The judges said that by issuing summonses, the ED had ventured on a “fishing expedition” to identify the possible proceeds of the crime.
The ED revealed that around 24 lakh units of sand were illegally mined to the tune of ₹4,730 crores within two years.
In a setback to the Enforcement Directorate (ED), the Madras High Court on Tuesday, 28 November, stayed the summonses issued by the agency to five district collectors in Tamil Nadu seeking their appearance with the details of sand mining quarries in their respective districts.
However, the court did not bar the agency from continuing the investigation into the illegal sand mining in the state.
A bench, comprising Justices SS Sundar and Sunder Mohan, said in its order: “This court is prima facie convinced that without identifying the proceeds of crime involved in the scheduled offence, the respondent (ED) is trying to reach the possible commission of the scheduled offence,”
The judges also said that by issuing the impugned summonses, the ED had ventured on a “fishing expedition” to identify the possible proceeds of the crime.
The court stated the inquiry the DC wanted to hold with the district collectors was not related to any assistance required for an offence under the Prevention of Money Laundering Act (PMLA).
“This court finds that the investigation of the respondent is not in relation to the existence of proceeds of crime but to find out whether a scheduled offence has been committed,” said the judges.
They also said that they would continue hearing the batch of petitions challenging the powers of the ED to investigate the matters of mines and minerals, which were exclusively under the state government’s control.
Granting three weeks’ time to the ED to respond to the pleas, the court adjourned the case to 21 December.
On 17 November, the ED summoned the district collectors of Tiruchy, Vellore, Ariyalur, Karur, and Thanjavur to appear in person before it with the details of sand mining allowed in their respective districts. Shocked over the summons, they escalated the issue to the chief secretary of Tamil Nadu.
After consulting with the advocate general, the chief secretary gave a green signal to the collectors to challenge the summonses before the Madras High Court. The state government also got senior advocate Dushyant Dave to appear on behalf of the collectors.
The senior counsel contended in court that the move of ED was a challenge to federalism, and that the central agency lacked the powers to interfere in mines and minerals, which was a state subject.
The state government also submitted that there was no scheduled offence made out in the case, and that the ED could not summon the officers who were in no way connected to the case.
Meanwhile, the ED maintained that as per Section 50 of the Act, an officer of the ED was empowered to issue summons to any person be it a private individual or an officer holder.
The ED also submitted that there was rampant illegal mining in Tamil Nadu, which were offences under Sections 417, 418, 419, 420, and 471 of the IPC. It added that so far 987.01 hectares were illegally mined, while the allowed area was 195.37 hectares.
The agency also revealed that around 24 lakh units of sand were illegally mined within two years, and that this was worth ₹4,730 crore.
After the Madras High Court order on Tuesday, sources from the ED said that the agency would challenge it in the Supreme Court.
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