Union Govt Justifies ED Chief's Extension Citing FATF Review; 'Is There No Other?' Asks SC

Solicitor General Tushar Mehta sought to impress upon the court that the FATF's once-in-a-decade peer review of India's performance in curbing terror financing necessitated Sanjay Mishra's extension last year.

New Delhi: The Supreme Court has asked sharp questions to the Union government over the extension of Enforcement Directorate chief Sanjay Kumar Mishra’s tenure, which the government said was necessary to ensure continuity during a key review.

Hearing challenges to this on May 2, an apex court bench of Justices B.R. Gavai, Vikram Nath, and Sanjay Karol said, “Is there no other competent person in the entire agency?”. The judges said this when the Union government said that Mishra’s tenure had been extended to ensure continuity in leadership ahead of the Financial Action Task Force preview this year, LiveLaw has reported.

By an order on November 19, 2018, Mishra was first appointed the ED director for a period of two years. His term would expire in November 2020. In May that year, he reached the retirement age of 60.

Through an office order on November 13, 2020, his appointment letter was modified retrospectively by the Union government and Mishra’s term of two years was altered to ‘three years.’

In September 2022, the Supreme Court bench of Justice L. Nageswara Rao upheld the extension, saying that such retroactive revisions are only allowed in the “rarest of rare cases” but that no further extension can be given to Mishra.

Several petitioners challenged this 2020 order, among with two 2021 ordinances promulgated three days before Mishra’s retirement date, amending the Delhi Special Police Establishment Act, 1946, and the Central Vigilance Commission Act, 2003. Bills from these ordinances led to the legalisation of the extension of tenures of the CBI and ED chiefs for a year at a time till five years.

Last year, 2022, Mishra was given another extension. This latest – and third – extension and the amendments to the CVC Act have been challenged afresh.

Representing the Union government on Wednesday, May 3, Solicitor General Tushar Mehta sought to impress upon the court that the FATF’s once-in-a-decade peer review of India’s performance in curbing terror financing necessitated Mishra’s extension. The rating would reflect on India’s stock and share market, SG Mehta said. He also said that the peer review was supposed to take place in 2019-2020 but was pushed back due to COVID-19.

Also read: Piecemeal Extensions to CBI, ED Chiefs Will Damage Agencies’ Independence: Amicus Curiae

“That was one of the major factors why we amended the provision and tried to take away the basis of the judgement. This was so that a new person may not be forced to interact with international peers who would be rating us on a number of parameters. The person who has been interacting with the task force would be best suited to handle them and answer their many questions. Facing the peer review would require not only the factual background of the past years, but also a different level of skill, which an individual may acquire only after they have worked in that particular capacity for a while,” SG Mehta said, according to LiveLaw.

This is when Justice Gavai of the bench asked if there was no other person in the “entire organisation competent to discharge these responsibilities.”

“Even if we accepted your argument, what will happen beyond 2023 when Mishra finally retires? What will happen to the Directorate of Enforcement then? If he had, for instance, completed the five-year period that has now been set as the outer limit, what would have happened? Would you have allowed, instead of five years, six years, by an amendment?” Justice Gavai asked.

Mehta cited the example of negotiating diplomatic talks for fugitive extradition.

“It is not a simple matter of a successor reading the file and taking over. The incumbent shares diplomatic relations with their foreign counterparts, they have had discussions that are not made part of the record. At that level, not everything is in writing,” the SG said.

The SG said continuity is paramount.

“This is not about an individual, but the effective performance of the entire country,” he said.

The SG also appeared to argue that the one year extensions after the initial two-year period would stop a person from becoming a law unto himself. The 2 + 1 + 1 + 1 year term would stop such a thing from happening, when a three-year extension would not he said.