ED v. Tamil Nadu | Can't There Be Judicial Oversight Before Coercive Orders Are Passed? Supreme Court Asks ED

The Supreme Court today posted to March 20, 2024 a plea by the ED seeking transfer of investigation into bribery allegations against one of its officers from Tamil Nadu State authorities to CBI.

The order was passed by Bench of Justices Surya Kant and KV Viswanathan, to enable the agency to file a rejoinder.

Simultaneously, notice was issued in a connected petition filed by the accused-ED Officer against a Madras High Court order. The Bench requested the High Court to decide the officer's default bail plea in the meantime, on merits, irrespective of the January order staying further proceedings.

The hearing had begun with ASG SV Raju apprising the court on behalf of ED that Tamil Nadu government had filed a counter on Saturday, which the agency would have to go through and probably file a rejoinder. He then drew attention to an interim application filed by the State of TN in the ED's petition, which was listed for hearing.

Noting the same, Justice Kant said to Snr Adv Kapil Sibal (appearing for TN), "it is their writ petition...if you have anything, you file your petition".

In response, Sibal stated that the sand mining issue had been raised by ED in the present case as well, and urged, "That issue should be decided by your Lordships, because what they are doing is that they are calling Collectors to give information...this is the very issue pending before your Lordships".

Replying, Justice Kant said, "This is not pending...before us, the issue only pertains to..."

Sibal interjected, "Mining issue is pending, it is part of the writ petition...second prayer (alleged conduct of the State in illegal sand mining involving more than 4700 crores) relates to it"

The ASG however clarified, "That is pending before a coordinate bench"

Hearing the counsels, Kant, J dismissed the State's interim application as not maintainable, with liberty to pursue remedy in accordance with law.

At this point, Sibal informed that the respondent-state was desirous of playing a video contained in a pendrive, which showed the accused-ED officer accepting bribe red-handed as well as the trap proceedings.

In response, the ASG was quick to clarify, "I am not protecting him"

Sibal countered, "You may not be protecting... [but] you have asked for stay of his prosecution. ED officers have started taking money...he [accused ED officer] says I have taken 15 lakhs, the rest are for higher-ups"

Snr Adv Siddharth Dave (appearing for accused-officer), added, "I have never come against a case more manufactured...one month the trap proceedings are going on, highly unusual"

Highlighting ED's grievance, the ASG alleged, "we will not spare him, but problem is this...in the guise of this investigation, our office is being ransacked"

After hearing the above submissions, the Bench opined that in the ED matter, it was confining itself to the FIR which pertains to Central government employees against whom State police is proceeding. This aspect, it was said, has to be examined in the context of Delhi Special Police Establishment Act.

Interrupting, Sibal pointed out, "that matter is pending in a suit filed by State of West Bengal against the Union of India"

Kant J responded: "That suit may take one year, two years...". In reply, Sibal clarified that he was only bringing the fact to the court's notice.

Moving forward, Kant J observed that in the present case, both sides (State and Central government) are making allegations against each other. However, because of the allegations, "no corrupt officials should take undue advantage, law must take its own course". The Judge asked the parties to suggest a fair and transparent mechanism which would take the investigation to a logical conclusion.

At this juncture, Sibal sought to give a hypothetical example of a Central government employee who commits murder. Interjecting, Viswanathan J said, it should be about "affairs of the Centre" in "discharge of duties". The Judge also enquired if judicial oversight could be brought both ways before any coercive steps are taken.

When Sibal sought to rely on certain Electricity matters where sanctions were sought for persons who took bribes and the Court held that the same was not part of "affairs of State", Kant J expressed, "the law is well-settled...where the offence is committed in purported exercise of the official position, or misusing the official capacity and the nature of the offence is directly relatable to the official responsibility which the delinquent officer holds, the charges or the FIR against that officer is to be investigated by the state police, or by the central agency?"

In reply, Sibal asserted that such cases have been historically investigated by state agencies. He lamented the ED's stance, saying "now [they are saying] because he is a central government employee, and because it's part of list 1, you cannot prosecute".

Adding, Sibal claimed that if this course is allowed to prevail, Central government will get immunity. Responding to one of Kant J's queries, he also stated that if cases where there were no trap proceedings were handed over to ED, the accused won't be prosecuted.

Posing another challenge to Sibal, Viswanathan J said that Section 197 CrPC employs the phrase 'discharge of duties' but Section 19 of the Prevention of Corruption Act does not. The Judge also made reference to Section 17A of the PC Act.

On Sibal's apprehension over the transfer of investigation, Kant J said that CBI Courts are in every state and evidence will be collected at local level only.

Turning to maintainability of the petition itself, Sibal contended that ED could not have filed an Article 32 petition on behalf of the accused Officer. Kant J countered that ED was not asking for exoneration of the officer.

ASG Raju asked if an officer of the State government has some evidence, is ED not entitled to call him? "You are entitled, but what is wrong if there is judicial oversight? Why shy off?" remarked Viswanathan, J in reply.

The ASG further submitted that in the guise of picking up the accused officer, TN State officers were ransacking ED office, taking important documents pertaining to other cases (including those against Ministers) without summoning them.

Sibal denied the same vehemently, saying, "kindly see what they are doing...Enforcement Directorate talks about mining scam when there is no predicate offence and mining is not a scheduled offence...and he is asking that Collectors give all details...they have paralyzed the administration of the state...we have assisted in all the cases we have come...but if ED says to a Collector that you come and give me your 10 year returns, you bring everything, where it's not a scheduled offence, what are we supposed to do? The High Court quashed it, now this Court says you give it"

Taking objection, Kant, J said "You can't comment on court's judgment". Sibal defended his remark relying on orders as per which he was entitled to say that a judicial order is not fair(Note : The order passed by a coordinate bench of the Supreme Court lifting the Madras HC stay on ED summons to TN District Collectors is being referred to here) . Be that as it may, the ASG disagreed.

In closing, the Court directed the Registry to list the matter on March 20, after obtaining orders from CJI DY Chandrachud.

Previously, the bench had stressed the need to have a mechanism which can ensure fair investigation in cases involving the officials of the State and the central agencies.

Case Title: Directorate of Enforcement v. The State of Tamil Nadu, W.P.(Crl) No. 23/2024 (and connected matter)