CHENNAI: Madras High Court on Monday reserved orders in a batch of petitions filed by the state and collectors challenging the summons issued by ED in connection with alleged money laundering through irregularities in sand mining.
Posing questions on the legality of the agency holding a probe, the bench said, unlike other investigating agencies, ED needs to have a crime and proceeds of crime (tainted money). It can’t probe based on a survey. A division bench of Justices SS Sundar and Sunder Mohan, after about a two-and-half-hour argument by the counsel for government and ED, announced that orders would be pronounced on Tuesday.
Senior counsel Dushyant Dave, representing the state, contended that offences under the Mines and Minerals Act are not scheduled offences as per the Prevention of Money Laundering Act. Alleging that the agency is trying to hold a ‘roving inquiry’ on assumptions and presumptions 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 said even though a large number of cases of violations of mining have been registered in Uttar Pradesh, Maharashtra and Haryana, no action has been taken by the ED in these states where the government is run by the ruling party in the centre. Dave assailed the ED of attempting to ‘demoralise’ and create ‘fear’ in the minds of officers and said that if the agency finds tainted money concealed, let it seize that but not harass collectors.
Dave also said it is a case of malice in law and ED is ‘indulging in a colourable exercise’ of power. The state is ready to share all FIRs registered on violations of mining involving proceeds of crime, if any, but cannot furnish all other FIRs.
Additional solicitor general AR L Sundaresan denied the claim of doing a roving inquiry but only doing the duty to gauge and confiscate tainted money and acting based on the four FIRs filed on irregularities. He blamed the state of shielding certain persons and stopping the inquiry. “They have registered FIRs not only under sections of IPC but also under Prevention of Corruption Act. 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 bench, however, questioned, “How can you issue summons without identifying the proceeds of crime. The intention is something (else).” Posing questions on legality of the agency holding probe without even identifying tainted money, the bench commented that it can go ahead with the probe under other Acts.
“If you want to investigate on the proceeds of crime; then that is different. Unlike other investigating agencies, where nobody needs to set the law in motion, you can file the crime and go on investigate it. You need to have a crime and the proceeds of crime. You can’t say you did a survey and therefore you can probe,” the bench said.
The bench also said ED has every right to hold inquiry into the huge amount of bribe, as it seeks to, but not under the PMLA but under other Acts.