Tamil Nadu Govt Moves High Court Against ED Summons To District Collectors In Sand Mining Money Laundering Case

Though Advocate Genral R Shunmughasumdaram mentioned the matter before the bench of Justice SS Sundar and Justice Sunder Mohan, the bench said it’ll take up the matter on Monday.

The State has sought for a stay on the summons and stay of proceedings under the ECIR. The State has also sought for quashing the summons and to declare that ED’s power with respect to enquiring offences within the territorial limits of a State without the consent of the concerned State is violative of the basic structure of federalism and separation of powers.

In the plea, the State submitted that the impugned Summons issued to the Collectors to furnish details of all sand mining sites in their districts results in usurpation of powers of the State by the Centre through Enforcement Directorate which was in stark contravention to the principles of federalism under the Constitution. The State added that the ED was merely attempting to conduct a fishing and roving enquiry into the mining affairs of the State with a view to harass and undermine the State machinery and cause hinderance to the administration and functioning of the State.

The State submitted that the Collectors were not furnished with neither a copy of the Enforcement Case Information Report nor the details of the investigation that was being conducted and thus were deprived of knowledge about the allegations.

The State also pointed out that the offences under the Mines and Minerals (Development and Regulation) Act 1957 and the Tamil Nadu Minor Mineral Concession Rules, 1959 were not part of the Schedule to the PMLA Act. Thus, it was contended that the summons was patently illegal. The State added that sand was a minor mineral which was the subject matter of Entry 23, List II of the Seventh Schedule of the Constitution over which the State had exclusive powers. Thus, it added that the ED was not entitled to enquire and investigate into the matters pertaining to the State List.

The State also submitted that the ED could not have issued summons under Section 50 of the PMLA as District Collector did not fall under the ambit of Section 50(1)(b) of the PMLA. It was further submitted that under PMLA, if any assistance was required for the enquiry, it had to be under Section 54 of the Act and the provision of Section 50 could not be resorted to.

It was further submitted that the District Collector was an executive authority undertaking the functions of the State whose acts were protected under Article 261 of the Constitution and thus, the ED ought not to have issued summons to the District Collector.

The State also pointed out that ED was exercising powers under the Prevention of Money Laundering Act in certain States with respect to alleged offences under the Mines and Minerals Act, when no such action was initiated in other States like Gujarat, Maharashtra, Madhya Pradesh, Uttar Pradesh where thousands of cases under the PMLA Act were pending.