Date of Judgement:
11 August 2021
Bench:
Justice P.B. Suresh Kumar
Parties:
Petitioner – Enforcement Directorate
Respondent – The State Of Kerala
Subject
In the following case, the power of the Enforcement Directorate (ED) to file and maintain a writ petition was called into question along with the power of the State Government to issue notifications outside their jurisdiction.
Overview
- The State Government of Kerala had issued a notification by exercising its power under Section 3 of the Commissions of Inquiry Act, 1952 for constituting a Commission of Inquiry. The object of this Commission was to ascertain whether the contents of a voice clip and a letter stated to have been issued by the accused persons in a gold smuggling case, reveal any conspiracy to falsely implicate the Chief Minister of Kerala in a criminal offence.
- The notification also stated that many investigating agencies have been investigating this case since July 2020, however, an attempt has been made to divert from the original purpose of the case to falsely implicate leaders of the political front in criminal cases, which was revealed and confirmed by the accused in this case. Thereafter, a writ petition was filed by the Enforcement Directorate against this notification.
- The Solicitor General of India(Mr. Tushar Mehta) appearing for the petitioner said that the subject matter of the case is a part of the Union List given under the Seventh Schedule of the Constitution, hence the State Government has acted out of its jurisdiction by passing such a notification. He further submitted that such inquiries would only impede and derail the investigations conducted in respect of serious offences.
- The Advocate General for the State (Mr. Gopalakrishna Kurup) objected as to the locus standi of the petitioner on the ground that ED is merely a Department of Central Government and is not entitled to file a writ petition. To support this objection, he relied upon the judgement of Chief Conservator of Forests, Govt. of A.P. V. Collector & Ors. He further submitted that if the Central Government is aggrieved by the said notification, the only remedy for them is under Article 131 of the Constitution.
Issues
- Does the Enforcement Directorate have the authority to file and maintain a writ petition?
- Whether the State Government has overstepped its jurisdiction by issuing notification for establishing such a Commission for Inquiry?
Legal Provisions
- Section 3 of the Commissions of Inquiry Act, 1952 – Power of the appropriate government to appoint a commission.
- Article 131 of the Constitution – Original jurisdiction of the Supreme Court in any dispute between the Government of India and any State.
- 48 of the Prevention of Money Laundering Act, 2002(PMLA) – Classes of authorities under the PMLA.
Judgement
- The State’s argument that the ED is not entitled to file and maintain a writ petition was rejected by the Supreme Court. It pointed out the notification issued by the Centre on 1st June 2000, which said that Officers of the Directorate exercise the powers of the authorities under the Prevention of Money Laundering Act, 2002(PMLA). Hence, the ED is certainly entitled to institute a writ petition.
- The Court also reiterated that when a Government Official, acting as a statutory authority, institutes a proceeding in its name, it will not be a proceeding on behalf of State or Central Government, but by the statutory authority as such. The Court relied on Section 48 of the PMLA and held that the Deputy Director of the ED is one of the statutory authorities and hence entitled to file a writ petition.
- Upon the question of Commission of Inquiry, the Court believed that in cases of such nature, the question of conspiracy must be examined by the Special Court who can supervise such investigation. Also, if such parallel inquiries are conducted, then it would impede and derail the investigation and would ultimately benefit the accused, which as a result would defeat the entire purpose of the legislation.
- Keeping in mind the aforementioned facts, the Court admitted the petition filed by the ED and granted interim relief in their favour.
Conclusion
In conclusion, it was held that the Directorate of Enforcement is a statutory body established by the Central Government under Section 36 of the Foreign Exchange Management Act, 1999 (FEMA). As per the notification of the Ministry of Finance on 13th September 2005, the Deputy Director of the ED has been notified as the Deputy Director for the purposes of the PML Act and hence, shall bear the power to file and maintain a writ petition.
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