The many times the courts doubted the PMLA is misused by the ED

The Supreme Court's Thursday, 22 May, rebuke to the Enforcement Directorate for "crossing all limits" only adds to a long tally of critical observations by the courts on the "misuse" of the agency's powers.

A bench headed by Chief Justice B.R. Gavai yesterday made the critical remark while staying the money-laundering probe against Tamil Nadu’s state-run liquor retailer TASMAC, in a case of illegal grant of wine shop licences.

“Your ED is crossing all limits,” the CJI said on Thursday.

Tamil Nadu and the Tamil Nadu State Marketing Corporation (TASMAC) moved the top court against the ED’s raids on the state-run liquor retailer.

The CJI went on, “The Enforcement Directorate is violating the federal concept (of governance)."

On 11 April too, a different bench headed by Justice A.S. Oka didn't mince words as it chided the federal agency, which sought the transfer of the Nagrik Apurti Nigam (NAN) scam case from Chhattisgarh to New Delhi.

The ED should also think of the fundamental rights of the accused as well, the bench said.

While hearing two bail pleas in the alleged Rs 2,000 crore liquor scam in Chhattisgarh, Justice Oka's bench observed, “You (ED) are virtually penalising [the] person by keeping him in custody."

"Investigation will go at its own speed. It will go on till eternity. Three charge sheets have been filed. You are virtually penalising the person by keeping him in custody. You have made the process a punishment. This is not some case of [a] terrorist or [a] triple murder," it said.

In February 2025 too, the top court had for suppressing vital information and using the PMLA to keep a former excise officer incarcerated. It asked if the provision was "being misused" like the dowry law.

On another occasion, the top court called out the ED's "high-handedness" and "inhuman conduct" in a 15-hour interrogation of a former Haryana Congress MLA, which it noted had gone on past midnight.

Hearing a bail application by a woman in another case of money laundering, the apex court had also said that the ED made arguments "contrary to the provisions of [the] PMLA" to oppose her plea.

"We will not tolerate conduct on the part of the Union of India to make submissions contrary to statute," it said.

A former IAS officer was summoned and arrested by the agency. The top court questioned the "tearing hurry" the ED had shown to carry out this action: "This does not happen in the case of terrorism or serious offences in the IPC."

It underscored the low rate of conviction in money-laundering cases and asked the ED to focus on quality of prosecution and evidence.

Referring to a statement made in Parliament, a three-judge bench of justices Surya Kant, Dipankar Datta and Ujjal Bhuyan had said the ED should do some scientific investigation to increase the conviction rate.

There are also instances of the high courts censuring the agency for its investigation methods.

On one occasion, the Bombay High Court told the ED the right to sleep was a basic human requirement and couldn't be violated for recording statements overnight.

In a separate case, the Bombay High Court cautioned the ED against harassing citizens and taking the law into its own hands.

In November 2024, the Punjab and Haryana High Court called the agency's probe "slipshod and unprofessional" and asked the ED director to explain the lapses.

Trial courts too have expressed displeasure over the ED's probes at times.

The ED overreached its powers by recording statements of doctors at private hospitals under Section 50 of the Prevention of Money Laundering Act, 2002, without any evidence of their involvement in money laundering activities, a trial court said in one case.

On 12 February 2025, a SC bench of Justices Abhay S Oka and Ujjal Bhuyan was hearing the bail plea of Arun Pati Tripathi, a former excise officer from Chhattisgarh. The bench granted him bail, wondering how he was in custody despite the high court concerned quashing the order on cognisance of the complaint.

"The concept of PMLA (Prevention of Money Laundering Act) . If the tendency is to keep the person in jail, even after cognisance is quashed, what can be said? See what happened in 498A cases; [is the] PMLA also being misused like that?" it asked.

Section 498A of the Indian Penal Code protects married women from cruelty by their husbands and their relatives.

When the ED counsel opposed the bail plea and said crooks could not get away on technical grounds, the bench said, "It is shocking that the ED knows the cognisance was quashed, yet this was suppressed. We should summon the officers. The ED must come clean."

"What kind of signals are we giving? Order taking cognisance is quashed and the person is in custody!" the court said.

Tripathi, a former Indian Telecom Services officer, had challenged a Chhattisgarh High Court order denying him bail in connection with a high-profile liquor scam in the state.