ED director Mishra's tenure extended due to FATF review: Centre to SC

Centre defended in SC third extension of service granted to ED chief Sanjay , asserting it was due to a peer review being conducted by the FATF this year and said he will retire this November

The Centre on Monday defended in the Supreme Court the third extension of service granted to Enforcement Directorate chief Sanjay Kumar Mishra, asserting it was due to a peer review being conducted by the Financial Action Task Force (FATF) this year and said he will retire this November.

A bench of Justices BR Gavai, Vikram Nath and Sanjay Karol reserved its verdict on a batch of pleas challenging the third extension given to Mishra and the amendment carried out in law extending the maximum tenure of ED director to five years.

"Arguments heard. Order reserved," the bench said, as it directed the parties to file their written submissions by Friday.

Solicitor General Tushar Mehta, appearing for the Centre said, "This officer is not some DGP of any state but an officer representing the country in a United Nation like body and is in the midst of something. This court must not interfere with his tenure and from November onwards, he will not be there."

He said Mishra was given extension as FATF peer review is taking place in the country and there are some guidelines which need to be followed. FATF is a global anti-money laundering and terrorist financing watchdog. It sets international standards that aim to prevent these illegal activities and the harm they cause to society.

"He has been overseeing some important investigations related to money laundering and his continuity was required in the interest of the nation. He is not indispensable. This man will not continue after November, 2023. Peer review was earlier scheduled to be held in 2019 but was postponed due to COVID pandemic and is happening in 2023.

"Complete evaluations of activities of the country in taking steps to curb money laundering, terror financing etc takes place for a period of 18 months. Every member country has to go through this process and India is being assessed in the fourth round of mutual evaluation," Mehta said.

He said the current mutual evaluation process has already begun, the technical compliance submission has been done on May 5, 2023, the effective annex submissions is scheduled on the July 14, 2023, tentative onsite period will be November, 2023 and the plenary discussion will be scheduled in June 2024.

The bench, in the nearly three-hour hearing, asked if is it a case that minus one person, the Enforcement Directorate will be ineffective.

Mehta replied in the negative but said leadership does matter.

"It is not a case that he is not dispensable or if extension is given then some other person's chances of getting to the top position is compromised. There is no second or third person here. Appointment of ED director is a very rigorous process and a person is selected from a common pool of officers from IAS, IPS, IRS or others and he is to be in the rank of additional chief secretary", he said.

The bench asked Mehta, when did the government come to know about this FATF thing and why was this fact not brought before the top court when it pronounced its verdict in 2021 on the ED director's tenure.

"It appears from the record that the only thing which was put before the court at that time was that this officer was overseeing some important investigations and therefore his continuity was required or else investigations will suffer. Is FATF point not an afterthought?" he said.

Mehta said the government was aware of the FATF review in 2019 and the court was apprised about it during submissions, and the committee which recommended an extension for the officer was also aware of it.

The bench then asked Mehta to show the minutes of the meeting of the high-powered committee. The solicitor general showed the records of the meetings held in 2021 and 2022 which had the records related to FATF review.

Mehta said with the amendments carried out in the The Central Vigilance Commission (Amendment) Bill, 2021, the very basis of 2021 judgement was taken out and the present regime of giving the maximum tenure of five years was put in place.

Senior advocate KV Viswanathan, who is assisting the court as amicus curiae in the matter, said in his considered view the amendments carried out in the law were illegal and the extensions given to the officer were also illegal.

Senior advocate Gopal Sankaranarayanan, appearing for one of the petitioners, said the ED is one of the institutions which is investigating all kind of cases in every state of the country and therefore it needs to be sacrosanct and independent of the government in power.

"If the extension is used as a carrot and stick policy for extending the tenure of ED director, it will threaten the institution as it is one of those institutions which works directly under the Directorate of Revenue of the central government", he said.

Advocate Prashant Bhushan, appearing for NGO Common Cause said extensions can only be given in exceptional cases and not on a regular basis.

"Over the years, ED has become more powerful than CBI and 95 per cent of cases it is investigating are against people from opposition parties. Extensions of tenure to the ED director will compromise its independence,"he said.

On May 3, the top court had observed "Can one person be so indispensable?" as it had questioned the third extension of service given to Mishra despite the court's express direction that no further extension shall be granted to him.

The top court had said it had categorically held in its 2021 judgement that any extension of tenure granted to officers holding the post of Director of Enforcement after attaining the age of superannuation should be for a short period and clearly mentioned that no further extension will be given to Mishra.