In a sharp rebuke, the Supreme Court on Friday, February 23 questioned the State of Tamil Nadu for filing a writ petition before the Madras High Court challenging Enforcement Directorate (ED) summons issued to five district collectors in connection with a money-laundering case, as per the case titled “Directorate of Enforcement vs State of Tamil Nadu and ors.”
A bench comprising Justices Bela M Trivedi and Pankaj Mithal raised concerns, suggesting that the district collectors should have individually challenged the ED summons in their personal capacity. The bench emphasized that government servants are duty-bound to respond to such summons and cooperate with investigations.
Justice Trivedi questioned the state’s intervention, stating, “How can the State file a writ petition? Under which law? Against the ED? How is the State interested and able to file such petitions? … District collectors can file in their individual capacity. Government servants have to respond. How can you say you will not?! ED can probe with regard to scheduled offences as per Section 50 (PMLA).”
A bench of Justices Bela M Trivedi and Pankaj Mithal, while initially indicating an inclination to lift the interim stay on the summons imposed by the Madras High Court, eventually decided to issue a notice in the matter. The ED is investigating the case involving illegal sand mining, and the money laundering aspect is under scrutiny.
The Madras High Court, in November last year, had issued an interim order staying the operation of ED summons to the district collectors, asserting that prima facie, the ED lacked jurisdiction to issue such summons. The High Court termed the ED’s actions as appearing to be part of a “fishing expedition” and clarified that it had not imposed any stay on the ongoing investigation.
During the Supreme Court hearing, Additional Solicitor General SV Raju, representing the ED, argued that the district collectors are not accused but are considered witnesses in the investigation. He stated that the summonses were issued to collect information in their official capacities and emphasized that the collectors are not criminals.
Senior Advocates Mukul Rohatgi and Amit Anand Tiwari appeared for the Tamil Nadu government and the state’s district collectors, respectively. Rohatgi contended that the district collectors have the right to seek relief in court against the ED’s actions, similar to how the ED has filed petitions against the state government. He stressed that the collectors are not involved in any criminal activity and are not obliged to cooperate if the ED acts without jurisdiction, framing the issue as one of federalism.
Tiwari added that the ED’s summonses did not relate to a criminal or scheduled offense. He argued that the district collectors, being mere witnesses, are not obligated to comply with the summonses if the ED lacks jurisdiction. The court issued a notice to the Tamil Nadu government and the district collectors concerned, seeking their responses.
The Enforcement Directorate (ED) has claimed that approximately 24 lakh units of sand were illegally mined within two years, amounting to a staggering value of Rs 4,730 crore. The ED argued in the Madras High Court last November that this was a clear attempt by the state government to obstruct an ongoing investigation into money laundering and proceeds of crime.
The ED maintained that the total impacted area due to sand mining was 987.01 hectares, significantly surpassing the permitted mining area of 195.37 hectares. The agency presented credible scientific evidence, including drone and LiDAR surveys, bathymetric surveys, and satellite imagery processing, to establish the prevalence of rampant illegal mining in various districts. Seeking assistance from the National Remote Sensing Centre, ISRO, and IIT-Kanpur for a technical study, the ED informed the court that the actual value of illegally mined sand could be around Rs 4,730 crore, contrasting sharply with the Rs 36.45 crore officially recorded.
Amidst the revelations, R Devarajan, an executive engineer in the Water Resources Department who was under suspension, was dismissed from his post on November 28, 2023. In a video posted on social media, Devarajan implicated DMK Minister Duraimurugan, Additional Chief Secretary Sandeep Saxena, and Chief Engineer Muthaiya in the alleged Rs 4,730 crore scam case.
Furthermore, Gudiyatham Kumaran, recently ousted from the DMK, accused senior DMK Minister Duraimurugan and his MP son Kathir Anand of looting Rs 60,000 crores through sand mining. The political landscape has witnessed growing tensions as these allegations unfolded.
In a separate action, the ED, in February this year, seized a substantial number of excavators believed to be used in unauthorized sand mining in Tamil Nadu. Additionally, the bank accounts of sand quarrying contractors associated with the ruling DMK party were frozen by the ED, escalating the controversy surrounding the alleged multi-crore sand mining scam.
Simultaneously, the Tamil Nadu government has challenged ED’s summons to five district collectors in connection with the money laundering case before the Supreme Court. The apex court has questioned the state’s locus standi to file a writ petition, suggesting that the district collectors could challenge the summons individually. The case is scheduled for further consideration on Monday, February 26, setting the stage for a protracted legal battle.
The alleged sand mining scam has become a focal point of political and legal discourse in Tamil Nadu, with multiple actors, including the ED, state government, and implicated officials, contributing to the unfolding drama.
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