Relevance: GS Paper II (Statutory Bodies, Federalism, Governance) | GS Paper IV (Ethics in Public Administration)

Source: The Hindu / Indian Express

Context

The Directorate of Enforcement (ED) is under intense scrutiny for alleged “institutional overreach” and the “weaponization” of the Prevention of Money Laundering Act (PMLA). The agency is accused of bypassing legal due process and using “media trials” (selective leaks) to shape public perception, often damaging reputations before guilt is proven.

Basics for UPSC (Static Concepts)

To understand the controversy, one must understand the machinery:

1. What is the ED? A specialized financial investigation agency under the Department of Revenue (Ministry of Finance). It enforces two key laws:
   • FEMA, 1999 (Civil Law – Foreign Exchange).
   • PMLA, 2002 (Criminal Law – Money Laundering).
2. What is PMLA? A stringent law enacted to combat terror financing and drug money.
   • Predicate Offence: The ED cannot start a case on its own. There must be a primary crime (like corruption, theft, or cheating) registered by the Police/CBI first. This is called a Scheduled Offence.
   • ECIR: The ED registers an Enforcement Case Information Report, which is equivalent to a Police FIR.

Key Issues & Institutional Challenges

1. The “Wayward” Agency (Procedural Violations)

• Ignoring the Rule: The ED is accused of raiding premises without a registered ECIR or a valid predicate offence.
  • Case Study: The Madras High Court (in Akash Bhaskaran case) stayed ED proceedings, ruling that the agency has “no authority” to act on mere suspicion without a primary crime.
• Draconian Powers: PMLA provisions are exceptionally tough:
  • Section 50: Statements given to ED officers are admissible in court, effectively bypassing the protection against self-incrimination (Article 20(3)).
  • Section 45 (Bail): Reverses the “burden of proof.” The accused must prove they are innocent to get bail, often leading to indefinite jail time without trial.

2. The “Media Trial” Phenomenon

• Leak Culture: The article highlights a “symbiotic” relationship where the ED selectively leaks unverified details (e.g., “incriminating diaries”) to friendly media.
• Impact: This violates the Right to Dignity (Article 21). Even if the court later acquits the person, the social stigma caused by 24×7 media coverage remains.

3. Federal Friction

• Centre vs. State: The ED’s frequent raids in opposition-ruled states (e.g., West Bengal, Tamil Nadu) are seen as an infringement on Federal Principles, as “Law and Order” is a State subject.

UPSC Value Box

Governance Insight:

• Rule by Law: When laws designed for terrorists are applied to political opponents, the state shifts from being a “Protector” to a “Police State.”
• Institutional Decay: If the Media (Fourth Pillar) acts as a “stenographer” for the Executive instead of a watchdog, democratic accountability collapses.

Way Forward:

• Judicial Oversight: The Supreme Court must strictly enforce the “Predicate Offence” rule to prevent the ED from becoming a “Super Police.”
• Code of Conduct: A statutory code is needed to regulate media briefings by investigative agencies to prevent “Trial by Media.”

Summary

The ED is vital for financial security, but its current functioning raises concerns about the Rule of Law. Procedural violations (ignoring predicate offences) and “media trials” (leaks) threaten individual liberty. The judiciary must step in to ensure the agency remains a professional investigator, not a political tool.

One Line Wrap: The fight against corruption must not compromise Due Process; justice must be blind, not biased.

Q. “The weaponization of the Prevention of Money Laundering Act (PMLA), coupled with ‘media trials’, poses a grave threat to the Rule of Law.” Critically analyze the functioning of the Directorate of Enforcement in this context. (10 Marks, 150 Words)