This is the second article in a two-part series. Read the first part here.
New Delhi: Last week, the Supreme Court has refused to entertain a plea filed by 18 political parties accusing the government of trying to “crush the entire opposition” using investigative agencies like the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED) on the ground that it cannot lay down guidelines in abstract without the factual context of individual cases.
The Wire looked at some ED cases which have stayed consistently in the headlines over the past nine years or where the politician – invariably from the Opposition – is in jail.
At least one lower court judge has made strong comments about the ED’s working. “There has to be an effective check against unscrupulous exercise of power by the ED in seeking casual extensions of judicial custody,” Mumbai special judge M.G. Deshpande had said last year while giving bail to two Mumbai builders. “This court strongly feels that it cannot join hands with [a] vengeful complainant like [the] ED to humiliate accused persons by continuing their judicial custody that too, in utter disregard to the recent law of the land.” [PDF]
The case of Nawab Malik, NCP
Judge Deshpande’s words chime with the goings on in the Nawab Malik case. The NCP leader has been in jail since February 23, 2022 for a land deal in what’s called the Gaowala compound in the Kurla area of Mumbai. A copy of the summons and the arrest memo were given to Malik after he was arrested in the ED office.
Malik’s family members say they purchased land in the Gaowala compound in two transactions in 2003 and in 2005 for Rs 10 lakh and Rs 15 lakh. One of these transactions was executed between the Maliks and the owners of the Gaowala compound, Maryambai Fazleabbas Gaowala, through Salim Patel. Coincidentally, Patel happened to be the driver of Haseena Parker, sister of underworld don, Dawood Ibrahim. The second transaction included Sardar Khan, the rent collector for Maryambai Fazleabbas Gaowala, as a party. Sardar Khan, an accused in the 1993 Mumbai bomb blast case, is in jail.
The ED’s case is that Gaowala’s daughter, Munira, has in a statement told the ED she did not sign the power of attorney which was fabricated by the Maliks to grab the property.
The Malik family got hold of records through an RTI which proved that the documents were signed in the Sub Registrar’s presence. The RTI also says the same document has been provided to the ED. The ED has not brought this document on the record and continues to say Malik has ‘grabbed’ the land. The ED also says Malik bought the land from the late Haseena Parker in 2005 even though the land was bought from her driver. The agency relies on a statement by Parker’s son who was 13 years old at that time.
The ED has relied on a statement of Sardar Khan that he was given Rs 5 lakh and not Rs 10 lakh as claimed, but bank statements reflect a payment of Rs 10 lakh. Khan is serving a life term in jail for the 1993 blasts and his statements therefore should not have much evidentiary value, says Malik’s lawyer, Rohan Dakshini.“The witness is not a credible witness and his statement can’t be the basis of keeping Mr Malik in jail,” he says.
What is even more interesting is that these statements have not been made before the ED in the Nawab Malik case. Instead, these were made in DHFL scam, which the ED has used against Nawab Malik.
Incidentally while the ED filed its complaint (equivalent to a chargesheet) within the mandatory 60 days, the court took cognisance only after five weeks, just before it broke for the summer. Malik’s bail plea came up once the court assembled after the break. A copy of the complaint can be given to the accused only once the court takes cognisance. An accused can only then apply for bail. The court took five months thereafter to hear the bail plea. Malik has moved court three times for bail which in one case was rejected by the lower court that relied upon the statement of Sardar Khan, who is serving a life sentence.
Responding to The Wire’s query, the ED says, “In all the cases, all actions taken by the ED have been approved by the concerned jurisdictional court from time to time. Moreover, as the questions posed by you pertain to sensitive cases and would amount to disclosing facts in pending cases where matter is sub-judice and also may pertain to disclosing investigating facts, which would not be proper.”
Since the Prevention of Money Laundering Act (PMLA) requires a predicate offence, the ED relied on an NIA complaint filed just three weeks prior to the arrest of Malik. Coincidentally, the FIR against Dawood Ibrahim and others filed by the NIA 30 years after the blasts is the first attempt that the anti-terror agency has made to bring the don to book. The FIR was filed February 3, 2022, and that too following directions from the Union home ministry.
The ED says The Wire is posing “unwarranted queries…It may be so that you are being used by some persons with vested interest to propagate their biased views and also to elicit sensitive information from ED through you under the garb of investigative journalism… It appears that most of the queries are based either on the information provided by the accused or anyone interested in the accused and is made with the oblique purpose of the accused.”
The National Herald Case
In the National Herald case, the main petitioner, Subramaniam Swamy, has, unusually, taken a stay from the high court against his own petition. The main case has not been heard for the past 13 months.
As an agency, the ED was traditionally “hamstrung” by the fact that a predicate or “primary” offence needs to be established first by a law enforcement agency like the CBI or the police before it can act. In 2015, a solution was found. ED’s acting director at the time, Karnail Singh, issued a circular which stated that if a court of law takes cognizance, the ED can move in. Citing the actions of a court therefore, allowed the ED to initiate a probe in the National Herald Case – which is based on a private complaint filed by Swamy. A trial court issued summons to the accused which the ED latched on to.
The ED told The Wire, “As far as ED is concerned, it can investigate cases, where a predicate offence exists. The existence of predicate offence need not necessarily be based on a FIR. It can also be based on a complaint filed in Court pertaining to predicate offence including the summoning order of the Court.” Except that in the National Herald case, there is no predicate offence. Only a private complaint filed by a politician.
Interestingly, the ED’s initial inquiry had been closed for want of a predicate offence but following the 2015 circular, the agency suddenly came into the picture in September that year.
In nine years, however, the ED probe has not moved beyond an ECIR, which is equivalent to an FIR. The ED has summoned Rahul Gandhi and Sonia Gandhi multiple times for recording their statements, with details of what they said being leaked to the media.
As for the original complaint, it was stayed at the pre-charge evidence stage itself. Swamy wanted to introduce income tax documents pertaining to the Gandhis which the court disallowed on the grounds that he had to be examined and cross examined before the documents could be brought on record. Under the Evidence Act, the person who is the “originator of the document” has to give witness, say lawyers for the Gandhis. Swamy wanted to bypass this. He also wanted to examine witnesses before his own cross examination could be completed. All of this was disallowed by the courts.
Thus, recording of pre-charge evidence started with the examination-in-chief of the complainant, i.e. Swamy, in July 2018. He sought six adjournments during this time and was cross examined on another four before he finally went to the high court and got a stay. But this was not before the additional chief metropolitan magistrate, Samar Vishal, had noted in his May 2018 order, “This is not serving any purpose but is in fact delaying the trail…the first date for leading prosecution evidence was 20.02.2016 and till now the evidence has not been started”.
In any case, even if the income tax violations as alleged by Swamy were proved to be true, the loss to the exchequer on account of the National Herald case would be Rs 39.86 lakh – much below the current threshold of Rs 1 crore for cases that should automatically trigger the ED’s involvement.
Vijay Agarwal, lawyer for the accused in the 2G scam, all of whom have now been acquitted, told The Wire, “All the time of the courts is being taken up in bail matters of the Enforcement Directorate and trials are pending endlessly. The ED itself admits it has managed a conviction in only 24 cases while the number of ECIRs recorded are 5906.”
The ever-curious case of Agusta Westland
In the Agusta Westland case, the first complaint was filed by the Congress government itself in 2013. The ED, which got involved in 2014, has since filed 11 supplementary complaints. Arms dealer Christian Michel has been in jail since December 2018, when he was extradited from Dubai where he was in detention for another four months. His bail application has been rejected six times while others similarly placed are on bail. His lawyer, Aljo K. Joseph, told the Supreme Court that 1280 documents and 250 witnesses need to be examined and the trial is unlikely to start for several years.
Interestingly, the UN Working Group on Arbitrary Detention has made some serious allegations against the governments of the UAE and India, stating that Michel was extradited “in return to Dubai by India of a high profile detainee” The reference is to Princess Latifa, the daughter of the prime minister of the UAE, who escaped to India while trying to flee her father in February 2018. She was forcibly detained by Indian Coast Guard and returned to her father. Michel was extradited December 4, 2018.
“The Working Group notes with concern the submission by the source, which has not been disputed by either government, that the approval by the United Arab Emirates of the extradition request made by India was a de-facto swap for the capture and return to Dubai of a high profile detainee, a swap reportedly authorised by the prime minister of India in March 2018…his deprivation of liberty lacks a legal basis.”
The main trial in this case is yet to begin. The ED told The Wire, “Wherever, the question regarding arrest etc. of accused have been raised in any judicial forum ED has adequately responded to the same by providing the correct information which have been accepted by the courts.”
‘Perfect recipe for curtailment of rights’
The Wire has reported on how the ED is exercising a lot of leeway in choosing what information it wishes to act on and what it would much rather ignore. While tracking the money trail in the Agusta case, the ED in its first and second complaints had mentioned that some of the funds were transferred to a Singapore based entity, Gudami International Pte Ltd, amongst others. Following a response from the Singapore government to a Letter Rogatory seeking details on some of these entities, while all other entities were pursued, the reference to Gudami International was quietly dropped. This company is said to be linked to Gautam Adani via his brother, and promoter of the Adani Group, Cypriot national Vinod Adani, whom The Wall Street Journal has termed an “elusive brother” of the top businessman.
Senior lawyer Siddharth Luthra says, “If you arm an investigator with vast powers, reverse the burden of proof, add twin restrictive conditions on grant of bail, make statements admissible and reduce judicial oversight on investigators powers, you have a perfect recipe for curtailment of presumption of innocence and restrictions on rights.”
He also said, “Add to that, the fact that under the guise of money laundering being a ‘standalone offence’ the ED alone is paramount in determining the contours of its power. The minor tweaking done by the SC 3 judge bench is limited in its scope. Till Parliament intervenes, the last bastion of hope is the pending review in the SC. As well as some high courts that have interpreted the provisions with a libertarian point of view and dropped proceedings in the past. We can only hope for more such courts.”
The cases against AAP leaders in Delhi
The ED can investigate the proceeds of a predicate or a primary offence that has been filed by an agency like the CBI. In the case of Aam Aadmi Party’s former Delhi health minister Satyendra Jain, it has gone one step further. The CBI says Jain was a shareholder in a jewellery company in which an amount of Rs 4.80 crore was received from some Kolkata based entry operators. The CBI’s case is that Jain’s share is 1/3rd of this amount based on the shareholding pattern of the company. In other words, the ED’s remit would have been to investigate the proceeds of this ‘one-third’. It has however said in its complaint that the entire amount of Rs 4.80 crore was earned by Jain. Besides, his lawyers say that even going by the Registrar of Companies documents submitted by the CBI, Jain’s shareholding ranges from less than 2 per cent to 19 per cent, which makes the portion accruing to him to be Rs. 57 lakh, i.e. well below the ED’s Rs 1 crore threshold. The PMLA allows for immediate bail if the amount is less then Rs 1 crore. But Jain has been in jail since May 30 last year.
Interestingly, the law also says that anyone who assists in money laundering is equally culpable and should be made an accused. Here, the Kolkata entry operators have been made a witness to the case.
The ED told The Wire, “Remaining queries are also factually incorrect, however we cannot share the details because of the sensitive nature of matters.”
In the case of another AAP leader, Delhi education minister Manish Sisodia, his lawyers say that the now-scrapped liquor policy was a collective cabinet decision, vetted by the departments of excise and finance and signed off by none other than the lieutenant governor, a Modi government appointee. Sisodia has been in jail since February 26 this year. Interestingly, in the third complaint filed by the ED on April 7, Sisodia’s has not been named as an accused.
The ED’s contention is that the 12 per cent profit margin the private entities got as per the policy was never discussed at the Group of Ministers meetings.
Strategic use of transfer of cases?
The ED has also been accused of pushing the boundaries of the law and getting cases transferred to New Delhi – to the Rouse Avenue court.
Anubrat Mondal, a close aide to Trinamool leader and West Bengal chief minister Mamata Banerjee , was booked for smuggling cattle across the border into Bangladesh. “The jurisdiction of the CBI case and the PMLA predicate offence is both Kolkata and yet the ED filed another money laundering case in Delhi and got the case transferred,” say Mondal’s legal team. Mondal is now lodged in Delhi’s Tihar jail.
Another case the ED wants shifted – from Chhattisgarh to Delhi’s Rouse Avenue – is the NAN scam of 2015 involving the erstwhile BJP government. After the Congress came to power, the ED waded in, in 2019, using the Chhattisgarh police’s FIR as a basis to file an ECIR. Now the ED wants the entire case transferred to Delhi. “The assumption of jurisdiction is misconceived and malafide,” says a lawyer for the Chhattisgarh government. The aim, he says, is to help the BJP by filing a closure and giving the BJP a clean chit.
The ED in its response to The Wire said, “As far as other cases are concerned, your allegations are incorrect. In all the cases, all actions taken by the ED have been approved by the concerned jurisdictional court from time to time. Moreover, as the questions posed by you pertain to sensitive cases and would amount to disclosing facts in pending cases where matter is sub-judice and also may pertain to disclosing investigating facts, which would not be proper. Wherever, the question regarding arrest etc. of accused have been raised in any judicial forum ED has adequately responded to the same by providing the correct information which have been accepted by the courts.”
In August 2021, the ED reportedly submitted a list of 122 elected representatives who are currently being investigated for money laundering charges to the amicus curiae, helping the Supreme Court in a matter related to delayed investigations against political representatives. Scroll.in reported that when it sought these details under the Right to Information Act, the ED declined to share them. However, The Times of India published a report featuring 52 names drawn from it. Nearly all belonged to Opposition parties.
The Indian Express reported in September 2022, that Since 2014, there had been a 4-fold jump in ED cases against politicians, with 95% being from the ranks of the Opposition.
Given the Supreme Court’s recent endorsement and even extension of the PMLA’s most stringent provisions – which help load ‘money laundering’ cases even more heavily against those who appear in the Centre’s cross-hairs – the role of the ED and other central agencies is bound to remain a matter of interest and concern. Sooner or later, the Supreme Court will need to examine the ‘systemic’ questions which the ED’s actions will continue to throw up.