A three-judge Supreme Court Bench was hearing the petitions challenging the third extension given to Sanjay Kumar Mishra as the director of the Enforcement Directorate. Solicitor General Tushar Mehta explained that the amendment in the Central Vigilance Commission Act, 2003 to give Mishra another extension was brought in since Mishra was the only competent authority with expertise to deal with the Financial Action Task Force on the performance of the country in certain areas.
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ON Wednesday, a three-judge Supreme Court Bench heard Solicitor General of India Tushar Mehta’s claim that the continuity of Sanjay Kumar Mishra as Director of the Enforcement Directorate (ED) has transboundary implications and it is essential for the peer review process of the Financial Action Task Force (FATF). The Bench, comprising Justices B.R. Gavai, Vikram Nath and Sanjay Karol, was hearing the petitions challenging the third extension given to Mishra as director of ED.
In September 2021, the Supreme Court had refused to quash the Union government’s order extending the tenure of Mishra with 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 two years. The court had, however, clarified that Mishra would not be given any further extension beyond November 17 when he completes three years of his tenure.
On November 15, 2021, the Union government, however, 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. Section 25(d) of the CVC Act that deals with the appointment of officers of ED was amended. The amendment made it so that the period of office of the director of ED could be extended by up to one year at a time. It also stated that no extension of tenure could be granted after completion of a five year term by the ED director.
On Wednesday, Mehta, appearing on behalf of the Union government, expressed his serious objection to members of the Indian National Congress filing the petition, whose senior functionaries are facing serious allegations by the ED, he claimed.
To this contention, Justice Gavai raised the question of whether a court could disallow a petition merely on the ground that the petitioner belongs to a political party. Mehta replied in the affirmative and said that the Bench is hearing a public interest litigation, which has to be limited to the public interest.
Justice Gavai pointed out the argument of the petitioner that public interest is attracted on account of the breach of mandamus issued by the court, which specifically directed that Mishra cannot be granted any further extension. Mehta urged the Bench to not entertain the petition filed at the behest of those facing allegations from the ED and who seek to pressurise the agency of the ED.
Mehta emphasised that it is not the government, but the members of the CVC that appoint the director of the ED. He urged that the CVC enjoys “extraordinary independence”. The extension of one year, which is under the CVC’s discretion, is provided under the CVC Act to ensure that the official does not “become a law unto himself”, he added.
On the reasoning for the amendment, Mehta argued that it was brought in “not for the love of any particular individual”, but on the ground that the CVC Act has transborder implications. He apprised the court that a conscious decision was taken by the global community that individual countries in domestic jurisdiction cannot combat money laundering by themselves. Continuing in this strain, the FATF was constituted under the aegis of the United Nations (UN), wherein all member countries needed to be compliant with its 40 principles to be implemented in a particular manner.
It must be noted that FATF does not function under the UN, but is an independent international body whose secretariat is located at the Organisation for Economic Cooperation and Development headquarters.
Mehta explained that in order to decide if each member country is complying with this global framework, the FATF conducts a peer review by visiting each country for the purpose of a mutual evaluation. While the review is to take place every ten years, on account of the COVID pandemic, the next peer review is in 2023, he added.
Further delving into the importance of the peer review process, Mehta highlighted that based on the ranking, every country gets a grading that can, in turn, affect a country’s global economic grading, its credit rating, and its capacity to seek financial help. He, thereby, explained that the amendment was brought in since 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 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 asked Mehta. Justice Gavai noted that the country went on despite the assassination of a sitting Prime Minister in the past.
Further, Justice Nath asked Mehta what stopped the government from approaching the court and filing a simple application instead of the amendment.
Proceeding to emphasise the need for Mishra to continue as director of ED, Mehta submitted that the FATF speaks to the highest professional standard for the entire organisation and the leader would represent how the organisation functions. He urged that it is not that one person is indispensable, but that continuity is necessary, which was the intention of the legislators for introducing the amendment.
On Justice Gavai’s enquiry about the current stage of the peer review process, Mehta offered to check on it. Additionally, Mehta highlighted that it involves a long process of scrutiny, including interactions, building rapport, and developing relationships. Continuing oversight of Mishra as a senior official is “critical for the financial future of the country”, he submitted.
The matter is posted for further hearing on Monday, May 8.
