Long Tenure For ED Director Serves Public Interest, Challenge Against It Politically Motivated : Centre To Supreme Court

This affidavit came in response to a batch of petitions challenging the extension given to the Director of the Directorate of Enforcement. The petitions also challenge Central Vigilance Commission (Amendment) Act 2021 [Amendment] which allows the extension of the term of the Director of the Enforcement of Directorate up to 5 years.

Here are the key highlights of the ED's Affidavit:

Petitioners Are Politically Motivated

The ED's counter affidavit states that the present writ petition styled as a PIL is not maintainable as it is stems from a political motive. The affidavit reads,

"The present repetition is clearly motivated and is admitted, admittedly intended to scuttle the ledger to meet statutory investigation being carried out by the direct rate of enforcement against certain politically exposed persons. The real motive of the petition is to question the investigation being carried out against the president and certain office bearers of the Indian National Congress Party, as is evident from the writ petition instead of available alternative remedies like filing an appropriate petition for cost sharing, etc under the CRPC."

The affidavit throws light on the fact Jaya Thakur, Saket Golkhale, Randeep Singh Surejwala and Mahua Moitra, the petitioners in the batch of petitions, are political leaders hailing from different political parties. The Centre further states that eminent leaders of these political parties are under this investigation of the Directorate, however, this aspect was not mentioned in the PILs.

"The Directorate is strictly going on in accordance with law which is reflected from the fact that in most cases, either the competent courts have taken cognizance or constitutional courts have refused to grant any relief to such parties of the above political parties. There is a manifest political interest in filing the above writ petitions which is apparent, it clearly appears that to achieve such political advantage, the petitioners are camouflaged as political interest litigation, without even bothering to mention the bad the important leaders the parties to which each of the petitioners belong are being investigated", the affidavit filed by the Joint Secretary of the Department of Revenue state.

Further, the affidavit states that for an Article 32 to be maintainable, there has to be a violation of a fundamental right under Part Three of the Constitution. "Other than some vague references to violation of article 14, the petitioner has failed to substantiate how many of her fundamental rights have been violated", it reads.

Tenure of Director of ED has been increased In Public Interest

The top priority of the Union Government has been to eradicate corruption and cases of money laundering. Amongst other agencies investigating into corruption cases, the two most important investigating agencies are the ED and Central Bureau of Investigation [CBI]. Considering the complex nature of crimes which are generally investigated, it's best if the Directors of the agencies have sufficiently long tenures, ED argues.

"With criss-cross entrenchment of persons and groups involving in money laundering and anti-corruption activities unravelling the crime and corruption Nexus through EDI and CBI becomes not only complex, but also has international ramifications. Thus, investigation of such crimes requires the two investigating agencies to have robust processes and senior personnel in position for sufficiently long tenures. As such enhancing capacity and resources for continuing oversight by the senior officers, especially the heads of the two agencies gains criticality."

The tenure and appointments of heads of ED and CBI has been envisaged in the Central Vigilance Commission Act, 2003 And the Delhi Special Police Establishment Act, 1946 respectively. The Amendments made to the respective statutes pave way for providing even longer tenure to the heads of the institutions to help in continuing investigation and critical matters, the affidavit argues.

Claiming that the petitioners' have an erroneous understanding that it is the central government which at its discretion in deciding extensions of terms of the Heads of agencies, the affidavit pointed out that High Powered Committees decide this aspect.

"However, a better reading of the amendment to section 25 (d) of the CVC Act would make it clear that it is a committee constituted under Section 25 (a) of the CVC Act consider and decide upon the issue of the extension of the term of the Director, ED."

Further, the affidavit adds that,

"Legal provisions or service rules restricting the tenure may be counterproductive as in certain situations. At the same time, it is rational to have an upper limit to the tenure of such appointments to maintain independence. Hence, the tenure may need to be extended beyond the initial terms and special circumstances in public interest, depending upon the circumstances on the recommendation of the committee prescribed under the respective statute and for reasons to be recorded in writing. There is no embargo that the term of director CBI or EDI cannot be for more than two years."

Also, a freshly appointed person who assumes charge may take considerable time to fully acclimatize to the new office and workings of the organization and may not function at the optimal level of efficiency. Keeping this in mind, the Amendment brought out that persons heading such Investigative agencies and should have a tenure of two to five years.

High Powered Committees Are Completely Independent

To reiterate, the extension of terms of Director, ED is decided by the High Powered Committee under the CVC Act. This committee which consists of persons who are completely independent and insulated. This being the case, the challenge to the Amendment Act fails and the petition fails to consider that this is the committee which considers and recommends the extension of the tenure of the director ED.

The extension of the term of director, ED on two years and up to a maximum of five years is also necessitated from the administrative standpoint where continuity of the head of the organization is required for several cases—which are at a crucial juncture and which requires historical knowledge and background for supervision of cases.

"Continuity of officers at the helm of the agency is required for proper and expeditious completion of such cases", the affidavit asserted.

Legislative Motive Cannot Be Subject Matter Of Judicial Ccrutiny.

It was further stated that the legislative motive cannot be subject matter of judicial scrutiny. The petitioner the affidavit states that well established legislative motive cannot be a subject matter of the judicial review of scrutiny, and in cases challenging the vires of a statute. The only questions that may be considered are the legislative competence and constitutionality of the provisions themselves, the affidavit said while adding that no Malafide is attributable to the parliament.

Important For Financial Action Task Force, 2022-2023

ED contends that the continuity of leadership of ED is of extreme importance for the purposes of India receiving a positive outcome in the mutual evaluation of India by the Financial Action Task Force for the year 2022-2023. The affidavit states that the financial monetary and economic consequences of greylisting a country are severe.

"….the financial monetary and economic consequences of Greylisting country are severe in this backdrop the upcoming mutual evaluation by the FATF for the year 2022-2023 gains at most significance, it is critical for India to receive a positive outcome in the mutual evaluation for the year 2022-2023. This was one of the important considerations of the committee constituted under Section 25 (a) of the CVC Act in its meeting dated November 15, 2021."

What Led To The Petitions

The petitions challenge the order issued by the Central Government on November 17, 2021 to extend the term of the ED Director Sanjay Kumar Mishra by one more year.

On September 8, 2021 in the case filed by Common Cause, the Court had directed that further extension should not be given to SK Mishra, whose term as ED Director was then to end on November 16, 2021.

However, contrary to the Supreme Court's direction, the Central Government extended his term by one more year with effect from November 17, 2021, the petitioners argue. This was done by way of promulgation of an ordinance to amend the Central Vigilance Commission Act to allow an extension up to 5 years for the term of ED Director. The Ordinance was replaced with the Act which was passed in December 2021. It has been argued in the plea that the was brought solely with the intention of giving benefit to SK Mishra. It is stated that Mishra had otherwise attained superannuation after attaining the age of 60 years in May 2020. He was initially appointed as ED Director in November 2018 for a two year period. Despite his superannuation, in November 2020, the Centre passed an order to retrospectively amend his initial appointment as 3 years. This action was challenged in the case Common Cause vs Union of India. The petitioners contend that the extension given to Mishra is a blatant violation of the directions of the Supreme Court.

The matter will be taken up for final disposal on September 19. Yesterday, a bench led by the Chief Justice of India had appointed Senior Advocate KV Viswanathan as an amicus curiae in the case.

Case Title: Case Title: Jaya Thakur v. UoI WP(C) No. 456/2022 and connected matters