Illegal sand mining case: SC stays the Madras HC’s order and says “persons to whom summonses have been issued are obliged to respect and respond to said summonses”

On 27 February 2024, the Supreme Court (SC) of India stayed the order of the Madras High Court holding the summons issued by the Enforcement Directorate (ED) against the five Tamil Nadu district collectors in connection with a probe into an alleged illegal sand mining case. The bench said, “The writ petition is thoroughly misconceived. Accordingly, the execution of the impugned order is stayed and thus district collector shall appear before the ED on the next date as indicated by the ED.” The matter was heard by a two-judge bench comprising Justice Bela M Trivedi and Justice Pankaj Mithal. While lifting the stay imposed by the HC, the SC bench said, “Since the Enforcement Directorate is conducting inquiry/investigation under PMLA (Prevention of Money Laundering Act) in connection with four FIRs, this could be an investigation or proceedings under the act and hence, the district collectors and persons to whom summonses have been issued are obliged to respect and respond to said summonses…”

The Supreme Court was hearing a special leave petition (SLP) filed by the ED against a November 28 order of the HC that stayed the operation of these summonses issued by the ED. In this context, the bench directed the district collectors to respond to the summonses issued by the ED on the next indicated date. During the proceedings, Senior Advocate Kapil Sibal representing the Tamil Nadu Government, contended, “Question of law is what jurisdiction does ED have to issue summons without there being any FIR, any crime being set out, without any proceeds of crime…An investigation or inquiry by the ED has to be in relation to a scheduled offence under the Act but illegal sand mining is not a scheduled offence. How can ED ask for any information relating to any matter which it thinks is has something to do with.” In response to this, Additional Solicitor General (ASG) SV Raju who appeared for the agency stated that “We are against a wall. We need to see where the money is traveling. If we reveal the probe at this point, they will cover their tracks…the state is supposed to be fair. Why should the state oppose this.”

After hearing the matter, the SC said “The impugned summonses have been issued by ED in exercise of the powers conferred upon it under Section 50 of PMLA. from a bare reading of the Act, it clearly transpires that the concerned authority has the power to summon any person if it considers their attendance necessary during the course of investigation or proceedings under the Act…district collectors and persons to whom summonses have been issued are obliged to respect and respond to said summonses.”