businessmen are in jail, and now Delhi CM Arvind Kejriwal is under ED and Judicial Radar.
- Other than the “Delhi Liquor Scam,” many other scams were registered against Delhi AAP Government and under various stages of investigation.
The Rule of Law: The Supreme Court’s Stand on ED Summonses and Personal Appearances, which will be a “Judgement of Reference” for all future cases. Earlier On April 5, 2023, the Supreme Court refused to entertain a petition filed by 14 political parties, stating that “politicians can’t claim higher immunity.” The Supreme Court judgement hints at the possibility of an evolving paradigm shift in the Indian judicial system. Days are not far when all financial offenders will be under trial, as we look forward to a “corruption-free India.”