'Maybe There Is Change Of Mind Due To Change Of Circumstance': Supreme Court On ED Seeking Adjournment Of Plea Against NDTV

The Supreme Court on Monday granted the Enforcement Directorate (ED) additional time to address its plea against New Delhi Television (NDTV), and scheduled the matter for August 12, 2024, marking it as a "last chance" for the ED.

A bench of Justice Abhay Oka and Justice Augustine George Masih was hearing ED's plea against Bombay High Court's order allowing NDTV to pursue compounding proceedings for alleged violations of the Foreign Exchange Management Act (FEMA) before the Reserve Bank of India (RBI).

After the advocate appearing for ED sought time and requested for the matter to be listed next week, Justice Oka remarked that there may be a shift in ED's stand due to changed circumstances.

"Maybe now there is a change of mind due to change of circumstances", he remarked.

The matter came for hearing in May this year after almost three and a half years since its last hearing on December 18, 2020. Since then, it has been adjourned three times at the instance of the ED.

NDTV was founded by Prannoy Roy and Radhika Roy in 1988 and emerged as one of India's prominent news broadcasters. In August 2022, the Adani Group announced its intention to acquire a significant stake in NDTV. The Adani Group's acquisition was conducted through its subsidiary, Vishvapradhan Commercial Private Limited (VCPL). The Adani Group effectively gained control over NDTV, owning over 64 percent of NDTV by March 2023.

Background of the case

NDTV faced adjudication proceedings initiated by the ED for alleged FEMA contraventions and decided to seek compounding. The compounding applications submitted to the RBI were returned. Consequently, NDTV filed a writ petition challenging this action of the RBI and the ED, which proceeded with the adjudication proceedings. Disposing of the writ petition, the Bombay High Court directed that the compounding proceedings pending before the RBI should continue, strictly in accordance with the law.

The HC, in its impugned order, directed the RBI to consider the compounding applications filed by NDTV. The HC bench of Justice SC Dharmadhikari and Justice Bharati Dangre also made significant observations while dealing with the arguments of Senior Advocate Janak Dwarkadas, who represented NDTV. Dwarkadas contended that the statutory position and status of high functionaries like the RBI, ED, and the Central Bureau of Investigation (CBI) were being undermined and compromised.

Although the HC disagreed with the senior counsel's arguments, it noted the distressing nature of NDTV's doubts about the independence and impartiality of these institutions. The bench stated that such beliefs should not be entertained or voiced in court, as they undermine the credibility and effectiveness of these institutions. The HC expressed its discomfort at having to record such arguments and hoped that all concerned parties would understand the depth of their concern.

The HC further emphasized the importance of maintaining public trust and confidence in these institutions. The bench remarked that those in charge of these institutions, as well as those in power, must understand that nothing is gained if the foundations of these institutions are shaken by political interference. It stressed that political parties, whether in power or opposition, should recognize that, like the Defence Forces, Police, and Judiciary, these institutions must retain public trust and confidence.

The judgment highlighted the crucial role of the ED, which enforces stringent laws like FEMA and the Prevention of Money Laundering Act (PMLA). The HC noted that these institutions are responsible for safeguarding India's foreign exchange resources, ensuring balanced payment management, and protecting the constitutional framework.

Concluding the 122-page judgment, the HC emphasized that these institutions are pillars of democracy. The HC stated that the earlier everyone realizes the importance of these institutions in protecting legal rights and maintaining safety, the better it would be. The HC expressed hope that it would not have to make such observations in the future and urged all parties to refrain from unnecessary attacks and uncalled-for criticism of these institutions.

Case no. – SLP(C) No. 2771/2019

Case Title – Directorate of Enforcement v. New Delhi Television Limited

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