Explained: The Supreme Court Order On 'Illegal' Extension To ED Director SK Mishra And The Hailing Of Order By Both Opposition And Centre

The Supreme Court on Tuesday held that the third extension to the tenure of Enforcement Directorate (ED) chief Sanjay Kumar Mishra is "illegal".

However, the SC upheld the amendment to the Central Vigilance Commission (Amendment) Act, 2021, Delhi Special Police Establishment (Amendment) Act, 2021, and the Fundamental (Amendment) Rules, 2021. These amendments allow the Centre to have chiefs of ED and Central Bureau of Investigation (CBI) with a tenure of up to five years.

While the Opposition hailed the SC's rejection of extension to Mishra's tenure, the Centre hailed the the SC's approval to the amendments stated above. Union Home Minister Amit Shah said the powers of ED remain the same and institution goes beyond any one person. 

As per the SC order, Mishra will continue to serve as ED chief till July 31. The PTI reported that he has been allowed to serve till the end of the month "in view of FATF peer review and to enable smooth transition". The Financial Action Task Force (FATF) is global anti-terror financing watchdog.

What does the Supreme Court order say?

The Supreme Court on Tuesday held the two notifications by the Centre giving extensions to Indian Revenue Service (IRS) officer SK Mishra as ED chief "illegal".

However, in the same order, the SC upheld upheld the amendment to the Central Vigilance Commission (Amendment) Act, 2021, Delhi Special Police Establishment (Amendment) Act, 2021, and the Fundamental (Amendment) Rules, 2021. These amendments allow the Centre to have chiefs of ED and Central Bureau of Investigation (CBI) with a tenure of up to five years.

The SC bench of Justices BR Gavai, Vikram Nath, and Sanjay Karol said in view of the peer review being conducted by the Financial Action Task Force (FATF) this year, and to enable smooth transition, Mishra's tenure will be till July 31, reported PTI. The FATF is a global anti-terror financing watchdog. 

The Apex Court, however, noted that the Judiciary's scope of reviewing legislature is limited and there are only three grounds for such a review, and those three grounds were not applicable in the matter. Hence, the amendments to the acts stated above were upheld.

The PTI reported, "The bench said the scope of judicial review in a legislative action is very limited and it can be interfered with only on three grounds -- as to whether legislature was competent enough to legislate on the subject, whether it affects any fundamental right, and manifest arbitrariness." 

"We have found that the legislature is competent to legislate on the subject, and secondly there is no violation of any fundamental rights, and thirdly there is no manifest arbitrariness," said the SC in its order, as per PTI.

What's the case about?

The SC order came on a clutch of petitions against the third one-year extension of tenure granted by Mishra by the Centre last year. 

In November 2022, the Centre had given a one-year extension to Mishra a day before he was set to retire. It was his third extension as ED Director. Initially, he was appointed as the ED chief in 2018 with a fixed tenure of two years. Then, starting in 2020, he was given three one-year extensions. 

After Mishra was given the third extension, a clutch of petitions were filed against the Centre's decision that were taken up by the Supreme Court. The SC had earlier asked the Centre why one person was so indispensable. 

“Is there no other person in the organisation who can do his job? Can one person be so indispensable?" the court had asked the Centre. “According to you, there is no one else in ED who is competent? What will happen to the agency post 2023, when he does retire?” 

The Centre had said that the extension was required because of upcomong review from the anti-terror financing agency FATF.

“It was not love for one particular individual but the Prevention of Money Laundering Act (PMLA) has trans-border implications. India is due for peer review by FATF which happens once in 10 years. A person interacting with FATF is best suited to deal with them. Sometimes, continuity is needed when you are dealing with world bodies. What is paramount was the performance of our country (in the review). It is not our case that he (Mishra) is indispensable,” said the Centre in the Supreme Court earlier, according to Hindustan Times.

In 2021, the Apex Court had upheld the Centre's extension to Mishra, but had said that “extension of tenure…to officers who have attained the age of superannuation should be done only in rare and exceptional cases” and that such extensions “should be for a short period”, according to The Indian Express.

Why have both the Congress and Centre hailed the SC order?

The Opposition Congress and the Centre have hailed the Supreme Court's order for difference reasons.

The Congress hailed the order as a vindication of its stand. The Centre, on the other hand, hailed the SC upholding the amendments to the three laws and said that the power of the ED remains the same to punish the corrupt. 

The Congress also demanded an independent inquiry into all actions taken up by Mishra as ED chief during his extended tenure.

"This is a victory of justice and vindication of our stand on brazen misuse and compromise of ED for political vendetta as also the blatant pursuit of Modi Government’s desperate and obvious agenda," said Congress General Secretary Randeep Surjewala, who had filed one of the petitions in the matter in the Supreme Court, on Twitter.

He further said, "This is a serious and historic indictment of the Modi Government, which was so desperate to have its choice of ED Chief (for reasons apparent to all) that it completely disregarded all norms of justice, equity and fairness to install its ‘yes man’."

Surjewala claimed that "in view of the said observation of the SC, all actions taken by ED after 17.11.2021 automatically become illegal, null and void."

"Thus, we demand that an independent investigation (independent of influence and pressure of Modi Government) be constituted to scrutinse all actions by ED post 17.11.2021," said Surjewala. 

Meanwhile, Union Home Minister Amit Shah said that "the powers of the ED to strike at those who are corrupt and on the wrong side of the law remain the same" and the ED is not about one person but an institutions. 

"Those rejoicing over the Hon'ble Supreme Court decision on the ED case are delusional for various reasons. The amendments to the CVC Act, which were duly passed by the Parliament, have been upheld.The powers of the ED to strike at those who are corrupt and on the wrong side of the law remain the same. ED is an institution that rises beyond any one individual and is focused on achieving its core objective to investigate offences of money laundering and violations of foreign exchange laws. Thus, who the ED director is - that is not important because whoever assumes this role will take note of the rampant corruption of a cozy club of entitled dynasts who have an anti-development mindset," said Shah, as per ANI.