Need to put in place checks and balances for ED investigations: Supreme Court

The court stressed that in a “quasi federal set-up”, there could be an independent body to look into interstate ramifications of a probe

The Supreme Court on Thursday suggested that a pan-India mechanism with “best practices” be evolved to ensure that a political standoff between state governments and the Enforcement Directorate (ED) do not impede the conduct of “free and independent” criminal investigations into money laundering and corruption cases.

The bench, on its part, stayed further investigation in the case against the arrested ED officer for the time being. (AP)

Seeking a response from the Tamil Nadu government in two weeks, the court also stayed further investigation against an officer of the ED, arrested by the state police on December 1 on charges of bribery and extortion, and sought the DMK government’s response on why the investigation should not be transferred to Central Bureau of Investigation (CBI) — as requested by the federal agency in its petition that was heard on Thursday.

A bench of justices Surya Kant and KV Viswanathan emphasised that it is high time a mechanism be put in place with adequate checks and balances to ensure genuine cases of corruption and money-laundering do not suffer, but at the same time, there are no mala fides in prosecuting people.

“Some kind of best practices have to be evolved, particularly where the ruling parties are different at the Centre and in states...there should be some mechanism providing for a screening before actions are taken to eliminate apprehension of ‘political vendetta’. Simultaneously, in all this, we cannot allow those guilty to go scot-free,” added the bench, noting the acrimonious exchange between the senior counsel representing the ED and the MK Stalin government.

Read Here: ED cannot be a law unto itself, says SC

While solicitor general (SG) Tushar Mehta, appearing for the agency, accused the Tamil Nadu government of shielding the corrupt, senior counsel Kapil Sibal and Amit Anand Tiwari, both representing the Tamil Nadu government, accused ED of being used by the Centre to perpetrate political vengeance vendetta against states ruled by the Opposition parties.

Responding, the top court stressed that in a “quasi federal set-up”, there could be an independent body to look into interstate ramifications of a probe, ensuring the guilty are punished while there are no vindictive arrests.

The court set about the exercise from the state of Tamil Nadu, which was made a party by the ED in its petition that accused the state machinery of “employing such actions to obstruct its lawful investigations against powerful individuals, including ministers and government servants”.

ED’s petition raised the issue of the alleged non-cooperation of the Tamil Nadu government in sharing criminal complaints and first information reports (FIRs) concerning offences under the Prevention of Money Laundering Act (PMLA) in the wake of the arrest of its officer, Ankit Tiwari, by the state police’s anti-corruption wing last month on the charges of extortion and bribery. Demanding the transfer of the probe against the ED officer to CBI, the federal agency complained that it is unable to investigate matters due to non-sharing of information of predicate and scheduled offences that form the basis for the agency to register separate cases under PMLA.

Read Here: Be transparent, not vindictive in probes, SC tells ED

Arguing for ED, SG Mehta on Thursday complained that the Tamil Nadu government has blocked the online link to access FIRs lodged by the state police, crippling the money-laundering probe into several cases.

Rebutting this, Sibal and Tiwari alleged that ED was vindictive towards states being ruled by the Opposition parties and that the agency made no such demands about FIRs from BJP-ruled states.

While Mehta clarified that the agency was itself asking for action against Tiwari if the allegations of bribery were correct, he added that the Tamil Nadu government cannot protect its ministers and other high-profile accused by refusing to share the FIRs registered against them in the predicate offences.

The bench, on its part, stayed further investigation in the case against the arrested ED officer for the time being, and asked the Tamil Nadu government to come back with a proposed mechanism for dealing with such cases in two weeks. It also directed the state government to adduce the incriminating materials collected by the state police in the case.

Read Here | Cannot arrest for not responding to questions: Supreme Court tells ED

“Meanwhile, you find a solution for a fair and independent investigation which will ensure no one goes scot-free. We have to evolve a mechanism and apply it to all states. You can suggest a module, like the state police can investigate under monitoring of a senior DGP or a retired high court judge...the composition can be on a pan-India basis and officers could change on a state-to-state basis,” the bench told Sibal and Tiwari.

As Sibal questioned why the exercise should include only the state of Tamil Nadu, the bench clarified that the present case is only a “trigger”.

“The larger issue is of best practices...We will start with one state under our supervision and monitoring. We have to first evolve a mechanism and then that [mechanism] can be emulated by other states. At the same time, we are clear that allegations and counter allegations cannot be allowed as a paradise for those involved in corrupt practices,” it said.

The bench told the SG and Sibal that though it is not recording anything specific in its order, there will not be any further investigations into the FIR lodged by the state police against Tiwari until the next date of hearing.

Read Here | No retrospective effect of order on ED to disclose grounds of arrest: SC

It also issued notice on ED’s petition seeking the Tamil Nadu government to share information on FIRs filed in the state relating to predicate offences.

On December 1, the state police arrested Tiwari, alleging that he had been caught “red-handed” while accepting a bribe of ₹20 lakh from a doctor in the Dindigul district. Following Tiwari’s arrest, the ED office in Madurai was subjected to a 10-hour search. A press release issued by the state police’s headquarters in Chennai after the arrest claimed that Tiwari was threatening and extorting money from several people under the pretext of “closing their cases”.

Later last month, the Tamil Nadu police registered another case against officials of ED and others on charges of preventing investigators of the Directorate of Vigilance and Anti-Corruption (DVAC) from discharging their duties.

In its petition filed before the top court, ED claimed that the state has a “deliberate design” in not cooperating by “conspicuously preventing” the agency from accessing FIRs, and not even uploading them in the public domain. The petition also raised questions over recent raids at the ED office in Madurai on December 1 following Tiwari’s arrest.