On November 28, 2023, the Madras High Court temporarily halted the Enforcement Directorate’s (ED) summoning of five Collectors in Tamil Nadu as part of the ongoing investigation into illegal sand mining. While the court allowed the investigation to proceed, it stayed the specific summons issued.
In September 2023, the ED conducted raids at 34 locations, including sand quarries, contractors’ offices, and residences. The two-day operation resulted in the seizure of unaccounted property documents, ₹12.82 crores in cash, and 124 grams of gold jewellery.
The Hindu reported that the Madras High Court, on Monday, November 27, 2023, announced its intent to deliver orders the following day regarding the Tamil Nadu Government’s plea. The government sought not only to stop the ED’s summoning of the District Collectors but also to suspend the entire investigation into alleged money laundering linked to widespread illegal sand mining in the state. Justices S.S. Sundar and Sunder Mohan, constituting the Division Bench, heard arguments from senior counsel Dushyant Dave for the State government and Additional Solicitor General AR.L. Sundaresan representing the ED. The court decided to address the State’s plea for interim relief before delving into the main cases. The State government and the five Collectors collectively filed ten writ petitions, five challenging the ED’s summons and the other five questioning the ED’s authority to investigate without the State government’s consent, citing concerns about federalism—a fundamental aspect of the Constitution.
During the hearing on November 27, 2023, when the judges sought clarification on the basis for the ED registering an Enforcement Case Information Report (ECIR) on September 11, 2023, the Additional Solicitor General (ASG) explained that it was rooted in four FIRs filed by the State police concerning illegal mining.
Formally requesting details of all FIRs related to illegal sand mining in the last five years from the Director General of Police on October 17, 2023, the ED encountered delays as, according to the ASG, the DGP has not yet provided these details, leaving the ED’s request pending. The ASG, along with ED’s Special Public Prosecutor N. Ramesh, made these assertions during the hearing.
As reported in The Commune, as part of the investigation, the ED summoned 10 District Collectors, Water Resources Department Principal Chief Engineer Muthiah, and others. In response, Muthiah appeared at the Nungambakkam office of the ED in Chennai to provide his statements.
Conversely, IAS officers who received summons submitted a plea in the Madras High Court requesting the cancellation of the summons. During the hearing, the TN government’s counsel argued that the ED could not take action unless the state government was informed about the illegal sand mining crime. The government’s counsel also contended that the ED’s approach varied in each state and that the ED lacked the authority to issue summons to IAS officers but could instead request their cooperation in the investigation.
The ED argued that Minister Durai Murugan’s assistant, Umapathi, pressured an officer not to appear for an investigation requested by the ED. They further stated that, during the investigation, officials admitted to significant illegal sand mining activities. The ED revealed that officials confessed that no action was taken against wrongdoers despite the substantial impact on the Water Resources Department. The ED also submitted these statements from Water Resources Department officials in court. Additionally, the ED emphasised that officials claimed they had no choice but to comply with the oral orders of their superiors and admitted to making mistakes by allowing illegal sand mining activities to occur.
Justice Sundar emphasised that, in accordance with the Prevention of Money Laundering Act (PMLA) of 2002, the ED must establish the existence of a predicate offence and identify the proceeds of crime to initiate an investigation. In response, Mr. Sundresan argued that, according to the ED, the proceeds of the crime exceeded ₹4,500 crore.
He further clarified that the ED had engaged a team of professors from the Indian Institute of Technology (IIT)-Kanpur to assess the volume of sand extracted from 28 mining sites in Tamil Nadu. The team’s findings revealed that approximately 24 lakh units of the mineral had been unlawfully mined in the last one to two years, resulting in a substantial financial loss to the exchequer.
Justice Sundar expressed skepticism about whether the results of such a survey could serve as a basis for initiating action under the Prevention of Money Laundering Act, questioning the appropriateness of the law in addressing the alleged corruption exposed by the survey.
Justice Mohan stated, “Your objective may be laudable, but your powers are limited. You can’t say I did a survey and therefore I want to investigate. You need the proceeds of the crime.” Mr Dave requested a one-week extension to submit a rejoinder to the ED’s counter affidavit and sought interim protection until the main writ petitions were disposed of. He strongly objected to the ED’s accusation that the State government was attempting to shield offenders by filing the current writ petitions. He argued that the central investigating agency lacked the authority to summon the Collectors of Ariyalur, Karur, Vellore, Thanjavur, and Tiruchi and demand information about sand quarries in their respective districts. “This amounts to a roving and fishing inquiry by the ED. These writ petitions require a detailed hearing since they touch upon the federal structure. Till then, the State must be protected. Heavens will not fall down if an interim relief is granted,” he said when the ASG vehemently opposed a stay on the investigation.
The hearing on the main writ petitions was adjourned by three weeks.
