The Supreme Court of India has strongly criticized the Enforcement Directorate (ED), stating that the agency cannot act like a "crook" and must operate within the confines of the law. The court's remarks came during a hearing on review petitions challenging the 2022 verdict that upheld the ED's powers of arrest under the Prevention of Money Laundering Act (PMLA).
A three-judge bench, comprising Justices Surya Kant, Ujjal Bhuyan, and N. Kotiswar Singh, voiced concerns about the ED's low conviction rate in the cases it investigates. The court cited data presented in Parliament indicating that less than 10% of the approximately 5,000 cases registered by the ED in the past five years have resulted in convictions. This prompted the bench to question the agency's effectiveness and credibility.
Justice Bhuyan referenced one of his prior judgments, emphasizing that the ED's primary focus should be on improving its investigation methods, especially considering the agency deals with individual liberties. He raised concerns about the potential for injustice when individuals are held in judicial custody for extended periods, only to be acquitted later. "At the end of 5-6 years of judicial custody, if people are acquitted, who will pay for this?" Justice Bhuyan asked.
The court also addressed the ED's arrest procedures, with Justice Kant inquiring whether the agency provides the grounds for arrest and reasons for arrests to the accused. Additional Solicitor General S.V. Raju, representing the ED, stated that while the agency isn't obligated to provide a copy of the Enforcement Case Information Report (ECIR) to the accused under the statute, subsequent court rulings have emphasized the importance of sharing the grounds and reasons for arrest.
The Supreme Court's scrutiny extends to the ED's handling of complex financial crimes. The court touched upon the increasing possibility of using cryptocurrency for money laundering. While not advocating for a ban on cryptocurrencies, the bench suggested regulating them, drawing a parallel to the regulations governing Indian currency.
In response to the concerns raised about the low conviction rate, ASG Raju attributed it to the delaying tactics employed by "influential accused" who utilize "a battery of lawyers to file applications after applications at different stages to protract the proceedings". He argued that these tactics divert the investigating officers' time from the investigation itself as they are forced to address the numerous applications in court.
To address the issue of delayed trials, Justice Kant suggested establishing dedicated courts, similar to those used for Terrorist and Disruptive Activities (Prevention) Act (TADA) and Prevention of Terrorism Act (POTA) cases, to expedite PMLA trials. He posited that such courts would deter delaying tactics by making it clear that they would not be effective.
The Centre, represented by ASG Raju, defended the PMLA, asserting that it is a special law with its own procedures and safeguards. Raju also contested the maintainability of the review petitions, arguing that they are essentially disguised appeals against the 2022 verdict lacking any apparent errors. He pleaded that accepting the review petitions would be tantamount to rewriting the Vijay Madanlal Chaudhary judgment, which he argued is not permissible.
The Supreme Court had previously, on July 31, stated that it would first address the maintainability of the review petitions challenging its July 2022 verdict. That verdict upheld the ED's powers to arrest, attach properties involved in money laundering, and conduct search and seizure operations under the PMLA. The hearing on the matter is expected to continue next week.
