3 May 2023 3:45 PM GMT
"Is there no other competent person in the entire agency?" the Supreme Court on Wednesday asked Solicitor-General for India Tushar Mehta, in response to his submission that Enforcement Directorate chief Sanjay Kumar Mishra's tenure had been extended to ensure continuity in leadership ahead of the FATF peer review later this year. A three-judge bench of Justices BR Gavai, Vikram Nath,...
"Is there no other competent person in the entire agency?" the Supreme Court on Wednesday asked Solicitor-General for India Tushar Mehta, in response to his submission that Enforcement Directorate chief Sanjay Kumar Mishra's tenure had been extended to ensure continuity in leadership ahead of the FATF peer review later this year.
A three-judge bench of Justices BR Gavai, Vikram Nath, and Sanjay Karol was hearing a batch of petitions challenging a fresh extension given to the term of the chief of the agency as well as the Central Vigilance Commission (Amendment) Act, 2021.
The solicitor-general sought to defend the government's decision to extend the tenure of the ED director on the ground that ensuring continuity in leadership was imperative, especially in light of the upcoming Financial Action Task Force (FATF) peer review due to take place in 2023. FATF is a global money laundering and terrorist financing watchdog that has a system of periodic peer-reviewed mutual evaluation to assess the levels of implementation of its recommendation by each of its members. India's performance according to the watchdog's norms will be assessed this year, after a decade, the law officer informed the bench. He also pointed out that based on this assessment, countries are categorised into lists indicating the level of their performance, which would ultimately entitle (or, disentitle) them from not just receiving financial assistance from international organisations such as the World Bank and the Asian Development Bank, but also borrowing from foreign banks. "The rating of each country also has a direct bearing on the stock market and share market since our shares are traded on Wall Street," Mehta said.
Solicitor-General Mehta further told the bench:
"The peer review was supposed to take place in 2019-20. However, because of COVID-19, this got pushed back. Now, it will be held in 2023. That was one of the major factors why we amended the provision and tried to take away the basis of the judgement. This was so that a new person may not be forced to interact with international peers who would be rating us on a number of parameters. The person who has been interacting with the task force would be best suited to handle them and answer their many questions. Facing the peer review would require not only the factual background of the past years, but also a different level of skill, which an individual may acquire only after they have worked in that particular capacity for a while."
Justice Gavai, in response to this submission, asked the solicitor-general whether there was no one else in the entire agency who could take over the responsibilities of the incumbent director, should he retire. The Supreme Court judge remarked:
"Is there no other person in the entire organisation who is competent to discharge these responsibilities? Even if we accepted your argument, what will happen beyond 2023 when Mishra finally retires? What will happen to the Directorate of Enforcement then? If he had, for instance, completed the five-year period that has now been set as the outer limit, what would have happened? Would you have allowed, instead of five years, six years, by an amendment?"
Mehta responded that there were many competent officers, but continuity was sometimes necessary when dealing with international organisations. He further illustrated, "Let's say, someone is negotiating diplomatic talks for extradition of a fugitive. It is not a simple matter of a successor reading the file and taking over. The incumbent shares diplomatic relations with their foreign counterparts, they have had discussions that are not made part of the record. At that level, not everything is in writing."
The law officer added that at this juncture, ensuring continuity was paramount and this was a relevant factor that weighed heavily with the government when it brought about the 2021 amendment, on the strength of which Mishra's tenure was extended. He explained, "The world never stops for anyone. No one person is indispensable. But, in certain cases, continuity is necessary. This is not about an individual, but the effective performance of the entire country."
Not only this, but Mehta also pointed out that the anti-money laundering statute was an act unlike any other civil or criminal act in the country and the office of the agency's director a 'sui generis' position. This was because of the profound transborder implications of the statute. Flexibility in appointments and extension of tenure - 'free play in the joints' - was needed in light of these implications and with a view to preserving continuity in administration, he said.
Incremental increase in tenure ensures ED chief does not become a 'non-performer' or 'law unto themselves': SG Tushar Mehta
Besides arguing that the impugned amendment was essential in the national interest, the solicitor-general also vigorously disputed the petitioners' contention that an incremental one-year-at-a-time policy of granting extensions would amount to a carrot-and-stick strategy employed by the government to ensure the obedience of the directors of investigating agencies like Enforcement Directorate and Central Bureau of Investigation. "This argument is a double-edged sword," said the law officer. He explained, "The policy of granting one-year-long extensions at a time would actually ensure that the officer does not become a law unto themselves, and second, so that they do not become non-performers."
"Also so that they could become a performer according to the government?" Justice Gavai asked.
The solicitor-general vehemently denied that the policy affected the independence of the directors. In support of this argument, he said that the chiefs were nominated on the recommendation of a committee, which comprised the Central Vigilance Commissioner as its chairperson, other vigilance commissioners, and government secretaries. The Central Vigilance Commission, Mehta emphatically said, enjoyed great confidence and 'impeccable independence'. "Not even the government can remove them," the law officer pointed out.
Members of political parties whose leaders are under serious investigation have no locus: SG Tushar Mehta
A preliminary objection to the public interest litigation (PIL) petitions filed by members of political parties was also raised today by the solicitor-general right at the outset, on the ground that they were allegedly 'privately' motivated. Among the petitioners are Congress leaders Jaya Thakur and Randeep Singh Surjewala, Trinamool Congress legislator Mohua Moitra, and TMC spokesperson Saket Gokhale. "We have no serious objection with respect to the petitions filed by Vineet Narain and Common Cause," Mehta said. With respect to the rest, he said:
"Petitions filed by political party members whose senior functionaries are under investigation by the enforcement directorate have no locus standi to file the said petitions. Their leaders are facing serious investigations. In one of the cases, we had to bring a cash counting machine because there was so much money recovered from them. Would this court want to entertain petitions at the behest of those who want to pressurise the enforcement directorate? A public interest litigation has to be limited to the public interest."
"Merely because a person belongs to a political party, can that be a ground to disallow them from filing a petition?" Justice Gavai countered. Yes, the law officer said. However, the bench appeared reluctant to accept the submission that no public interest was involved in the petitions at all. Notably, Justice Gavai remarked, "The public interest lies in the fact that despite a specific mandamus issued by this court directing that a particular person would not be granted any further extension, the government has granted him an extension."
In 2021, a bench of Justices L Nageswara Rao and BR Gavai had, while holding that extensions could only be granted in ‘rare and exceptional cases’ for a short period of time and affirming the first extension to Mishra’s tenure, had firmly held that no further extension could be granted to him. However, throughout the hearing, Mehta maintained that the mandamus issued in the 2021 Common Cause judgement was not an individual mandamus as it appeared, and moreover, was issued specifically in the context of the statutory framework that existed back then.
The central government has been embroiled in a prolonged political controversy over its decision to extend Mishra’s tenure, who was first appointed in November 2018. According to the appointment order, he was set to retire two years later, on reaching the age of 60 years. However, in November 2020, the Government retrospectively revised the order, increasing his tenure from two years to three years. The Supreme Court was moved to examine the validity of this retrospective revision and extension of Mishra’s tenure by an additional year in Common Cause v. Union of India. A division bench headed by Justice L. Nageswara Rao held that extensions could only be granted in ‘rare and exceptional cases’ for a short period of time. While affirming the move to extend Mishra’s tenure, the apex court cautioned that no further extension was to be granted to the Chief of the Directorate.
In November 2021, three days before Mishra was about to retire, two ordinances were promulgated by the President of India, amending the Delhi Special Police Establishment Act, 1946 and the Central Vigilance Commission Act, 2003. These ordinances eventually culminated into bills that were approved by the Parliament in December. On the strength of these amendments, the tenure of both the CBI and ED Directors could now be extended by one year at a time till the completion of five years from the initial appointment. In November of last year, Mishra was given another one-year extension, which has been challenged now.
The recent amendment to the Central Vigilance Commission Act has also been challenged before the apex court in at least eight separate public interest litigations. The petitioners include Congress leaders Jaya Thakur, Randeep Singh Surjewala, Trinamool Congress MP Mahua Moitra, and party spokesperson Saket Gokhale. Apart from being assailed for having violated the injunction issued by the apex court in Common Cause, the ordinances were challenged for conferring "unfettered discretion" on the Union over the appointment and tenure of the Directors of CBI and ED, and therefore, allegedly compromising the independence of the investigative bodies.
In a counter-affidavit, the Centre told the Supreme Court that the petitions are motivated by oblique political interests since they have been filed by and on behalf of petitioners belonging to political parties whose leaders are currently being investigated on charges of money laundering. The petitions have been filed “to ensure that the Enforcement Directorate does not and cannot discharge its duties fearlessly,” alleges the Central Government. “The petitioner would only be convinced that these agencies are independent if these agencies were to turn a blind eye to the offences committed by the political leaders of their political party,” the affidavit stated.
In a significant development, in February, amicus curiae Senior Advocate KV Vishwanathan told a bench comprising Justices Gavai and Aravind Kumar that not only the third extension granted to the chief of the Enforcement Directorate, but also the amendment to the Central Vigilance Commission Act permitting the central government to extend the tenure by one year at a time, up to a total of five years, was illegal. “The extension order and the statutory amendments, keeping in mind the long line of judgments from Vineet Narain, Prakash Singh I, Prakash Singh II, Common Cause I, and Common Cause II, are illegal. Not only the extension but also the amendments,” Viswanathan told the bench. The senior counsel also appealed to the bench to exclude the aspect relating to the political affiliations or the politics surrounding the petitioners. In response, the bench plainly stated, “We are not concerned with who belongs to Bharatiya Janata Party and who belongs to Congress.”
On the last day of the hearing, the counsel for the petitioners raised concerns about the independence of investigating agencies and how it was threatened by what senior advocate Gopal Sankaranarayanan described as a ‘carrot-and-stick policy’ of granting piecemeal extensions of only one year at a time to the heads of the said agencies. Sankaranarayanan explained:
“The problem of the carrot-and-stick policy of dangling extensions over the incumbent and making the grant of further extensions contingent on their performance, the investigations presided by the director cannot be independent.”
Viswanathan also spoke about the importance of ensuring the independence of institutions like the Directorate of Enforcement, ardently contending that such institutions ought to be insulated from executive influence in the larger interests of democracy. Notably, he told the bench, “These agencies do important work and need not just independence but the perception of independence.”
Jaya Thakur v. Union of India & Ors. | Writ Petition (Civil) No. 1106 of 2022