'ED Can't Investigate Predicate Offences', Says TN; 'What Prejudice Caused If State Helps ED?', Asks Supreme Court

The Supreme Court on Monday (February 26) continued its probing examination of the Tamil Nadu government's standing to challenge summonses issued by the Enforcement Directorate (ED) to district collectors in connection with alleged illegal sand mining-money laundering cases.A bench of Justices Bela M Trivedi and Pankaj Mithal was hearing a special leave petition filed by the Directorate of Enforcement (ED) against a November 28 ruling of the high court staying the operation of the summonses issued by the central agency to district collectors in the case under the Prevention of Money Laundering Act, while allowing the investigation to continue.On the last occasion, the bench questioned the state government's locus standi to invoke Article 226 of the Constitution before the high court, assailing summonses issued to district collectors. Justice Trivedi initially suggested staying the high court's interim order but agreed to defer the decision at Senior Advocate Mukul Rohatgi's request. Representing Tamil Nadu, the senior counsel vehemently argued that there was no legal prohibition preventing the state from initiating the writ action, saying that it was a 'question of federalism'. He also cited a separate writ petition filed by the ED in the Supreme Court seeking to transfer a bribery case against its officer Ankit Tiwari from the Tamil Nadu Directorate of Vigilance and Anti-Corruption (TNDVAC) to the Central Bureau of Investigation (CBI), citing non-cooperation from the state government.The Additional Advocate General of Tamil Nadu, Amit Anand Tiwari, pointed out that the district collectors themselves had challenged the summonses in the high court. Justice Trivedi agreed that the collectors may have pursued a legal remedy before the high court in their own capacities, but questioned how the writ action was maintainable at the state government's instance. The judge also stressed that the ED was empowered to conduct a preliminary inquiry under Section 50 of the PMLA, asking why the state officials would not cooperate with the agency. To this, Rohatgi argued that the district collectors were not obliged to respond if the central agency was acting without jurisdiction.Is district collector not part of the State? Kapil Sibal defends Tamil Nadu govt's standing to file writ petitionDuring Monday's hearing, Justice Trivedi pointed to the obligation of the state government and its instruments to comply with central laws as per the mandate of Article 256 of the Constitution. Senior Advocate Kapil Sibal, who appeared today for the State of Tamil Nadu, however, reiterated the state government's challenge to the jurisdiction of the Enforcement Directorate under the Prevention of Money Laundering Act to investigate what he described as 'mining offences'. Echoing the submissions made by Rohatgi on the last occasion, Sibal stressed that none of the offences were scheduled offences under the anti-money laundering statute.To Justice Trivedi's query on why the State intervened on behalf of the district collectors, Sibal insisted that the collectors were not acting as individuals but as its representatives. He also objected to what he described as an 'omnibus order' issued by the probe agency seeking a wide gamut of information from the collectors.“Is a district collector not a part of the State? Information was not sought from the collectors in an individual capacity. The state government is aggrieved by an omnibus order of the Enforcement Directorate asking information from an authority of the State. In this omnibus order, four collectors in four districts have been asked by the agency to furnish whatever information that has been sought. Both the state government and its authorities are petitioners before the court, on grounds that the ED had no jurisdiction. What is the legal basis for saying that the state government cannot file a writ petition?”Sibal further pointed out that there was no investigation or first information report (FIR) regarding the leases in question, nor any identified proceeds of crime, questioning the basis on which the ED sought information. He also highlighted a discrepancy between the districts from whose collectors information has been sought by the central agency and the districts mentioned in the FIRs filed with respect to the illegal sand mining case.The senior counsel summarised –“First, there are no proceeds of crime in any FIR, nor any predicate offence in any FIR qua which information has been sought. Therefore, the question of issuing notice under Sub-section (2) of Section 50 does not arise. That's the second point. Third, the ED is concerned with money laundering. It has no powers under the PMLA to investigate predicate offence. Fourth, in this case, the state government has filed a writ petition because the authority of the state has been asked to produce documents with respect to leases vis-à-vis which there is no scheduled offence.”State and its officers should help Enforcement...

'ED Can't Investigate Predicate Offences', Says TN; 'What Prejudice Caused If State Helps ED?', Asks Supreme Court

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'ED Can't Investigate Predicate Offences', Says TN; 'What Prejudice Caused If State Helps ED?', Asks Supreme Court

Awstika Das

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