ED Can't Summon District Collectors, Argues Tamil Nadu Govt; Madras High Court To Pass Order Tomorrow

Challenging the summons issued by the Enforcement Directorate to District Collectors in Tamil Nadu in an alleged sand mining money laundering case, Senior Advocate Dushyant Dave argued that the ED could not issue summons to the officers under the Act and if any assistance of the officers was required, the ED could have requested the officers instead.“The Parliament has not given them unbridled power. The power of summons is only with respect to scheduled offences under the Act…Officers cannot be summoned. They can be requested to appear. That's federalism. That's mutual respect. Here they straightway issued summons,” Dave argued.The submissions were made before the division bench of Justice SS Sundar and Justice Sunder Mohan. The bench, after hearing the arguments, said it will pass orders tomorrow.Dave argued that the Mines and Minerals (Development and Regulation) Act was a code in itself and the Central authority did not have any investigative powers under the Act. Dave also submitted that the offences under MMDR Act were not scheduled offences under the Prevention of Money Laundering Act and in that regard also, the ED did not have any powers.Dave also pointed out that the powers of ED were not unbridled and the power to issue summons was limited to scheduled offences under the PMLA. In the present case, emphasising that there was no scheduled offence, Dave submitted that the ED had acted outside its powers which required judicial intervention.Dave added that the State was not alleging malafide by the ED, but a colourable exercise of power through which the ED was discriminating against the State. Dave also pointed out that there were huge cases illegal sand mining pending in other states like Uttar Pradesh, Gujarat etc but the ED had not taken action in these states.On the other hand, ASG ARL Sundaresan, appearing for the ED submitted that the officers were being called only for assisting the ED and that no fishing or roving enquiry was being conducted by the directorate.Challenging the maintainability of the petitions, Sundaresan argued that none of the petitioners were accused in the case and thus, the present petition to stall the investigation should not be allowed.Sundaresan also submitted that there was rampant illegal mining in the state of Tamil Nadu which were offences under Sections 417,418,419,420,471 of IPC and under Prevention of Corruption Act as because officers were also involved. These, Sundaresan submitted, were scheduled offences which gave jurisdiction to the ED to investigate the issue.To the courts enquiry that why a new ECIR was not registered when the alleged offences came to light, Sundaresan argued that illegal mining had been happening for a long time and when the excess sand mined had been converted to cash, the money generated will become proceeds of crime allowing ED to investigate. It was submitted that the ED could not be restrained even in the absence of the FIR when when there was material disclosing proceeds of crime from a criminal activity which was a scheduled offence under the Act.Sundaresan also argued that the State and its officers were trying to shield possible offenders. To this, Dave objected by saying that there was no shielding and if the ED had given details of the offences committed, the State would have assisted them.“There is no shielding. They should not be carrying the investigation behind our backs. We are empowered under the Act to investigate,” Dave argued.On behalf of ED, it was also submitted that as per Section 50 of the Act, the officer of the Directorate was empowered to issue summons to any person be it a private individual or an officer holder. According to the ED, if Sate’s contention were to be accepted, it would render all acts related to enforcing criminal provisions and civil law useless.The ED further submitted that as per a Technical study of mining sites and illegal mining, the total sale value of illegal excess sand mined in the last 1-2 years was 4700 crores as against the recorded revenue of 36.45 crore. Further, since WRD was the only authority permitted to conduct mining in the state, this illegal mining was an offence under the Prevention of Money Laundering Act by various public officers. Advocate General R Shunmugasundaram and AAG Amit Anand Tiwari also appeared for the State. Special Public Prosecutor N Ramesh appeared for ED.Case Title: State of Tamil Nadu v Enforcement Directorate Case No: W.P No(s). 33459 to 33468 of 2023

ED Can't Summon District Collectors, Argues Tamil Nadu Govt; Madras High Court To Pass Order Tomorrow

Upasana Sajeev

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