ED can't act like 'crook', must work within four corners of law: SC

The Enforcement Directorate (ED) cannot act like a "crook" and has to confine itself to the four corners of the law, the Supreme Court on Thursday said as it flagged low conviction rates in cases investigated by the Central agency.

"We are also concerned for the image of the Enforcement Directorate," a bench of Justices Surya Kant, Ujjal Bhuyan, and N. Kotiswar Singh said.

The top court is hearing pleas seeking a review of the 2022 verdict that upheld the ED's powers of arrest under the Prevention of Money Laundering Act (PMLA).

Additional solicitor-general S.V. Raju, appearing for the Centre and the ED, questioned the maintainability of the review petitions and attributed the low conviction rate to the delaying tactics of "influential accused".

"Influential crooks have a lot of wherewithal. They employ a battery of lawyers to file applications after applications at different stages to protract the proceedings and the investigating officer of the case instead of devoting time to investigation keeps on running to court for one application or other," Raju said.

Justice Bhuyan referred to one of his judgements and said of the 5,000 cases registered by the ED in the past five years, convictions were obtained in less than 10 per cent, and this factual statement was substantiated by the minister in Parliament.

"You can't act like a crook, you have to act within the four corners of the law. I observed in one of my judgments that ED has registered around 5,000 ECIRs in the past five years but the conviction rate is less than 10 per cent...That's why we have been insisting that you improve your investigation as it deals with the liberty of the individual," Justice Bhuyan said.

The judge continued, "We are also concerned about the ED's image. At the end of 5-6 years of judicial custody, if people are acquitted, who will pay for this?"

Justice Kant said the answer to all the problems was having dedicated courts akin to TADA and POTA courts, and the dedicated PMLA courts could conduct day-to-day proceedings, resulting in expeditious disposal of cases.

"Yes, influential accused will still file numerous applications but these accused and their lawyers will know that since it is day-to-day trial and their application will be decided the very next day. Time has come to hit them hard. We can't have sympathy for them. I know a magistrate who has to decide 49 applications in a day and pass orders for 10-20 pages in each of them. This cannot go on," he said.

Raju further noted the ED being "handicapped" after "influential accused" flee to different territories like Cayman Islands aside from dealing in crypto-currencies and other sophisticated methods and impeding investigation.

On the point of crypto-currencies, Justice Kant said the government ought to seriously think of regulating it as people were operating different apps and crypto stock exchanges.

He said Supreme Court Justice Joymalya Bagchi recently said in a case that the day was not far when bribe takers would accept bribes in crypto-currency, which would be very difficult for investigating agencies to trace.

Raju questioned the authenticity of the review petitions, calling them "nothing but appeals" against the 2022 verdict disguised as review.

"For the review, you have to make out a case for error apparent on the face of record in the 2022 verdict but they have not stated anywhere what is error apparent. If these reviews are admitted it would amount to rewriting the 2022 judgement," he said.

Raju contended that the constitutional validity of the PMLA was in their favour as the Constitution bench in 2019 in the Roger Mathew case upheld the validity of the statute.

"They (petitioners) took a chance and failed in that endeavour. Now they're saying, no, that was wrong and redo it. Review can't be an appeal in disguise. They must first demonstrate that there is an error apparent on the face of the record when it comes to these two issues. The error apparent on the face of the record should not be an error that should be fished out. Review cannot be for asking. They have to make out an exceptionally strong case for review," Raju said.

Justice Kant also enquired about the methodology adopted by ED during arrests and whether grounds of arrest and reasons for arrests were given to the accused.

Raju submitted there was no obligation on the ED under the statute to supply a copy of the ECIR (equivalent to an FIR) to the accused but courts in subsequent ruling stressed on sharing grounds and reasons of arrest with accused persons.

The hearing will continue next week.

In July 2022, the apex court in Vijay Madanlal Choudhary upheld the ED's powers to arrest, attach properties involved in money laundering, and carry out search and seizure under the PMLA.