Undermining Autonomy: On Judicial Endorsement of a Tenure Extension System

Undermining Autonomy: On Judicial Endorsement of a Tenure Extension System 13 Jul 2023

Context: 

Recently, the Supreme Court has asked the Enforcement Directorate (ED) Director to resign four months before his third extension ends in November.

Image Source: Hindustan Times

Background: 

  • 2018: Mr. SK Mishra is appointed as the Enforcement Directorate (ED) Director for a two-year term.
  • 2020: The original appointment of the ED Director is retrospectively amended to extend the tenure to three years.
  • 2021: The Supreme Court (SC) directs the government to stop granting extensions to the ED Director.
  • 2021: Amendments are enacted to the Central Vigilance Commission Act and the Delhi Special Police Establishment Act.
    • These amendments allow a maximum of three annual extensions (totaling a term of five years) to the Directors of the Central Bureau of Investigation (CBI) and ED, based on the recommendation of High-Level Committees.
    • Previously: CBI and ED chiefs had fixed tenures of two years.

The High-Level Committees for Extensions of Service:

  • For the ED Director: The panel consisted of a five-member committee comprising the Central Vigilance Commissioner and Vigilance Commissioners.
    • They were responsible for recommending whether an ED Director should receive an extension in service.
    • The committees were required to provide written reasons supporting their recommendations.
  • For the CBI Director: The High-Level Committee for the CBI Director included the Prime Minister, Opposition Leader, and the Chief Justice of India.
    • This committee was responsible for recommending whether a CBI Director should be granted an extension in service.
    • Like the ED Director committee, this committee also had to provide written reasons to support their recommendations.

Recent Supreme Court Ruling:

  • On Tenure Extension: The Supreme Court declared the consecutive service extensions granted to ED Director in 2021 and 2022 as illegal. 
    • As a result, the court ordered the present ED Chief to resign by July 31, facilitating a smooth transition to a new chief.
  • On 2021 Amendments: Regarding the amendments made to the Central Vigilance Commission Act, 2003, and the Delhi Special Police Establishment Act, 1946, the Supreme Court upheld their constitutionality.

Conclusion:

At a time when there is a cloud of suspicion over the misuse of government agencies against political opponents, the Court’s endorsement of a tenure extension system designed to undermine their independence is not conducive to the rule of law.

About ED:

  • The Directorate of Enforcement is a multi-disciplinary organization mandated with investigation of offence of money laundering and violations of foreign exchange laws.

Evolution of ED:

  • 1956: The Enforcement Unit was founded within the Department of Economic Affairs of the Ministry of Finance.
  • 1957: The Enforcement Unit was renamed as the Enforcement Directorate.
  • 1960: The administrative control of the Enforcement Directorate was transferred to the Department of Revenue.
  • Post-Liberalization Era: The nature of the Enforcement Directorate changed as India underwent economic liberalization.
    • FERA 1973 was repealed, and the Foreign Exchange Management Act, 1999 (FEMA), came into operation on June 1, 2000.

The Present Mandate of ED: Presently, the ED deals with four laws

  • The Prevention of Money Laundering Act, 2002 (PMLA)
  • The Foreign Exchange Management Act, 1999 (FEMA)
  • The Fugitive Economic Offenders Act, 2018 (FEOA)
  • Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA)

Powers of ED:

  • Admissibility of Statements:
    • Statements recorded before an ED investigation officer (IO) are admissible as evidence in court under the Prevention of Money Laundering Act (PMLA).
  • Non-Bailable Offences:
    • All offences under the PMLA, which the ED deals with, are classified as non-bailable.
  • Custody Procedures: Individuals in ED custody are sent to the nearest police station’s lock-up, irrespective of its status.
  • Challenges in Property Attachment:
    • Once the ED attaches properties belonging to an accused, it can be a lengthy and challenging process to retrieve those assets.
  • Burden of Proof on the Accused:
    • Unlike regular criminal law, under the PMLA, the burden of proof lies with the accused rather than the prosecutor.
    • Accused individuals are required to furnish proof in their defense, making it harder to deal with the ED’s investigations.

News Source: The Hindu

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