Refusing to Let go of ED Director, Union Govt Makes Another Request of SC to Extend His Tenure Till October

On Wednesday, the Union government filed an application asking the Supreme Court to extend Sanjay Kumar Mishra’s tenure till October 15.

Mishra is the incumbent director of the Enforcement Directorate (ED). The government contends that the extension is vital in view of the ongoing peer review of the Financial Action Task Force (FATF).

FATF is an independent international body that provides recommendations to prevent and combat money laundering and terror financing. Its secretariat is located at the Organisation for Economic Cooperation and Development headquarters.

Background

Mishra’s tenure at the top of the ED has been under the scanner ever since November 2020, when a case was filed against a Union government Order that extended his tenure with a retrospective effect, making it a three-year tenure against the initial two years, even though Mishra had attained superannuation in the interregnum, that is, before the expiry of the two years.

In September 2021, the Supreme Court refused to quash the Order. However, it issued a mandamus prohibiting extensions to Mishra’s tenure beyond November 17, 2021, when was to complete three years of his tenure.

On November 15, 2021, the Union government introduced amendments to the Central Vigilance Commission Act, 2003 (CVC Act) and the Delhi Special Police Establishment Act, 1946 that deal with the appointment of the heads of ED and Central Bureau of Investigation. 

The amendment provided that the period of office of the director of ED could be extended by up to one year at a time, with no further extension after completion of a five-year term.

On July 11 this year, a Supreme Court Bench comprising Justices B.R. Gavai, Vikram Nath and Sanjay Karol held that the extensions given to Mishra as director of the ED, after the court had issued a mandamus in the matter, are illegal.

The judgment permitted Mishra to continue in office till July 31. His tenure was previously scheduled to expire on November 17.

What does the application contend?

Quoting the judgment, the present application notes that the Bench had taken into consideration the sensitivities of national security involved in the FATF’s review process in allowing Mishra to hold office till July 31.

In the application, the Union government claims that any change or transition in leadership “would significantly impair the ability of the agency to provide necessary assistance to and cooperation with the assessment team and thereby adversely affect India’s national interests”. 

The application, while delving into the review process, explains that the peer review assesses technical compliance with FATF recommendations and reviews the effectiveness of a country’s anti-money laundering and countering of financing of terrorism systems.

The application contends that the submissions on technical compliance and effectiveness were made on May 5 and July 21 respectively and the on-site visit is scheduled for November this year. 

It claims that the review process is at a “critical juncture”, making it “essential to have an individual who is well acquainted” with the process to be at the “helm of affairs” of the ED.

According to the application, when the assessment team visits, it will have “a large number of questions” about  the system being followed in the country.

It further claims that the questions may relate to technical compliance and effectiveness of the system, hence any lapse in answering the queries can adversely affect the review process.

While defending  the continuation of Mishra as ED, the application states that Mishra has been engaged in the preparation of documents and other requirements for India’s mutual evaluation since 2020.

It explains that according to the provisions of the Prevention of Money Laundering Act, 2002, the ED director seeks and provides assistance to foreign jurisdictions for collecting evidence and other such documents.

The ED also seeks and provides “assistance on an informal basis amongst enforcement agencies and through other informal channels” such as Interpol, the application avers.

In conclusion, the application prays the court to pass directions to extend Mishra’s term as director of ED up to October 15, in the “larger public interest”.

Repeated arguments

It is noteworthy that most of the submissions in the application were also a part of the arguments of the Union government during the last hearing before the three-judge Bench.

On May 4, the Union government had justified Mishra’s extension on the ground that Mishra was considered the only competent authority having the expertise to deal with the FATF on the performance of the country in certain areas.

To this contention of Mehta, Justice Gavai had raised concern over the argument about Mishra’s indispensability, and enquired whether there is no other competent person in the organisation and whether anyone could be indispensable.

“If [Mishra] completed five years in November 2022, what would have happened? Would you have come up with a new amendment that increased the tenure limit from five years to six years?” Justice Gavai had asked Mehta.

Sarah Thanawala is a staff writer at The Leaflet.