Supreme Court Disposes Of ED's Plea, Tamil Nadu Govt Says District Collectors Will Share Documents Relating To Sand Mining Cases

The Supreme Court today disposed of the Enforcement Directorate's plea assailing stay of summonses issued to District Collectors of Tamil Nadu in connection with alleged illegal sand mining-money laundering cases.

The bench of Justices Bela M Trivedi and Satish Chandra Sharma closed the proceedings, noting that most of the documents sought by ED from the District Collectors had been supplied and the ones remaining were agreed to be supplied within a week.

Dictating the order, Justice Trivedi said,

"Learned counsel for the petitioner (ED) says that there are about 36 documents/FIRs which are still not available with them and a list of which has already been handed over to the counsel for the respondents. Learned counsel for the respondents(State of TN) states that the respondents shall furnish the copies of the said FIRs within a week. In view of the above, no further orders are required to be passed in the present set of SLPs. Hence, the SLPs stand disposed of accordingly."

It was noted that as per an office report, certain review petitions filed by the respondents were pending. Upon Senior Advocate Kapil Sibal's statement that the respondents were not inclined to go forward with the matter, the same were also disposed of.

To recap, the Court was dealing with special leave petitions filed by ED against a November 2023 ruling of the Madras High Court, whereby the operation of summonses issued by ED to District Collectors of Vellore, Trichy, Karur, Thanjavur and Ariyalur Districts was stayed. Notably, the summonses were stayed as the High Court was of the view that ED was conducting a "fishing and roving" enquiry without ascertaining the existence of proceeds of crime. However, the investigation was allowed to continue.

Subsequently, the Supreme Court stayed the Madras High Court order and directed the District Collectors to comply with ED's summonses. When appearance was entered by them, an issue arose that certain documents sought by ED from the Collectors were not supplied. Thereafter, the matter was adjourned on some occasions to oversee the status of production of documents. In view of the statements made by the parties today, the proceedings were finally closed.

Background

The legal controversy can be traced back to an interim order passed by a division bench of the Madras High Court, staying summonses issued to district collectors in Tamil Nadu in connection with alleged illegal sand mining-money laundering cases. While the investigation was permitted to proceed, the High Court granted three weeks for ED to respond to the case.

Before the High Court, the Tamil Nadu government contended that the Mines and Minerals (Development and Regulation) Act constituted a self-contained code, suggesting that the central agency lacked investigative powers under this legislation. It was also pointed out that the offenses under MMDR Act were not scheduled offences for the purposes of Prevention of Money Laundering Act, in support of the state government's argument that the ED had exceeded its jurisdiction by issuing summonses.

Contrarily, the probe agency defended its actions and refuted any allegations of a fishing expedition. The ED questioned the maintainability of the petitions, highlighting that none of the petitioners were accused in the case. It also went on to argue that rampant illegal mining in Tamil Nadu constituted offences under various sections of the Indian Penal Code and the Prevention of Corruption Act. These, the ED asserted, were scheduled offences that fell within its jurisdiction to investigate. The Tamil Nadu government and its officers were also accused by the central agency of attempting to shield potential offenders.

On February 27, 2024, the Supreme Court suspended the interim order passed by the High Court. It was opined that Tamil Nadu government's writ petition challenging the summonses (before the High Court) appeared to be misconstrued. Further, the Court highlighted that Article 256 of the Constitution requires state governments to comply with laws made by Parliament and ED has the authority to summon individuals during investigation under PMLA.

The Tamil Nadu government argued against ED's jurisdiction over 'mining offences' and questioned why ED sought personal documents like passports and Aadhar cards. However, the Supreme Court maintained that the District Collectors were obliged to comply with the summonses and directed that they "appear and respond to the summons".

On March 1, ED issued fresh summons to the District Collectors. The Collectors, instead of appearing, sent replies to ED seeking postponement, stating that they were engaged with election-related duties in connection with the upcoming Lok Sabha elections and were discharging social welfare schemes in Districts. The Collectors also stated that they did not have the data related to mining and sought time to collect the same from other offices.

On April 2, the Supreme Court chastised the District Collectors for refusing to appear before ED. Be that as it may, it gave them one more opportunity and directed that they personally appear before the ED on April 25. On May 6, ED told the court that while the District Collectors appeared before it, they did not produce documents sought by it. As such, the court directed ED to submit a report.

In compliance of the order, ED filed a report mentioning the documents which four District Collectors did not provide. However, this claim was disputed by the Tamil Nadu government and the District Collectors. On a subsequent date, the Court permitted ED to give a list of specific documents/FIRs which the District Collectors/Tamil Nadu government had not provided or which were not getting downloaded from the relevant website.

Appearance: Senior Advocate Kapil Sibal (for District Collectors); Senior Advocate and AAG Amit Anand Tiwari for Tamil Nadu government

Case Title: Directorate of Enforcement v. State of Tamil Nadu & Ors., SLP (Crl) No. 1959-1963 of 2024 

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