BREAKING | Madras High Court Stays ED Summons To District Collectors In Sand Mining Money Laundering Case

The division bench of Justice SS Sundar and Justice Sunder Mohan passed the interim orders in a batch of pleas challenging the summons issued by the Enforcement Directorate to District Collectors in Tamil Nadu in an alleged sand mining money laundering case. The court granted three weeks time to the directorate to respond to the case.

Yesterday, Senior Advocate Dushyant Dave, appearing for the Tamil Nadu government argued that the Mines and Minerals (Development and Regulation) Act was a code in itself and the Central authority did not have any investigative powers under the Act. Dave also submitted that the offences under MMDR Act were not scheduled offences under the Prevention of Money Laundering Act and in that regard also, the ED did not have any powers.

Dave also pointed out that the powers of ED was not unbridled and the power to issue summons was limited to scheduled offences under the PMLA. In the present case, emphasising that there was no scheduled offence, Dave submitted that the ED had acted outside its powers which required judicial intervention. Dave also submitted that if the agency required the assistance of the officers, they should have requested the officers and not issued summons.

On the other hand, ASG ARL Sundaresan, appearing for the ED submitted that the officers were being called only for assisting the ED and that no fishing or roving enquiry was being conducted by the directorate.

Challenging the maintainability of the petitions, Sundaresan argued that none of the petitioners were accused in the case and thus, the present petition to stall the investigation should not be allowed.

Sundaresan also submitted that there was rampant illegal mining in the state of Tamil Nadu which were offences under Sections 417,418,419,420,471 of IPC and under Prevention of Corruption Act as because officers were also involved. These, Sundaresan submitted, were scheduled offences which gave jurisdiction to the ED to investigate the issue.

Sundaresan also argued that the State and it's officers were trying to shield possible offenders. It was also submitted that as per Section 50 of the Act, the officer of the Directorate was empowered to issue summons to any person be it a private individual or an officer holder. According to the ED, if Sate’s contention were to be accepted, it would render all acts related to enforcing criminal provisions and civil law useless.

Advocate General R Shunmugasundaram, Additional Advocate General Amit Anand Tiwari also appeared for the State. Special Prosecutor for ED N Ramesh appeared for ED.

Citation: 2023 LiveLaw (Mad) 368

Case Title: State of Tamil Nadu v Enforcement Directorate

Case No: W.P No(s). 33459 to 33468 of 2023