Centre moves SC to extend ED chief Mishra’s tenure to Oct 15

The justice Gavai-led 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”

The Union government on Wednesday moved the Supreme Court with a plea to let Enforcement Directorate (ED) chief Sanjay Kumar Mishra continue till October 15 instead of the court-mandated deadline of July 31, arguing his continuation is “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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The Centre’s application was mentioned before a bench led by justice BR Gavai by solicitor general Tushar Mehta, requesting an urgent hearing. Justice Gavai agreed to hear the plea at 3.30pm on Thursday.

The justice Gavai-led 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. Mishra can continue in office till July 31 to enable the Centre to initiate a “smooth transition in the larger public interest”, the bench had further directed in its judgment. The court order effectively cut short Mishra’s tenure by around three and a half months since he was otherwise set to demit office on November 16.

Seeking an extension for Mishra, the Centre’s application on Wednesday cited the upcoming peer review by FATF that, it claimed, 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.”

Five days before the deadline for Mishra to vacate the post has to end, the government told the court 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 will 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 “in larger public interest” 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 too when it defended the third one-year extension granted to the 1984-batch IRS officer 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.

“Though we have held that orders dated 17th November 2021 and 17th November 2022 granting extensions to respondent No.2 are not valid in law, we are inclined to take into consideration the concern expressed by the Union of India with regard to FATF review. We are further inclined to take into consideration that the process of appointing the Director of Enforcement is likely to take some time. In that view of the matter, we find that in order to ensure the transition to be smooth in the larger public interest, it will be appropriate to permit respondent No.2 to continue to be in office till 31st of July 2023,” the judgment on July 11 said.

Assisting the court as amicus curiae when the matter was argued in May 2023, senior advocate KV Viswanathan (now a Supreme Court judge) had called the government’s attempt to link Mishra’s tenure with the FATF review as self-contradictory. The amicus curiae had pointed out that Mishra could continue only up to November 2023 whereas the plenary discussions were likely to be held in the month of June 2024.

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. It noted that while the effect of the judgments of the court can be nullified by a legislative act by removing the basis of the judgment but a specific direction issued in relation to the parties in a case will remain binding.

The bench, which also comprised justices Vikram Nath and Sanjay Karol, held that though the Centre has the power to continue the tenure of an ED director beyond the mandatory two-year term, it could not have the granted the two extensions to Mishra in view of a September 2021 Supreme Court order in the Common Cause case, restraining any further extension to him.

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.