SC gives ED an earful, says it can't act like a 'crook', tells it to work within ambit of law

The Supreme Court of India, in an observation made in a case on August 8, came down heavily on the Enforcement Directorate and raised significant concerns over its modus operandi, emphasising the need for the agency to operate strictly within legal boundaries.

The observation came amid ongoing discussions about the ED's low conviction rates in cases it investigates. The top court noted that out of approximately 5,000 cases registered in the last five years, less than 10% have resulted in convictions, raising questions about the agency's effectiveness and credibility.

It may be noted here that a bench comprising Justices Surya Kant, Ujjal Bhuyan, and N Kotiswar Singh is currently reviewing petitions that challenge a 2022 verdict which affirmed the ED's arrest powers under the Prevention of Money Laundering Act (PMLA).


The ongoing case provided a critical examination of the ED's operational standards and its impact on individuals' rights within the legal framework of India.

During the proceedings, Additional Solicitor General S V Raju, representing the government and the ED, attributed the low conviction rates to the tactics employed by influential accused individuals who often prolong legal proceedings.

Justice Bhuyan highlighted the troubling statistics regarding the ED's performance, referencing a parliamentary statement that supported the low conviction claims. He said, "You can't act like a crook; you have to act within the four corners of the law."

The judge expressed concern for the ED's image, questioning the ramifications of prolonged judicial custody for individuals who are ultimately acquitted.

Justice Kant suggested the establishment of dedicated courts for the PMLA, similar to those used for TADA and POTA, to expedite the trial process. He asserted that a day-to-day trial format would deter influential accused from filing excessive applications, thereby streamlining the judicial process.

Furthermore, Raju pointed out the challenges the ED faces when influential accused flee the country, particularly to jurisdictions like the Cayman Islands, where they can evade legal accountability. He also noted the emergence of cryptocurrencies as a complicating factor in financial investigations, with Justice Kant urging the government to consider regulatory measures for these digital currencies.

The Supreme Court’s inquiry also touched upon the ED's methodology during arrests, questioning whether the grounds and reasons for such actions were being adequately communicated to the accused.

While Raju maintained that there was no statutory requirement for the ED to provide a copy of the Enforcement Case Information Report (ECIR) at the time of arrest, he acknowledged that subsequent court rulings have stressed the importance of informing the accused of the reasons behind their arrest.

The hearings will continue next week as the Supreme Court deliberates on the complexities surrounding the ED's functions and the broader implications for justice in financial crimes.