New Delhi: Solicitor General Tushar Mehta and senior advocate Kapil Sibal had a heated exchange in Supreme Court Tuesday over the Enforcement Directorate’s powers to investigate money laundering cases in non-BJP ruled states.
A division bench of justices Suryakant and K.V. Vishwanathan was hearing the ED’s petition to transfer an investigation into bribery charges against its officer, Ankit Tiwari, from the Tamil Nadu Vigilance and Anti-Corruption Department to the Central Bureau of Investigation (CBI).
The state police had apprehended Tiwari on 1 December for allegedly accepting a bribe of Rs 20 lakh from a state government employee.
In its petition, the ED has alleged non-cooperation on the state police’s part in carrying out investigations under the anti-money laundering law. The department has stressed on an impartial investigation into Tiwari’s case and said that the state police’s motives might be to undermine the morale of other ED officers and impede PMLA investigations in Tamil Nadu.
Tiwari is currently in custody after the Madurai Bench of the Madras High Court dismissed his bail application last month.
“The federal structure of this country is being jeopardised,” Sibal, who was appearing for the Tamil Nadu government, retorted as soon as Mehta began his arguments on behalf of the ED. In his opening remarks, Mehta said that ministers of the Tamil Nadu government are under ED’s scanner on account of predicate offences, FIRs of which are already registered with the state police.
Predicate or scheduled offences are defined under Section 2(y) of the Prevention of Money Laundering Act (PMLA).
Mehta alleged the state police department, which is investigating Tiwari, raided the ED office and collected material unconnected with the officer. The solicitor urged Sibal not to turn the matter into a political one.
In response, Sibal shot back: “This is not political at all. Every investigating agency, be it the ED or the CBI must act fairly. What is happening is that certain states are being targeted and ED names people as accused, but there is no investigation taking place”.
The bench interrupted the two counsel when they got more vocal with their accusations against each other. The judges told them that there was “something to say about both sides” and suggested they come out with a solution to make sure that investigations into corruption charges are carried out more transparently.
Justice Vishwanathan said: “There may be genuine cases where ED has to go and investigate. But there could be some malafide ones too. There has to be best practices. Some mechanism has to be evolved so that genuine cases don’t go scot-free merely because it is being handled by the central agency.”
The Enforcement Directorate (ED) had opened an inquiry into money laundering charges brought against Tiwari by the Tamil Nadu police in December.
The central agency registered an Enforcement Complaint Information Report (ECIR) — the ED’s equivalent of an FIR — against Tiwari, who was jailed in the southern state after allegedly being caught red-handed accepting a bribe from a government employee in Dindigul.
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‘Find a solution’
In his arguments, Solicitor General Tushar Mehta pointed to the framework of PMLA and said ED’s role comes into play as soon as an FIR is registered under a predicate offence. He also accused the Tami Nadu government of not sharing details of such FIRs registered in the state.
The solicitor general also complained of the impediments that ED faces due to state governments refusing to cooperate with the agency. Without taking names, Mehta asked how a particular state had unofficially directed its officers not to respond to ED notices in a case where the agency had arrested a senior government officer perceived to be very close to the state chief minister.
When Sibal claimed ED had no right to demand an FIR from the state until it prima facie establishes that a money laundering offence has been committed in connection with the case registered by the state police, the bench said: “If there is an FIR against the accused, if you have already registered alleging the officer has a role in an illegal mining case or a corruption case, then what is the state’s propriety to say that I won’t allow further investigation by the ED”.
Justice Suryakant added that according to the law, the state government should upload all its FIRs on its official website.
Mehta, meanwhile, took a dig at Sibal for saying that ED had no right to demand an FIR, saying such a stand should not be taken by the state but an accused. He also informed the bench that the Tamil Nadu Police website concerning FIRs is blocked on the orders of the competent authority.
Without delving further, the bench issued a notice to the Tamil Nadu government on ED’s petition and asked it to respond within two weeks. It also directed the state to produce all the material it has collected in connection with Tiwari’s arrest and asked both the state police and ED not to proceed with their probes in connection with the case or any matter related to it.
“We are not observing this in the order, but find out a solution for a fair and independent investigation which will ensure none goes scot-free,” the bench said.
The investigation should not get stalled on account of the apprehension of “the so-called political vendetta,” it further said.
“If you cannot then we will do something,” Justice Suryakant said, with Justice Vishwanathan adding that a special body could be set up to look into inter-state ramifications of an investigation undertaken by a central agency, particularly when the state is under the rule of a party that is not in power at the Centre.
The bench wondered about the ramifications of the tit-for-tat reaction, as seen in Tiwari’s case. “We are not saying that you are vindictive, but you have officers in all states,” it told Mehta.
When the solicitor attempted to give another example of disruption by states in ED cases, Sibal challenged him to “investigate the FIRs against the Chief Minister of Assam”.
(Edited by Uttara Ramaswamy)
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