What is the prejudice caused: SC To Tamil Nadu on ED summons to collectors

The Supreme Court on Monday once again quizzed the Tamil Nadu government as to how it was aggrieved by the action initiated by the Enforcement Directorate against the state officers in a money laundering case related to sand mining.

The top court told the counsel that the state or its officers should help the ED in finding out if any offence is made against any person since the state has to comply with laws enacted by the Parliament.

“If the state machinery is asked to help, what is the prejudice caused,” a bench of Justices Bela M Trivedi and Pankaj Mithal asked senior advocate Kapil Sibal and Additional Advocate General Amit Anand Tiwari, appearing for Tamil Nadu government.

The bench also said if the district collector was aggrieved, he could have moved the court in an individual capacity.

"Is he (collector) not part of the state," Sibal asked the bench which said under Article 256 of the Constitution, states have to comply with central laws

The bench cited the enactment of Prevention of Money Laundering Act by the Parliament.

To this, Sibal said mining is not a scheduled offence.

On February 23, the Supreme Court questioned the TN government for challenging summons issued to five district collectors by the ED in connection with a money-laundering case.

The bench had then asked the Tamil Nadu government counsel, how the state can file writ petition before the High Court, under which law and that too against the ED.

Sibal said the ED is concerned with money laundering and it cannot investigate a predicate offence, it has no power under PMLA to investigate a predicate offence. “Now, in this case the state is filing a writ petition because the authority of the state has been asked to produce documents in respect of leases qua which there is no scheduled offence,” Sibal said.

Sibal said there is provision Section 66(2) of PMLA, the ED is investigating any offence in the course of which it finds information with the commission of a predicate offence, it sends the documents to the investigating authority of the state, and not the other way around.

"ED cannot say please give us information of some offence that is not the jurisdiction of the ED and they are asking information from an authority of the state and the state is aggrieved and the authority (district collector) is also aggrieved, and what is the legal basis of saying that the state cannot file the writ petition," Sibal asked.

“That is our query,” the bench said.

Sibal said there should be a formal notice so that the state can file an affidavit, and the matter is listed before high court in March first week.
"Anyway your lordships have already determined, your lordships may decide. It is quite clear," he said. The bench told Sibal, “It is up to you whether you argue or not, we issue notice and we will see".