NEW DELHI: The Supreme Court on Tuesday in its order allowed the appeal of the ED, and directed five District Collectors of Tamil Nadu to appear before the central probe agency, pertaining to the ongoing money laundering probe in the illegal sand mining case.
The order of the Apex Court is a huge setback for the TN state govt, who got reprieve from the Madras High Court, which stayed the ED summons against the DCs. Challenging this order, the ED had knocked the doors of the Apex Court seeking setting aside the HC order.
The two-judge bench of the Apex Court, headed by Justice Bela M Trivedi and also comprising Justice Pankaj Mithal pronounced the order today after hearing the arguments from TN and ED appeal.
It directed the concerned five Dcs to appear and respond to the summons issued by the ED in the ongoing money laundering probe in the illegal sand mining case.
While allowing the ED appeal, and refusing to upheld the HC order, the bench in its order noted that the Tamil Nadu's writ petition before the HC against the summons was prima facie appeared to be 'misconstrued' and based on a 'misconception of the law'.
It in its order, the Apex Court held that prima facie under section 50 of the PMLA , accused has to respect and respond to the summons issued by the ED. "The accused has to appear if called by the ED and produce evidence if needed in accordance to proceedings under PMLA law," the bench while pronouncing the order said.
In its order, the Top Court thereby suspended the operation and execution of the interim order issued by the Madras HC, staying the summonses issued to these 5 DCs.
The top court today granted interim relief to the ED, after hearing an appeal filed by it through the form of a Special Leave Petition (SLP) challenging the November 28 ruling of the HC staying the operation of these summons issued by the central agency under the Prevention of Money Laundering Act.
While passing the order, the bench cited that Article 256 of the Constitution obligates state governments to ensure compliance with laws made by Parliament. It also said that the ED had the power to summon individuals during investigations under the anti-money laundering statute.
Senior lawyer Kapil Sibal, for the TN govt, had told the Apex court that various judgements, including that of V Madanlal Chaudhary verdict, said that if only the offence is established, then the central probe agency can investigate the case against any accused anywhere in the country. But not certainly this case.
"There is no offence made out by us. The ED's jurisdiction is not that they should ask the officer to give informations on cases of so and so. There is no legal basis of saying that the state cannot file an appeal in the SC," Sibal had earlier told the Apex Court's two-judge bench.
Sibal also said that the collectors were not acting as individuals but as its representatives. "Is a district collector not a part of the State? Information was not sought from the collectors in an individual capacity. The state govt is aggrieved by an order of the ED asking information from an authority of the State. Four collectors in four districts have been asked by the agency to furnish whatever information that has been sought. So we are aggrieved and thereby we could definitely come to SC, Sibal told the SC.
After the ED issued the summons to the collectors in the alleged sand mining scam, the state filed a plea before the Madras HC. Based on the plea, the HC granted an interim stay on November 2023 on the operation of the summons, saying that the summons appeared to be part of a "fishing expedition", and prima facie, there was no jurisdiction to issue the summons to any of the district collectors. The state also had challenged the ED’s power to investigate such offences without the prior consent of the state govt.
