Supreme Court slams ED, questions low conviction rate in PMLA cases

The top court criticised the Enforcement Directorate, saying it "cannot act like a crook", citing concerns over its low conviction rate and the need to safeguard individual freedoms

The Supreme Court on Thursday criticised the Enforcement Directorate (ED) during hearings in two separate cases, questioning its low conviction rate under the Prevention of Money Laundering Act (PMLA) as well as its functioning and extensive powers. One SC bench remarked that the agency “cannot act like a crook” and must operate within the boundaries of law, The Times of India reported.

 

SC questions ED in BPSL insolvency case 

In the first matter, a Bench led by Chief Justice of India BR Gavai heard review petitions related to the Bhushan Power & Steel Limited (BPSL) insolvency case. The court had earlier recalled its May 2 verdict that had directed the liquidation of BSPL, in which it had invalidated a resolution plan submitted by JSW Steel, calling it unlawful and in violation of the Insolvency and Bankruptcy Code (IBC).

 

During the hearing, the ED’s role and investigation in the BPSL case came under scrutiny. Solicitor General Tushar Mehta represented the probe agency.

 

“What is the conviction rate?” asked Justice Gavai. Mehta responded that conviction rates were low even in other penal offences, attributing this to delays and procedural inefficiencies. “Even if they are not convicted, you have been successful in sentencing them almost without a trial for years together,” Justice Gavai observed, referring to prolonged pre-trial custody and stringent bail conditions under the PMLA.

 

Mehta pleaded that the agency had recovered and returned nearly ₹23,000 crore to victims of financial crimes.

 

‘You cannot act like a crook’: SC' rebukes 

In a separate hearing, a three-judge Bench comprising Justices Surya Kant, Ujjal Bhuyan and N Kotiswar Singh, while considering review petitions against the 2022 judgment in the Vijay Madanlal Choudhary case, expressed concern over the ED’s functioning. In July 2022, the Supreme Court upheld all the challenged provisions of the PMLA in the case. The court had affirmed the wide-ranging powers granted to the Enforcement Directorate (ED), including restrictive bail conditions and the authority to investigate and arrest.

 

The SC bench observed that the agency could not act like a crook and had to operate within the four corners of the law. Justice Bhuyan said that there is a “difference between law-enforcing authorities and law-violating bodies”. “See what I observed in one of the cases… it came true in what a minister said in Parliament. After 5,000 cases, less than 10 convictions… That’s why we insist on improving your investigation, witnesses… we are talking about liberty of people,” said Justice Bhuyan.