ED chief can stay in office till Sept 15: SC

In its order, the bench also declared that Mishra shall cease to be the director of ED with effect from midnight of September 15-16

Citing “larger public interest”, the Supreme Court on Thursday allowed Enforcement Directorate (ED) chief Sanjay Kumar Mishra to continue till September 15 instead of its previous deadline of July 31, as the Centre argued that Mishra’s continuation was essential for a positive review by the Financial Action Task Force (FATF) that will grade India on its laws being compliant with the international protocols on tackling money-laundering and financial terrorism.

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While the Union government moved the court a day ago to let Mishra continue till October 15, a bench led by justice BR Gavai granted the 1984-batch Indian Revenue Service (IRS) officer an extension of tenure till September 15.

“Taking into consideration the larger public interest, we are inclined to permit him (Mishra) to continue for some more period. We allow his continuation as ED director till September 15. We add that no further application would be entertained for grant of extension,” said the bench, which also comprised justices Vikram Nath and Sanjay Karol.

In its order, the bench also declared that Mishra shall cease to be the director of ED with effect from midnight of September 15-16.

“In ordinary circumstances, we would not have done it. But we have taken into consideration the national interest too. At the same time, we have made it clear that he cannot occupy the post after September 15. This is the last extension,” the bench remarked as the proceedings ended.

The bench had, on July 11, quashed the government’s decision to grant two extensions of tenure to ED director Mishra in 2021 and 2022 and termed these orders “illegal” because they came after a court order that said no further extensions be given to him. It had allowed Mishra to continue in office till July 31 to enable the Centre to initiate a “smooth transition in the larger public interest”. The court order effectively cut short the officer’s tenure by around three-and-a-half months since he was otherwise set to demit office on November 16.

At the outset of the hearing on Thursday, when solicitor general (SG) Tushar Mehta submitted that Mishra’s continuity was necessary for the upcoming peer review by FATF, the bench retorted: “Are you not giving a picture that your entire department is full of incompetent people and that you cannot function without one person? Is it not demoralising for the force that there is no other person capable of handling things?”

Justice Gavai, who is line to become the Chief Justice of India in May 2025, added: “If I happen to be a CJI and something unfortunate happens, will the Supreme Court collapse?”

Responding, Mehta and additional solicitor general SV Raju said that no person is indispensable, but Mishra’s continuity was essential in national interest since the FATF review will lead to the credit rating of India, besides impacting country’s reputation across the globe.

Raju further said: “There are attempts to bring down India’s ratings. Two neighbouring countries, one big, one small, are actively trying to ensure that India fall in its standing during the FATF review. They are trying that India falls in the grey list.”

Appearing for a batch of PIL petitioners, senior counsel Abhishek Manu Singhvi, Anoop G Chaudhary and advocate Prashant Bhushan, strongly opposed the Centre’s plea, arguing that ED is just one of the agencies that the FATF review considers, and that the Union government could not argue that the fate of entire nation depends on the shoulders of one man – Mishra. They added that the Centre’s application was in the form of a review since the top court had already considered the aspect of the FATF review when it nixed the two extensions granted to Mishra by its judgment on July 11. It was also pointed out that the FATF review will go on until the end of 2024 and therefore, it was amusing why the government was seeking an extension only till October 15.

Seeking an extension for Mishra, the Centre’s application filed on Wednesday spoke upon the upcoming peer review by FATF which, it stressed, makes it “essential to have an individual who is well-acquainted with the overall status of money laundering investigations and proceedings across the country and also the intricacies of the procedures, operations and activities of the investigating agency, at the helm of affairs at the Directorate of Enforcement”.

It added that “any transition in leadership at the Directorate of Enforcement at this stage, would significantly impair the ability of the agency to provide necessary assistance to and co-operation with the assessment team and thereby adversely impact India’s national interests”.

Sounding the alarm bells that any adverse report by FATF could invite several international sanctions, the Centre maintained that Mishra has been engaged in preparation of documents and other requirements for mutual evaluation of India since the beginning of 2020. “Accordingly, his continuation in this arduous and delicate process is essential,” it said.

“The intricacies of complex money laundering investigation may also need to be explained to them, which can be done only by a person with hands-on experience... During next two to three months the assessors will be seeking and asking follow-up questions and clarifications which needs to be examined and responded to. For this purpose, guidance and leadership at a very senior level is required,” stated the plea, adding the assessors are likely to visit India for a period of three weeks in November.

Calling the circumstances peculiar, the Centre’s application pleaded with the court to pass appropriate directions to extend Mishra’s tenure as ED chief till October 15.

Notably, the Centre had argued the point of the FATF review before the bench previously when it defended the third one-year extension granted to Mishra in November last year. But the bench had still decided to give the Centre time till July 31 to replace Mishra with a new ED director.

In its July judgment, while the court affirmed the Centre’s 2021 amendments to the pertinent laws to extend the tenure of the Central Bureau of Investigation (CBI) director and ED chief up to a maximum of five years, it said these could not be used to defend Mishra’s extension because its writ cannot be nullified using a law.

Mishra’s extensions were challenged through petitions moved by Congress leaders Randeep Singh Surjewala, Jaya Thakur, Trinamool Congress MP Mahua Moitra, and others.

Mishra was initially appointed as ED director for a two-year tenure ending November 2020. Before his tenure came to an end, he was granted a one-year extension that was challenged in the top court by an NGO, Common Cause. By a judgment in September 2021, the court allowed the extension, noticing that the tenure was coming to an end in about two months. However, the judgment was clear that no further extension was to be granted to Mishra.

On November 15, 2021, the Centre brought amendments to the CVC Act and the DSPE Act governing the appointment of heads of the two agencies. This allowed the government to extend the tenure of CBI and ED chiefs for a period of three years beyond their two-year tenure by granting extensions of one-year each.