CHENNAI: In a big setback to the Enforcement Directorate in the probe into alleged laundering of money acquired through financial irregularities in sand mining in Tamil Nadu, the Madras High Court on Tuesday stayed the operation of the summons the agency has issued to five district collectors asking them to appear before it with details of sites of sand quarries and mining activities.
The interim order was passed by a division bench of Justices SS Sundar and Sunder Mohan on ten petitions filed by the state government and the district collectors. However, the court did not restrain the agency from going ahead with its probe.
The interim stay was granted after the court found the ED was proceeding with the investigation without finding the existence of the tainted money.
“This court is prima facie convinced that without identifying the proceeds of crime involved in the scheduled offence, the respondent (ED) is trying to reach the possible commission of the scheduled offence,” it said. It further stated by issuing the impugned summons, the ED ventures into a “fishing expedition” to identify the possible proceeds of crime.
The bench also stated the inquiry it wanted to hold with the district collectors is not related to any assistance required for an offence under PMLA.
This court finds that the investigation of the respondent is not in relation to the existence of proceeds of crime but to find out whether a scheduled offence has been committed, it added.
During arguments, 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 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 in the Centre. He assailed the ED of attempting to ‘demoralise’ and create ‘fear’ in the minds of the officers.
However, the ED said that as per the report of the expert team, as against the permitted mining area is in the 28 sand mining sites of 195.37 hectares, the actual mining impacted area is 987.01 hectares. The volume recorded in WRD books is 4.05 lakh units sand mined, but the actual volume is 27.70 lakh units resulting in excess mining of 24 lakh units.
An affidavit filed by it revealed that the total sale value of illegal excess sand mined in the past 1-2 years comes to Rs. 4,730 crores as against recorded revenue of merely Rs. 36.45 crore, which is even less than 1%. Additional Solicitor General (ASG) AR L Sundaresan, representing the agency, termed the total proceeds of crime in the offence as Rs. 4,730 crore which was looted from the State Exchequer and the public of the state.
The bench has adjourned the arguments on the writ petitions, challenging the powers of ED to intervene to hold a probe into matters of mines and minerals which are exclusively under the State government’s control, to December 21.