The Madras High Court has reprimanded the Enforcement Directorate for overstepping bounds while investigating illegal sand mining in Tamil Nadu and neighbouring Andhra Pradesh.
A bench of Justice MS Ramesh and Justice Sunder Mohan pointed out the federal agency could not claim jurisdiction since mining, illegal or otherwise, is not listed as a scheduled offence under the Prevention of Money Laundering Act. The High Court therefore stayed proceedings against the accused sand mining contractors and directed the ED to release seized properties.
"We are of the opinion that unless information with regard to any case (as a scheduled offence) is registered, and such an offence has generated proceeds of crime, which is dealt with by petitioners, no action can be initiated," the court said.
The order had been passed Tuesday. The court's full judgement was released today.
This is not the first time the ED has been ticked off in connection with this case.
READ | "Completely Illegal": ED Summons To 5 Tamil Nadu Officers Paused
In November last year the High Court stayed - for three weeks - the agency's summons to five District Collectors. The court observed the ED had limited powers but did not pause the probe.
The agency had summoned the DCs of Ariyalur, Vellore, Thanjavur, Karur, and Tiruchirapalli.
Tamil Nadu's ruling Dravida Munnetra Kazhagam had sought to invalidate the summons, arguing the ED did not have unbridled powers and that its summons went against the spirit of federalism.
Claiming it had already filed police cases, and that it was willing to provide details, the state argued the ED ought to seek details only through it and that any investigation ought to be with its consent.
The Supreme Court, though, has been less inclined to interfere.
In February the ED moved the top court to challenge the stay on summons to the five DC. During the hearing, Justice Bela M Trivedi asked, "Why is the state troubled... what is its stake in the matter?"
The Supreme Court subsequently directed the five officials to appear before the ED.
READ | Supreme Court Setback For Tamil Nadu In Illegal Sand Mining Probe
Justice Trivedi and Justice Pankaj Mithal called the state's plea "strange and misconceived".
The alleged sand mining racket - which the ED claims is worth Rs 4,000 crore or more, according to data provided by an expert from the Indian Institute of Technology in Madras - has been controversial for several years now, including when the All India Anna Dravida Munnetra Kazhagam was in power.
The AIADMK is now the main opposition party in the state.
Tax officials had said the miners' illegal profit was routed into investments in other businesses, such as spinning and sugar mills, and hotels. Certain overseas transactions were also being scrutinised.
It has become a major political flashpoint in the southern state, and was leveraged by the Bharatiya Janata Party in February as it sought to make an impact during the Lok Sabha election. The BJP's state boss, K Annamalai, warned, "ED will not leave who are involved in illegal sand mining."
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