The Supreme Court on Tuesday directed four District Collectors in Tamil Nadu to appear and respond to the summons issued by the Directorate of Enforcement in the “illegal” sand mining case, saying the State’s legal fight against the central agency was “strange, unusual and prima facie misconceived”.
“The District Collectors are bound to provide information to the ED. We are taking a stand here. You [State of Tamil Nadu] made an unnecessary issue out of nothing,” Justice Bela M. Trivedi, heading a Division Bench addressed senior advocates Kapil Sibal, Mukul Rohatgi and Amit Anand Tiwari, appearing for Tamil Nadu and the District Collectors in question.
The apex court lifted the stay passed by the Madras High Court in November last year on the ED summons to the District Collectors. The State and the District Collectors had separately moved the High Court against the summons. The next hearing in the High Court is scheduled on March 5. But the Bench said the High Court case may have become infructuous now.
“The District Collectors shall appear and respond to the summons in question issued by the ED on the next date indicated by the ED,” the Bench ordered.
It observed that Section 50(2) of the Prevention of Money Laundering Act (PMLA) empowered the ED to summon “any person” whose attendance was considered necessary for giving evidence or production of records in the course of “any investigation or proceeding” under the statute. Section 50(3) mandated that the individual summoned was “bound to attend in person or through authorised agents” and would be required to make truthful statements and produce the required documents.
Poser to Tamil Nadu
During the hearing, Justice Trivedi asked how the State of Tamil Nadu was “aggrieved” by the ED summoning the District Collectors of Vellore, Ariyalur, Karur and Tiruchi for information linked to the sand mining case.
Mr. Sibal said the ED was supposedly probing four FIRs registered in Thanjavur, Dindigul, Theni, Thoothukudi. The District Collectors summoned were not concerned with these four districts. There were neither FIRs nor proceeds of crime to back the ED’s summons to the four officers. Sand mining was not a scheduled offence under the PMLA, he argued.
Mr. Rohatgi, appearing for the District Collectors, said the ploy was to glean information from the District Collectors, get an FIR lodged and then begin an investigation under the PMLA.
“The ED cannot say we will ask you [District Collectors] for information of mining in your jurisdiction for which there is no FIR as of now. We will examine the mining contracts, then examine the scheduled offences, then ask the police to file an FIR and then, finally, I [ED] will have jurisdiction under the PMLA… The summons is based on mere inferences,” the senior lawyer submitted.
Additional Solicitor General S.V. Raju, for the ED, said the Central agency would certainly summon officials and seek information if the proceeds of crime had travelled from one district to another and was invested in mines in the latter place.
“The ED is not limited by territorial limitations to summon people under Section 50 of the PMLA,” Mr. Raju said.
He submitted that the agency had written to the State several times for information, but had hit a wall.
“This litigation is actually a ploy to find out what investigation is going on… so they can cover their tracks. A State government is supposed to be fair,” Mr. Raju said.
In its appeal against the November 2023 stay order, the ED said efforts were underway to “unearth the nexus between the illegal miners, officials and local mafia in the State”. It said searches were conducted in 34 places across Tamil Nadu in September last year, leading to seizure of currency, incriminating documents and digital devices.
The ED has referred to an expert study that the value of excess sand mining in Tamil Nadu came to ₹4,730 crore against the recorded revenue of ₹36.45 crore earned by the State government.
