While giving bail to Shiv Sena leader Sanjay Raut on November 9, a court in Mumbai made scathing observations about the Enforcement Directorate, accusing the agency of selectively arresting individuals. The court also noted that the Enforcement Directorate has a tendency to arrest an accused person immediately but is then slow to prosecute them.
There have been several such instances recently where courts have criticised the agency for its investigation process. This criticism from the court comes after Opposition leaders and civil society members have condemned the central agency for using it vast powers under the Prevention of Money Laundering Act, 2002 to allegedly targets critics of the ruling Bharatiya Janata Party.
Sanjay Raut’s case
Sanjay Raut was arrested on August 1 in relation to an alleged money-laundering incident in the redevelopment of Patra Chawl, a building with several tenements in Mumbai. A scam of Rs 1,034 crore purportedly took place. Raut, who the agency claims also profited from this scam, allegedly used the money for personal expenses and to purchase real estate.
While deciding Raut’s bail applications, a Prevention of Money Laundering Act special court presided by MG Deshpande noted that his arrest was completely illegal. It said that the offences against him were of civil nature and could not be prosecuted under the Prevention of Money Laundering Act.
The court made several adverse remarks on the Enforcement Directorate’s conduct in this case. It said that the agency had used a “pick and choose strategy” while making these arrests as other accused in the case had not been arrested. It also noted that the Enforcement Directorate had taken “different self-contradictory rather self-destructive stands” regarding certain proceeds of crimes in this case.
In addition to this, the court said that Raut became the principal accused in a “miraculous twist”, where the agency “completely forgot” that in the main complaint they had attributed the main roles to other accused.
Raut’s arrest, which took place at midnight was unwarranted, the court said. “All this prima-facie indicates that his arrest is nothing but a witch-hunt and annihilation of his valuable rights,” the order read.
The way the Enforcement Directorate operated, the court said, “is nothing but conveying a message” to other politicians involved in the case “that, they are the next in the queue” to get arrested.
While passing this order, the court also made some general observations against the Enforcement Directorate. It said that the agency arrests individuals at an “extraordinary pace” but does not even work at a snail’s pace when it comes to conducting trials.
It noted that, in the last decade, since the special court was created for Prevention of Money Laundering Act trials, the agency had not been able to conclude a single trial.
‘Pick and choose’
Similar to Raut’s case, a court in Delhi on November 10 orally asked the agency why it had adopted a “pick and choose policy” in a case involving Bollywood actor Jacqueline Fernadez. The actor was not arrested while the other accused in the case were in jail.
The Enforcement Directorate is investigating allegations that Fernandez received gifts from alleged conman Sukesh Chandrashekhar, who is accused of embezzling Rs 200 crore and laundering money. On Tuesday, a Delhi court granted Fernandez anticipatory bail.
While not acting against some accused, on one hand, the agency has also been reprimanded for taking excessive action against others. In a case involving Aam Aadmi Party leader Satyendra Jain, a Delhi court had pulled up the agency in July for incorrectly mentioning Jain as a person who was responsible for companies accused of money laundering, when he was not associated with any of them. Jain was arrested by the Enforcement Directorate in May for allegedly laundering money and acquiring assets that are disproportionate to his income.
In August, while discharging an accused because an offence of money laundering was not made out, special court judge Deshpande, who also gave bail to Raut, called the Enforcement Directorate a “vengeful complainant” that sought to “humiliate accused persons” by keeping them in custody “in utter disregard” of the law. The agency had asked that the custody of the accused in the case be continued.
Delay in trials
In other instances, courts have criticised the agency for delaying trials. In February, Deshpande also granted bail to Yes Bank founder Rana Kapoor and eight other accused in a case relating to a wrongful sale of a property. While granting bail, he noted in his order that “the Enforcement Directorate has not shown any active approach to begin the trials of the cases, which have been pending since long”.
The special court judge again pulled up the Enforcement Directorate in June for a delay in a Rs 175 crore money laundering case involving security firm Tops Grup despite the Bombay High Court ordering the trial to be expedited. “Despite giving directions to ED and Special Public Prosecutor (SPP), no active and effective steps are taken in respect of cases relating to scheduled offences,” the judge said.
In contrast to this, there are some instances, where courts have reprimanded the agency for acting in haste. In April, the Supreme Court criticised the agency for sealing the properties of an accused despite knowing that the matter was sub-judice. The agency later apologised for its actions.
In one instance, a court imposed a fine on the agency. In October, the Supreme Court fined the Enforcement Directorate Rs 1 lakh for appealing an order of the Allahabad High Court that granted bail to an accused who suffered from cancer. The accused Kamal Ahsan was arrested in December 2020 for allegedly stealing Rs 22 crore from a state-run university.
The bail was awarded keeping the facts of the case in mind and such a petition misused the court’s time, the Supreme Court order noted.
This criticism from the court comes against the backdrop of several commentators arguing that the Enforcement Directorate has become a political tool to imprison Opposition political leaders. In July, Scroll.in reported how the Prevention of Money Laundering Act lacks basic safeguards for the accused and has expanded to include even minor crimes, thus shifting from its original purpose of curbing money laundering.
Under the Narendra Modi government, the number of raids conducted under the law has increased by 27 times, as compared to the United Progressive Alliance period. The conviction rate under the law is also extremely low. In around 5,400 cases in 17 years, there have only been 23 convictions – a rate of less than 0.5%.