These are instances where the Enforcement Directorate (ED) got relief from courts as a temporary victory, but it may leave deep scars on the federal structure of the country. Like every curious onlooker, I have been closely following up the events relating to centre-state conflict arising due to ED’s raid on I-PAC office at the time when elections are not far, and the West Bengal Chief Minister’s initiative to prevent ED’s search by seizing documents from the ED officials in the presence of West Bengal police. It is not possible to say with certainty whether the raid was deliberately timed close to elections, or it was just a coincidence. Assuming that it was a deliberate move, still it does not justify the Chief Minister’s action. It was not appropriate to take law in her hands. There are remedies in law against illegal search. With appropriate legal advice, it was possible to prevent the perceived misuse of seized documents, including electronic devices, as professed by the Chief Minister. But the chances are that impact of the whole incident may have negative impact on the country’s federal system. Central and state governance are equally important at their respective places. Dominance by one on the other disturbs the fine balance between centre-state relations. This is what has to be kept in view as a long-term policy.

It also needs to be seen why ED is frequently coming into controversies. As a lawyer who has dealt with money laundering cases, I can say that money-laundering law needs to be moderated either by statutory amendments or through judicial interpretation. The primary object of money-laundering legislation at international level is to curb terrorist and drugs related menace. However, in India, the law is being invoked for several other offences. Application of law at micro-level has given rise to tension between central and state Governments. The law permits several assumptions and presumptions in favour of ED which the ED is using copiously. The money-laundering law declares that search and seizure is an exercise of civil nature but practically the search and seizure is so intrusive that most of the time people get outraged by it.

The ED’s effort in general is to get hold of electronic devices, including mobile phones because these devices mostly contain information which can give good leads to the ED. In USA, warrantless search of mobile phone is not permissible. But in India, an Assistant Director, whose rank is not more than Section Officer in a Ministry of the Central Government, can seize the mobile phone. That is quite odd.

So is the case with storage devices like hard disk. ED has power to remove and seize the storage device from computer lying in searched premises, and they are doing it frequently. This brings the searched person’s activities or his business to standstill. Theoretically it is permissible to demand copies of seized documents from ED, but it needs to be seen whether searched person really gets them easily and promptly. My experience is otherwise.

From the perspective of USA law, ED’s powers suffer from overbreadth. From Indian perspective, they lack reasonableness and proportionality. These safeguards need to be built into the money-laundering law if our Government wants to avoid controversies which the ED is frequently facing.

The moment FIR is registered the ED gets jurisdiction to probe money-laundering angle. It is not necessary for the ED to wait till police investigation matures into a stage where credible material becomes available, to take the money-laundering probe forward. Conventionally, whatever amount is mentioned in the FIR, howsoever inflated it may be, is presumed by ED as the proceeds of crime, for the purpose of  its money-laundering probe.

The law builds some safeguards like post-search confirmation by Adjudicating Authority and then appeal to the Appellate Tribunal but there are very less cases in which these two bodies invalidated actions of ED. However, there are cases where the High Courts have interfered.