ED & CBI - Jurisdication, Powers & Controversies

• The Directorate of Enforcement is a multi-disciplinary organization mandated with investigation of offenses of money laundering and violations of foreign exchange laws.
• It functions under the Department of Revenue of the Ministry of Finance.
• The origin of this Directorate goes back to 1st May, 1956, when an ‘Enforcement Unit’ was formed in the Department of Economic Affairs for handling Exchange Control Laws violations under Foreign Exchange Regulation Act, 1947 (FERA ’47).
• In 1957, this Unit was renamed as ‘Enforcement Directorate’, and another branch was opened at Madras (now Chennai).
• In 1960, the administrative control of the Directorate was transferred from the Department of Economic Affairs to the Department of Revenue.

• The Central Bureau of Investigation (CBI) was established by a resolution of the Ministry of Home Affairs, Government of India, dated April 1, 1963.
• The CBI is not a statutory body but derives its power to investigate from the Delhi Special Police Establishment Act, 1946.
• The CBI functions under the Ministry of Personnel, Public Grievances and Pensions of the central government.
• The CBI came into being during World War II, when the colonial government felt the need to probe cases of corruption in the War and Supply Department. A law came in 1941. It became the DSPE Act in 1946.

• The Central Vigilance Commission (CVC) exercises superintendence over the functioning of the Delhi Special Police Establishment (CBI) insofar as it relates to the investigation of offenses under the Prevention of Corruption Act, 1988; or offenses under the Code of Criminal Procedure, 1973 for certain categories of public servants.
• CVC also gives directions to the Delhi Special Police Establishment (CBI) for superintendence insofar as it relates to the investigation of offenses under the Prevention of Corruption Act, 1988.
• The Commission also reviews the progress of investigations conducted by the Delhi Special Police Establishment (CBI) into offenses alleged to have been committed under the Prevention of Corruption Act, 1988 or an offense under the Code of Criminal Procedure and review the progress of the applications pending with the competent authorities for sanction of prosecution under the Prevention of Corruption Act, 1988.
• The appointment of the officers to the posts of the level of Deputy Director and above (including the Director) in the Directorate of Enforcement is recommended by a committee under the chairpersonship of Central Vigilance Commissioner and with Vigilance Commissioner and other officers of Government of India as members.
• Further, the appointment of officers to the posts of the level of SP and above in the CBI (except Director, CBI) is recommended by a committee under the chairpersonship of Central Vigilance Commissioner and with Vigilance Commissioner and other officers of Government of India as members.

• The ED Director is appointed by the central government on the recommendation of a committee: Chaired by the Central Vigilance Commissioner and Members comprising of Vigilance Commissioners, Home Secretary, Secretary DOPT and Revenue Secretary.

• The Lokpal Act 2013 prescribed that the CBI director shall be appointed on the recommendation of a committee comprising the Prime Minister, Leader of the Opposition in the Lok Sabha and Chief Justice of India or a judge of the Supreme Court nominated by him

• Both FEMA and PMLA apply to the whole of India including Jammu and Kashmir.
• So, the Enforcement Directorate can act against any person to which this act applies.
• Cases under FEMA may lie in civil courts whereas PMLA cases will lie in criminal courts.
• The agency has jurisdiction over a person or any other legal entity who commits a crime whether he is a politician or a businessman.
• All public servants come under the jurisdiction of the agency if they are involved in any offense related to money laundering.

• Section 6 of the DPSE Act authorizes the central government to direct the CBI to probe a case within the jurisdiction of any state on the recommendation of the concerned state government.
• The courts can also order a CBI probe, and even monitor the progress of investigation.
• CBI can suo-moto take up investigation of offenses only in the Union Territories.

The functions of the Directorate include enforcement of following Acts:

• Prevention of Money Laundering Act, 2002 (PMLA): ED has been given the responsibility to enforce the provisions of the PMLA by conducting investigation to trace the assets derived from proceeds of crime.
• Foreign Exchange Management Act, 1999 (FEMA): ED has been given the responsibility to conduct investigation into suspected contraventions of foreign exchange laws and regulations.
• Fugitive Economic Offenders Act, 2018 (FEOA):
• It is a law whereby the Directorate is mandated to attach the properties of the fugitive economic offenders who have escaped from India warranting arrest and provide for the confiscation of their properties to the Central Government.
• Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA): Directorate is empowered to sponsor cases of preventive detention with regard to contraventions of FEMA.

• The CBI derives its power to investigate from the Delhi Special Police Establishment Act, 1946.
• Section 6 of the DPSE Act authorizes the central government to direct the CBI to probe a case within the jurisdiction of any state on the recommendation of the concerned state government.

• The tenure of the ED Director was brought in by amending the Central Vigilance Commission Act, 2003.

• In 2003, DSPE Act was revised on the Supreme Court’s recommendation in the Vineet Narain case.
• A committee that had members from Central Vigilance Commission, Secretaries from Home Ministry, Ministry of Personnel and Public Grievances would send recommendations to Central Government for the appointment of CBI Director.
• In 2014, the Lokpal Act provided a committee for appointment of CBI Director consisting of the Prime Minister,Leader of Opposition and Chief Justice of India.
• Director of CBI has been provided security for two year tenure, by the CVC Act, 2003.

• Sections 48 & 49 of the PMLA empower the ED officers to investigate cases of Money Laundering.

• CBI can investigate matters only with notification by the central government.

• Summon an individual whose attendance is essential, whether to give evidence or to produce any records, during investigation or proceedings.

• Once consent is granted, the CBI can investigate economic, corruption, and special crimes (including national security, drugs and narcotics, etc.)

• Power to Seize/Attach assets.

• CBI can suo-moto take up investigation of offenses only in the Union Territories.

• Power to penalize

• Power to compound contraventions:
• It is a procedure that allows a defendant to pay a monetary penalty rather than face prosecution and lengthy legal battles.
• The ED and the Reserve Bank of India (RBI) have the ability under Sec 15 of FEMA to compound contraventions listed in Sec 13 of the Act.

• ED does not require any consent from states to take any action.

• Federal Bureau of Investigation(FBI): is responsible for detecting and lawfully countering actions of foreign intelligence services and organizations that gather information about the U.S. that adversely affects our national interests

• The National Crime Agency (NCA): It is the UK's lead agency against organized crime; human, weapon and drug trafficking; cybercrime; and economic crime that goes across regional and international borders, but it can be tasked to investigate any crime.

• Directorate of Territorial Security (DST): is responsible for internal security, playing a role similar to that of the American FBI. It is controlled by the Ministry of the Interior.

• Bundeskriminalamt (BKA): The Federal Criminal Police Office of Germany is the federal investigative police agency of Germany, directly subordinated to the Federal Ministry of the Interior.

Wide Powers: The ED has a set of powers that even CBI or state police forces don’t have. These are:

• Statement before ED is admissible in court as evidence.
• All offenses under PMLA are non-bailable.
• The burden of proof is on the accused.

Limited Powers:

• The powers and jurisdiction of members of the CBI for investigation are subject to the consent of the State Govt., thus limiting the extent of investigation by the CBI.
• Grant and withdrawal of general consent on political considerations has been common for states.

Transparency:

• There is a lack of transparency in the way the ED functions as it is not known how the ED chooses its cases and what is the basis of picking a particular case.

Political Interference:

• Due to excessive political interference in its functioning it is often criticized.

Enforcement Case Information Report (ECIR):

• The Enforcement Directorate registers an Enforcement Case Information Report (ECIR) in India, which bears similarities with a First Information Report (FIR) in criminal cases.
• It is considered an internal document and not given to the accused.

Lack of Accountability:

• CBI is exempted from the provisions of the Right to Information Act, thus, lacking public accountability.

Use of PMLA for ordinary crimes:

• At the start of 2024, news broke out about summons being issued under the PMLA to two farmers by the ED.
• ED had summoned two farmers from Tamil Nadu, Kannaiyan (70 years old) and Krishnan (62 years old) for questioning in money laundering case (PMLA) in 2023

What’s the predicate offense?

• Kannaiyan and Krishnan had set up electric fencing around their farm without permission in 2017 and two Indian bisons were electrocuted to death.
• FIR was registered in 2017 under Sec 9 read with Sec 2(16), 2(36) and Sec 51(1) of Wildlife (Protection) Act, 1972.
• Trial court acquitted both Krishnan and Kanniyan on 28.12.2021.
• ED has taken cognisance of this FIR (even after acquittal) and launched money laundering investigation.
• Two years after acquittal, both the farmers were summoned for questioning in 2023.

Low conviction rates:

• Since 2005, the ED has registered 5,906 cases but disposed only 23-25 cases, a mere 0.42% of the total cases.

Political tool:

• It is often alleged that the government is weaponizing the ED against the opposition leaders.
• As per the report published in The Indian Express in 2022, it was found that around 85% of the cases involving politicians were registered against those from the opposition.

• The Supreme Court comprising Justices B.R. Gavai, Sanjay Karol and Vikram Nath on 27 July2023,heard and granted the Union’s request to extend the tenure of the incumbent Enforcement Directorate (ED) Director, Sanjay Kumar Mishra on till September 15, 2023, to serve ‘public and national interest.’
• Earlier the same Bench delivered a Judgment in the challenge to the tenure extensions of CBI/ED Directors and held that the repeated extensions of ED Director tenure were illegal.
• The government had been given time till July 31 to find a replacement for Mr. Mishra, taking into consideration the government’s submission that Mishra’s presence was necessary for the ongoing evaluation by the Financial Action Task Force (FATF).

• Rakesh Asthana's appointment as CBI's special director in 2016 was opposed by non-governmental organization (NGO) Common Cause.
• The NGO claimed that Asthana allegedly accepted favors from Gujarat-based Sterling Biotech and Sandesara Group of companies when he was Surat police commissioner in 2011.

• Every year, the Enforcement Directorate (ED) recruits the positions for Assistant Enforcement Officers through the SSC CGL exam.

• One can apply for CBI after completing graduation from a recognised university in any discipline.
• To become a CBI officer, individuals have to go through recruitment processes such as the
• Departmental Competitive Examination
• SSC CGL Exam(Sub inspector)
• UPSC Civil Services Exam(through deputation)

• Group A Officers of the Enforcement Directorate are appointed through deputation from other services.

• The Central Bureau of Investigation are having vacancies in the rank of SP to be filled by IPS officers as per IPS Tenure Policy on deputation basis.

• The Directorate of Enforcement, with its headquarters at New Delhi, is headed by the director of enforcement.
• Rahul Navin, a 1993-batch IRS officer, has taken charge as the acting director of the ED replacing Sanjay Kumar Mishra, an IRS officer of the 1984 batch.
• There are five regional offices at Mumbai, Chennai, Chandigarh, Kolkata, and Delhi headed by special directors of enforcement.
• Zonal offices of the directorate are at Pune, Bengaluru, Chandigarh, Chennai, Kochi, Delhi, Panaji, Guwahati, Hyderabad, Jaipur, Jalandhar, Kolkata, Lucknow, Mumbai, Patna, and Srinagar.
• These are headed by a joint director.
• The directorate has sub-zonal offices at Mangaluru, Bhubaneshwar, Kozhikode, Indore, Madurai, Nagpur, Allahabad, Raipur, Dehradun, Ranchi, Surat, Shimla, Visakhapatnam and Jammu which are headed by a deputy director.

• The Central Bureau of Investigation is headed by a Director, an IPS officer with a rank of Director General of Police.
• The current director of CBI is Praveen Sood, who was the former DG and IGP of Karnataka state police.
• The director is selected by a high-profile committee constituted under The Delhi Special Police Establishment (DSPE) Act, 1946 as amended through The Lokpal and Lokayuktas Act, 2013, and has a two-year term which can be extended for another three years.
• Other ranks in the CBI which may be staffed by the IRS (Indian Revenue Service) officer and the IPS are Special Director, Additional Director, Joint Director, Deputy Inspector General of Police, Senior Superintendent of Police, Superintendent of Police, Additional Superintendent of Police, Deputy Superintendent of Police. Inspector, SubInspector, Assistant SubInspector, Head constable, Constable which are recruited through SSC or through deputation from Police, Income Tax Department and Customs Department.

• The actual strength of ED is currently around 1,700, which includes all ranks at the top as well as assistant directors, enforcement officers, clerks, sepoys, multi-tasking staff, and stenographers.

• The CBI has around 5,000 staff members, 125 forensic scientists, and 250 law officers.