Faced with the Supreme Court’s repeated refrain from cooperating with a Directorate of Enforcement (ED) probe into “illegal” sand mining, a defiant Tamil Nadu asked the court on February 26 to first declare that the Central probe agency has the power to investigate “any offence” in the country.
Appearing before a Bench of Justices Bela Trivedi and Pankaj Mithal, Tamil Nadu counsel, senior advocates Kapil Sibal and Amit Anand Tiwari, firmly said the ED had no jurisdiction under the Prevention of Money Laundering Act (PMLA) to investigate sand mining.
They said the agency could not just summon five District Collectors under the PMLA and ask them to bring along their Aadhaar copies, passport size photos, list of sand mining sites, GPS coordinates of the mining sites, etc.
Mr. Sibal said sand mining was not a scheduled offence listed under the PMLA. Besides, the FIRs registered in the sand mining affair relate to the districts of Thanjavur, Dindigul, Theni, and Thoothukudi. However, the ED had issued summons to the District Collectors of Vellore, Ariyalur, Karur and Tiruchi.
“But your officers should help the ED investigate these offences,” Justice Mithal told Mr. Sibal.
“If that is so, then Your Lordships may say the ED can investigate any offence in this country... Please say that...,” Mr. Sibal responded.
He pointed to Section 66(2) of the PMLA to show that it was the ED that was supposed to cooperate with the States.
“If the ED is investigating any offence, and in the course of that investigation it finds any information about the commission of a predicate offence, it has to send the documents/information to the State investigating agencies… So, it is the other way around,” Mr. Sibal argued.
Additional Solicitor General S.V. Raju, for ED, said the Tamil Nadu Government wanted the Central agency to abide by its “whims and fancies”. The State had “stepped into the shoes of the accused”. It had acted against the spirit of federalism by moving the Madras High Court to get a stay in November last year on the implementation of the summons to the District Collectors.
Derailing the probe: ED
“An attempt was made by the State Government to block and derail the lawful investigation of the ED against the proceeds of the crime generated out of illegal sand mining. The State of Tamil Nadu came to the rescue of the sand mafia,” the ED said accusing the Tamil Nadu Government. The ED said several State officials had conveyed that they were under pressure from their “top seniors” to not cooperate with the probe.
Justice Trivedi asked Mr. Sibal how the State was aggrieved by the summons to the District Collectors. The Bench asked how the State found it necessary to move the High Court against the ED.
“Isn’t the District Collector not part of the State?” Mr. Sibal asked.
Justice Trivedi persisted that the State had to comply with the PMLA, a law enacted by Parliament.
Scheduled offences
“PMLA only deals with scheduled offences. Sand mining is not a scheduled offence under the Act. ED simply does not have jurisdiction to ask District Collectors to produce records... The scope of enquiry here is not restricted to money laundering, but to the offence of sand mining, that too, without any evidence of the proceeds of the crime... What is the investigation they are doing? Where is the FIR?” Mr. Sibal challenged.
The court listed the case for hearing on Tuesday.
This is the second time the ED and the Tamil Nadu Government have engaged in a tug-of-war in the Supreme Court. They had clashed recently in the top court over criminal proceedings initiated by the Tamil Nadu Directorate of Vigilance and Anti-Corruption (DVAC) against ED officer, Ankit Tiwari. The State had seen multiple raids and searches conducted by the ED in the last few months.
In its appeal against the November 2023 stay order, the ED said efforts were under way 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.
