CBI/ED Tenure Extension Day #4: SC Reserves JudgementChallenge to Tenure Extension of CBI and ED Directors
Solicitor General Tushar Mehta concluded his arguments today. Broadly, he stated that to satisfy the Financial Action Task Force’s (FATF) stringent review and assessment process, the continued presence of a director with in depth knowledge of the Enforcement Directorate (ED) was crucial. Thus, Mr. S.K. Mishra’s tenure extension was required. Further, he took the Court through various judgements to show that the Union was compliant with Common Cause in amending the Delhi Special Police Establishment Act, 1946 (DSPE Act) and the Central Vigilance Commission Act, 2003 (CVC Act).
Sr. Adv. Gopal Shankarnarayanan then submitted his rejoinder. He argued that an independent director was crucial to satisfying FATF guidelines. Further he argued that the cases referred to by the Solicitor General were starkly different in context to this case, and thus did not apply.
Mr. Sanjay Kumar Mishra, the director of the ED was meant to retire on November 17th, 2021. However, three days before his retirement, on November 14th, 2021, the President of India issued the Delhi Special Police Establishment (Amendment) Ordinance, 2021, and the Central Vigilance Commission (Amendment) Ordinance, 2021. These Ordinances permit the extension of the tenures of the directors of the Central Bureau of Investigation (CBI) and the Enforcement Directorate (ED). They amended the Delhi Special Police Establishment Act, 1946 (DSPE Act) and the Central Vigilance Commission Act, 2003 (CVC Act). The Ordinances allow up to 3 one-year extensions of the CBI and ED director’s tenure.
Previously, in Common Cause v Union of India (2021) the Supreme Court heard a challenge to the extension of Mr. Mishra’s tenure as ED director for an additional year after his initial two-year tenure expired. The SC held that extensions could be granted in ‘rare and exceptional cases’ for a short period of time. However, they made it clear that no further extension was to be granted to Mr. Mishra.
On November 18th, 2021, Mahua Moitra, a Member of Parliament from the All India Trinamool Congress (TMC), and Congress Leader Randeep Singh Surjewala filed petitions at the SC challenging the Ordinances. They argued that the Ordinances overrode and were contrary to the Court’s decision in Common Cause and allowed the Union to further extend Mr. Mishra’s tenure.
On December 14th, 2021, Parliament enacted the Central Vigilance Commission (Amendment) Act, 2021, and the Delhi Special Police Establishment (Amendment) Act, 2021. These Amendments confirmed the provisions for tenure extension that were first passed through the Ordinances.
On July 13th, 2022, Congress leader Jaya Thakur, who was among those who challenged the Ordinances, asked the Court to list the challenges to the Amendments, which the SC agreed to. On August 2nd, 2022, a 3-Judge Bench comprising Chief Justice N.V. Ramana, and Justices Krishna Murari and Hima Kohli issued notice to the Union government to respond to the challenges.
On March 23rd, 2023, a 3-Judge Bench led by Justice B.R. Gavai started hearing the case.
- Whether the FATF Review Justifies Tenure Extensions
- Whether the CVC and DPSE Amendments were Compliant with Common Cause
On Whether the Ongoing FATF Review Justifies Tenure Extensions
Mr. Mehta stated that India is currently being assessed in the 4th rounds of mutual evaluation by the FATF. He then plotted the tentative timeline for the assessment. The technical compliant submission was due on May 5th 2023, Effectiveness Annex Submission was due on July 14th 2023, the Onsight Period is expected to end in November 2023, and the plenary discussion is expected to held in June 2024.
Mr. Mehta argued that Mr. Mishra’s tenure would end in November, when the most crucial part of the assessment process would complete. After that, having completed his tenure to the maximum duration of 5 years, he tenure would end. Justice Gavai raised the same point the Bench has put forth in the previous hearings—Is there no person competent in the ED to handle the assessment, and if so, what would happen to the ED after Mr. Mishra’s retirement. The Solicitor General responded that the ED Director was not irreplaceable. However, continuity was crucial for the FATF’s assessment.
In his rejoinder, Sr. Adv. Shankarnarayanan stated that the FATF guidelines accommodate each country’s unique position and their laws. The FATF will not be concerned by changing leaders of the ED. However, if they see that the Union government has a large bearing on the independence of this investigating body, they may see it as a violation of their guidelines. He referred to the Interpretive Note to Recommendation 29 of the Guidelines where the FATF emphasises operational independence. It states that the Financial Intelligence Units must be ‘free from any undue political, government or industry influence’. The ED’s independence is lost if the Union is allowed to dangle the incentive of tenure extension for Union-friendly behaviour.
On Whether the CVC and DPSE Amendments were Compliant with Common Cause
Previously, the petitioners had argued that in the 2021 Common Cause Judgement, the SC had that no further extension was to be granted to Mr. Mishra. Yet, Mr. Mishra’s tenure was extended after passing the DSPE and CVC Ordinances, in direct contravention of the Judgment.
Mr. Tushar Mehta submitted 15 Judgments before the Bench where, he argued, it was clear that the legislature was within its powers to amend the CVC and DSPE Acts. The context in which Common Cause was held was starkly different from the contexts of these amendments. In Common Cause, the SC had held that Mr. Mishra’s tenure extension done retrospectively was valid, and barred any further extension. However, in the present case, the Ordinances and the subsequent amendments created a different and valid premise for these extensions. The amendments removed the basis of the common cause Judgement, as it allows on-year extensions.
Justice Gavai stated that in Common Cause, the case was assessed on facts and not the law. The question was whether that specific director’s tenure could be extended, and done so retrospectively after his retirement. The amendments to the CVC and DSPE effectively contravened the SC’s decision in the case. The amendments would only be valid if they addressed gaps in the law. Had there been a question of lacuna in the law in either the CVC or DSPE, the amendments, intended to resolve that lacuna could be valid.
Mr. Mehta responded that Common Cause was heard under different context. Had the Amendments been present when Common Cause was being heard, that would put both cases in the same context, thus binding the amendments under the Mandamus imposed in the 2021 Judgement.
He referred to Madan Mohan Pathak v Union Of India (1978) and Indian Aluminium Co v State of Kerala (1996) where the Court held a Mandamus issued by Court can be made ineffective by a valid law which removes or rectifies the defect pointed out by the Court.
In his Rejoinder, Mr. Shankarnarayanan argued that the cases referred to by the Solicitor all dealt with instances where a challenged law was struck down. In Common Cause, the SC did not strike down any provision of the CVC or DSPE. Similar to the point made by Justice Gavai, he said in this instance, there was no need for a validating Act to rectify a law that the Court struck down. Further, he pointed out that none of the cases referred to by the Union dealt with tenures, appointments and extensions, or retrospective action on tenure.