CHENNAI: Madras High Court on Monday reserved the orders on the batch of petitions filed by the Tamil Nadu government and the concerned district collectors challenging the summons issued by the enforcement directorate (ED) in connection with alleged money laundering through financial irregularities in sand mining in the State.
A division bench of Justices SS Sundar and Sunder Mohan, after about two and half an hour charged up arguments by the counsels for the State government and the ED, announced that the orders would be pronounced on Tuesday.
Senior counsel Dushyant Dave, representing the State government, contended that offences under the Mines and Minerals Act are not scheduled offences as per the Prevention of Money Laundering Act (PMLA).
Alleging that the Central agency is trying to hold a ‘roving inquiry’ on assumptions and presumptions in the garb of illegality in sand mining and purveying beyond its jurisdiction, he said, “Action has been taken only in non-BJP ruled states and it is violative of federal principles.”
He pointed out that even though as many as 8000 cases of violations of mining have been registered in Uttar Pradesh, 4000 cases in Maharashtra and 4,500 in the small state of Haryana, no action has been taken by the ED in these states.
He assailed the ED of attempting to ‘demoralise’ and create ‘fear’ in the minds of the officers and stated that if the agency finds tainted money is concealed by somebody, let it go and seize that money but not harass the district collectors who cannot be summoned by the agency directing them to come with information on all the sand mining quarries in the State.
Dave said it is a case of malice in law and the ED is ‘indulging in a colourable exercise’ of power and seeking information using roving enquiry which cannot be permitted in law.
He added that the state government is ready to share all the FIRs registered on violations of mining involving proceeds of crime, if any, but cannot furnish all other FIRs.
Irregularities to the tune of Rs. 4,500 crore: ED
Responding to the arguments, additional solicitor general (ASG) ARL Sundaresan told the court the ED’s action is based on the four FIRs filed on the illegalities in sand mining.
Saying that irregularities to the tune of about Rs. 4,500 crore are found to have been committed, he blamed the state government for shielding certain persons and stopping the inquiry.
“Rampant irregularities are there in sand mining in the state where the government is running the sand sale. They have registered FIRs not only under sections of IPC but also under the Prevention of Corruption Act (PCA). By illicit quarrying, proceeds of crime are created. If the proceeds of crime are concealed, ED is entitled to investigate and confiscate them,” he said.
The ASG also informed the court that an aerial survey conducted by the experts of IIT has revealed large-scale excessive quarrying.
Court’s posers
The bench, however, questioned him whether the proceeds of the crime had been identified. and whether the agency can proceed on mere suspicion of the generation of tainted money.
“How can you issue summons without identifying the proceeds of crime? The intention is something (else),” the bench remarked.
Limited powers
Posing probing questions as to the legality of the Central agency holding the investigations into the irregularities without even identifying the proceeds of crime, the bench commented the agency can go ahead with the investigations under some other acts but not under PMLA whose scope is “limited”.
“If you want to investigate on the proceeds of crime; then that is different. Your objective may be laudable but your powers are limited. Unlike other investigating agencies, where nobody needs to set the law in motion, you can file the crime and go on to investigate it. For you (ED), it is different. You need to have a crime and the proceeds of crime (tainted money). You can’t say you did a survey and therefore you can probe,” the bench said.