In Cases Between ED & State Officials, There Should Be Fair Probe; No Vindictive Arrests: Supreme Court Mulls Framing Guidelines

The Supreme Court on Thursday (January 25) expressed the intention to frame guidelines to ensure that investigation of cases involving the Directorate of Enforcement(ED) and the officials of a State Government take place fairly and transparently.

While offenders should not go scot-free, vindictive arrests and mala-fide witch-hunting should also not take place, the Court observed, saying that it is proposing to evolve a mechanism which can apply pan-India. A bench comprising Justices Surya Kant and KV Viswanathan was hearing a writ petition filed by the ED seeking to transfer the investigation of the bribery case against ED officer Ankit Tiwari from the Tamil Nadu Directorate of Vigilance and Anti-Corruption to the Central Bureau of Investigation (CBI). The bench issued notice to the State of Tamil Nadu, seeking its response to the petition and posted the matter after two weeks. The Court directed the TNDVAC to not proceed with the investigation against Tiwari in the meantime. The State agency should also share with the Court all materials collected so far in the case, the Court directed further.

When the matter was taken, Solicitor General of India Tushar Mehta, appearing for the ED, clarified that the agency was not supporting the officer implicated in the bribery case but wanted a fair and proper investigation into the matter.  The SG complained that the Tamil Nadu Police was not sharing the FIRs of the scheduled offences, thereby stalling the ED investigation in money laundering cases against many State officials. He submitted that the State agency, under the guise of investigating the case against Tiwari, raided the ED office and seized several unconnected files, which are relevant in cases against many Ministers, who are under the ED's scanner. Senior Advocate Kapil Sibal, appearing for the State, denied these allegations.

At this juncture, the bench said that it is seeking to address a "larger issue in the matter".

"The larger issue of best practices, considering the federal nature of the country... we will evolve a mechanism. You should sit together and give suggestions," Justice Viswanathan told both the lawyers. While agreeing with the judge, Sibal said that the "federal structure of the country is being jeopardised".

Justice Surya Kant, referring to an order passed by the Madras High Court rejecting CBI probe in the case against Tiwari, said, "The way the PIL was filed, the way the High Court entertained it and passed the order, we don't want to comment on it now. But there is something which can be said about both sides. Better you come up with solutions, otherwise we will find out. The matter needs to be probed in a transparent manner".

When Sibal alleged that the ED was targeting only "certain states", SG objected by saying that political statements are being made.

Justice Viswanathan then explained what the Court had in mind: "There may be genuine cases where ED may have to go in, there may be cases where they are brought into mala fide. Some kind of best practices we want. There has to be a mechanism where when a central agency…particularly when the ruling party is different between the Centre and the State. Something has to be evolved so that while genuine cases don't go scot-free merely because it is being handled by the central agency, at the same time there is no mala fide witch-hunting." 

The Solicitor General, while expressing agreement with the bench on the need for such a mechanism, raised a grievance that the TN Police was not sharing the FIRs of scheduled offences. The SG submitted that the Tamil Nadu police's website relating to FIRs was blocked under the orders of the competent authority and said that the judges themselves could check this fact. When Sibal retorted by asking if the ED has asked for FIRs in any other State, Justice Kant asked him : "Mr.Sibal, aren't the FIRs supposed to be uploaded on the website? Why the secrecy?".

"If you have registered an FIR against a public servant for corruption or illegal mining or disproportionate assets, what is the State propriety to say that we will not permit further investigation by the ED?", Justice Kant asked. 

"ED investigation can happen only if there are proceeds of crime and there are attempts to convert the proceeds of crime into legitimate money. Money laundering is the offence, not the proceeds of crime. So how are the ED entitled to investigate without prima facie money laundering?", Sibal stated. He added that ED was seeking FIRs of cases related to illegal mining, which was not a scheduled offence under the Prevention of Money Laundering Act. Tamil Nadu Additional Advocate General Amit Anand Tiwari at this juncture informed the bench that the Madras High Court has stayed the ED summonses to District Collectors over sand mining cases.

After dictating the order to issue notice on the petition, Justice Kant verbally said : "We are not observing in the order. Please try to explore and tell us a mechanism which should be fair, and transparent. It should apply to all States. We will start with this State."

Expounding the idea further, Justice Kant said : "You can suggest a module. For example, let the matter be investigated by the State anti-corruption bureau as well as the ED by a joint team under the supervision of retired DGP officer, or a former judge of the High Court. Same mechanism can be applied to other States also".

Justice Viswanathan supplemented: "You can suggest a mechanism, a body, which will look into the inter-state ramifications, punishing the really guilty at the same time preventing the vindictive arrest of others".

"If there is a vindictive arrest, there is a Court to look after," SG said.

"Your offices are there all over India. ED offices, CBI offices. Imagine if it goes on, what will happen to our set up?. We are not saying you are vindictive or they are vindictive. But suppose in a given scenario, there is a tit-for-tat reaction. Your officers are sitting in the States. If there is a vindictive action from their side as a tit-for-tat to what they perceive as a vindictive action, what will happen to the country?" Justice Viswanathan said.

The SG then cited the incident of Bengal police arresting CBI officers in Kolkata and the Chief Minister entering the CBI office.

"That is why, there has to be some kind of mechanism which should screen before action is set out," Justice Viswanathan replied.

 "To eliminate the apprehension of political vendetta or actual political vendetta, we need to have a mechanism...therefore, let us find out some transparent mechanism, where the investigation can commence while these types of situations can be avoided..." Justice Surya Kant stated.

The SG said that there are statutory provisions to address such situations. Sibal shot back by saying that the statutory provisions gave unbridled powers to the ED. SG countered by saying that these provisions were upheld by the Supreme Court.

The hearing witnessed certain dramatic moments when the exchanges between the lawyers of both sides heated up. When the Tamil Nadu AAG asked why the ED was not investigating any case in UP, Madhya Pradesh or Gujarat, SG rebutted by terming it a political submission. The SG also asked why the Tamil Nadu government was concerned with the case instead of the accused. When SG accused the TN government of trying to protect ministers, Sibal retorted, "You should also not protect Ministers. Investigate all FIRs registered against the Chief Minister of Assam."

Case : Directore of Enforcement v. State of Tamil Nadu W.P.(Crl.) No. 23/2024

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