Logos of Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) | Representational photo: Twitter/@ANI/@dir_ed
Logos of Central Bureau of Investigation (CBI) and Enforcement Directorate (ED) | Representational photo: Twitter/@ANI/@dir_ed
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The Narendra Modi government’s decision to promulgate an ordinance to effect amendments to the Central Vigilance Commission Act 2003, and the Delhi Special Police Establishment Act 1946, is a timely step in the right direction. Under the current circumstances, it is imperative, in the national interest, for the Modi government to create a framework to allow an extension to the Directors of the Central Bureau of Investigation and Enforcement Directorate for an overall tenure of five years.

Under the existing provisions of the law, these two officers had a tenure of two years or until the age of 62 years, whichever came first. Even the latter provisions had been inserted into the law, effectively under the direction of the Supreme Court, to provide not only a stable tenure to the chiefs of these two premier investigating agencies but also to ensure operational autonomy for them within the governmental system.

The ordinance, promulgated on 14 November 2021, was followed by its order dated 17 November 2021 —  a day before his extended tenure was expected to end — to grant an unprecedented fourth year of extension to the ED chief, Sanjay Kumar Mishra, an Indian Revenue Service (IRS) officer (income tax) of the 1984 batch, drawing sharp criticism from various quarters. Mishra was originally appointed on 19 November 2018 as the first IRS officer to ever hold the position, for a fixed tenure of two years, in accordance with the then extant provisions of the law. In November 2020, he was granted an unprecedented one-year extension till 17 November 2021, for the third year, by retrospectively modifying his original appointment order.

Mishra had significant experience in the investigation wing of the income tax department, apart from having served as Joint Secretary in the Ministry of Finance, dealing with international taxation issues. He also had a tenure as Joint Secretary of the Ministry of Home Affairs, under P. Chidambaram as the home minister. He is credited with having steered retrospective amendments during the tenure of Pranab Mukherjee as finance minister to undo Supreme Court judgments in the Vodafone international taxation case.


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Amendment against Supreme Court order

This was challenged by Prashant Bhushan, a senior advocate of the Supreme Court, as being contrary to the law. The court, on 8 September 2021, while upholding the extension in Mishra’s tenure for the third year, had passed a categorical order that no further extension beyond the current tenure ending on 17 November 2021 would be granted.

The latest amendment has changed the very basis of the law on which the decision of the Supreme Court was delivered. The critics of the Modi government, including opposition political parties and some lawyers, have stridently criticised the promulgation of the ordinance, followed by an extension in the tenure. It has been described as blatant disregard and even contempt for the Supreme Court’s order. They have argued that the entire exercise is meant to retain a blue-eyed boy of the Modi government, with the express purpose of harassing its political opponents. Firebrand TMC MP Mahua Moitra has also approached the Supreme Court, challenging both the promulgation of the ordinance as well as the grant in extension. The Indian National Congress has also urged the court to quash the ordinance.


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Previous systems and directors

While there has been no official comment or clarification from the official quarters on this subject, we seek to examine what could have weighed in the minds of the Modi government in taking this rather bold and unusual step. The ED was created under the Department of Revenue, Ministry of Finance, in 1956. Normally, an Indian Administrative Service officer of the rank and status of Additional Secretary to the Government of India was posted as the Director of ED. However, the Enforcement Directorate gained relative prominence after the enactment of the Prevention of Money Laundering Act (PMLA) 2002, despite it already being dealing with cases under the Foreign Exchange Management Act 1999.

Before Sanjay Kumar Mishra, the Director of the ED was Karnail Singh, an Indian Police Service officer of the 1984 batch of Rajasthan cadre, who officiated from October 2016 till November 2018.

Notwithstanding Mishra’s varied and brilliant track record, not many people expected him to galvanise the Enforcement Directorate into an efficacious law enforcement agency. One must understand the basic framework of PMLA 2002. It is normally invoked with the express purpose of tracking down, attaching, and ultimately retrieving the “proceeds of crime” in what is called the “scheduled offences”. These are given in the Schedule to the Act and include, inter alia, laws such as the Prevention of Corruption Act 1988, Narcotic Drugs and Psychotropic Substances Act 1985, etc.

Normally, a condition precedent for the ED to invoke its jurisdiction is the registration of an FIR under any one of the scheduled offences. The law and administration of criminal justice, being what it is, takes virtually decades for any person to be convicted for the offences under the scheduled laws. In the meantime, the accused have full access to the huge ill-gotten funds garnered by them from the various ‘allegedly’ committed offences, which are described as proceeds of crime.

PMLA gives the ED powers to attach such proceeds of crime, including cash, bank accounts and immovable property etc, for a period of six months or until its confirmation by a judicial tribunal. However, if during this time ED itself files a criminal complaint before the competent criminal court, the attachment will continue as long as the trial goes on.


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How SK Mishra changed ED

Sanjay Kumar Mishra brought about fundamental changes in the work culture of the Enforcement Directorate. First, he maintained a low public profile and did not give any interviews to the media. He also ensured that the zonal directors, who were earlier working essentially as regional satraps, also did the same. He ensured that no motivated leaks or rumours attributed to sources within ED were floated.

He avoided indiscriminate arrest of the accused, giving them ample opportunity, by way of summons, to join the investigation. For instance, in the case of the former Maharashtra home minister, Anil Deshmukh, numerous opportunities by virtue of summons were granted and he was arrested only when he refused to cooperate with the ongoing investigation. Chidambaram was also given ample opportunity to join the investigation in the INX Media case and was ultimately arrested only when he exhausted his legal remedies. Robert Vadra was also summoned and grilled on multiple occasions, although he was not arrested, since he was granted anticipatory bail by the court essentially on the grounds that he had joined the investigation.

Although the law permits ED to attach the proceeds of crime at any time after the registration of an ECIR (Enforcement Case Information Report—generally regarded as equivalent to FIR), the general practice that the organisation followed under his leadership was to do so only when a formal complaint/challan had been filed before a competent criminal court. This ensured that the six-month time limit did not lead to the release of the assets, by the mere efflux of time, where a formal complaint could not be filed before the criminal court.

While high-profile cases of political personalities have grabbed media headlines, the attachment of assets of persons connected with Jammu and Kashmir terrorist/separatist leaders, Mumbai underworld dons, Naxalite kingpins, as well as NGOs indulging in subversive activities while accessing foreign funds, have also crippled their ‘anti-national activities’. ED is also credited with attaching the assets of various companies like I-Monetary Advisory (IMA) allegedly engaged in laundering money through questionable schemes. Mishra also ensured attachment of the Indian assets of Vijay Mallya, Nirav Modi and Mehul Choksi to the extent of Rs 8,441.50 crore and transferred them to public sector banks.

In a scenario where the Enforcement Directorate was handling a number of such sensitive cases that were at a crucial stage, it would have been neither in the national interest nor in the interest of the administration of justice to change the head of the organisation, merely because of a legal provision. The legal hitch was removed through the ordinance and an extension for the fourth year that was granted to Mishra.

The accused in many cases have been defended by some of the best legal brains in the country. It thus requires both courage, perspicuity and endurance to take head-on perpetrators of serious economic offences, especially where they have both tremendous political and economic power and, in many cases, tentacles spread all over the world through the international mafia. One does so at a great cost to one’s personal physical and mental health, including familial tension. For all of this and more, I have only one thing to say: Good luck to SK Mishra.

KBS Sidhu recently superannuated from the IAS, 1984 batch of Punjab cadre. He tweets @kbssidhu1961. Views are personal.

(Edited by Srinjoy Dey)

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