Hemant Soren, the leader of Jharkhand Mukti Morcha (JMM), resigned as the Chief Minister of Jharkhand on Wednesday just moments before the Enforcement Directorate (ED) arrested him on charges of money laundering. He is accused of benefiting from tribal land transactions based on forged documents. The judiciary will examine these allegations, raising the question of what justifies the arrest of an accused person, a matter that the judiciary needs to address with clearer and enforceable terms.
- Government Policies and Interventions
- Issues and Challenges Pertaining to the Federal Structure
GS-3 Money Laundering
With reference to the recent political turmoil in Jharkhand, discuss the extent of autonomy exercised by the independent agencies like Enforcement Directorate in India.
Enforcement Directorate (ED):
- The Enforcement Directorate (ED) is a diverse organization tasked with investigating money laundering offenses and violations of foreign exchange laws.
- It operates under the Department of Revenue within the Ministry of Finance. As a prominent financial investigation agency of the Indian government, the Enforcement Directorate strictly adheres to the Constitution and laws of India.
- The ED’s roots can be traced back to May 1, 1956, when an ‘Enforcement Unit’ was established in the Department of Economic Affairs to handle violations of Exchange Control Laws under the Foreign Exchange Regulation Act (FERA) of 1947.
- Initially headquartered in Delhi and led by a Legal Service Officer as the Director of Enforcement, it had branches in Bombay and Calcutta. In 1957, the unit was renamed the ‘Enforcement Directorate,’ and a new branch was opened in Madras (now Chennai).
- In 1960, the administrative control of the Directorate shifted from the Department of Economic Affairs to the Department of Revenue.
- Over time, the FERA of 1947 was replaced by the FERA of 1973. With the advent of economic liberalization, the regulatory FERA of 1973 was repealed, giving way to the Foreign Exchange Management Act, 1999 (FEMA), effective from June 1, 2000.
- Aligned with the International Anti Money Laundering regime, the Prevention of Money Laundering Act, 2002 (PMLA) was enacted. The Enforcement Directorate was entrusted with its enforcement from July 1, 2005.
- Under the Prevention of Money Laundering Act (PMLA), the ED holds extensive powers of arrest, and obtaining bail in PMLA cases is challenging. There are pending petitions challenging the Supreme Court’s July 2022 judgment upholding these powers.
- The ED’s arrest of an Opposition party Chief Minister, Mr. Soren, adds significance to the situation, going beyond a routine law enforcement event.
- His lawyers emphasized in court on February 1 that the arrest has implications for the country’s political system, urging an urgent hearing for his plea.
- Simultaneously, the ED has summoned Delhi Chief Minister and Aam Aadmi Party leader Arvind Kejriwal to appear before it on February 2 after he failed to attend questioning four times.
- Mr. Soren has framed the case against him as an assault on the tribal communities he represents, calling for a “war against a feudal system” that oppresses the poor, Dalits, and tribals.
- When faced with allegations, politicians frequently resort to shielding themselves through their community affiliations, yet it is undeniable that the Indian legal system more readily reaches the marginalized sections of society.
- The JMM’s challenges extended beyond Mr. Soren’s arrest. The process of selecting a new Chief Minister became complicated due to a family dispute.
- As a compromise, Champai Soren, a seasoned advocate for tribal rights, is expected to assume the role, although the Governor has not extended an invitation for him to form the government.
- The Jharkhand police initiated a First Information Report (FIR) based on Mr. Soren’s complaint under the SC/ST (Prevention of Atrocities) Act, but its viability is uncertain.
- Nevertheless, ED investigations have identified a consistent pattern aligning with the political objectives of the ruling Bharatiya Janata Party (BJP).
Mr. Soren’s arrest comes on the heels of the reconfiguration of the alliance in Bihar, facilitating the BJP’s return to power, with the Governor acting swiftly in support. Instances abound where leaders under the ED’s scrutiny seemingly cleanse their image upon aligning with the BJP. At times, the distinction made by central agencies seems to hinge not on whether someone is corrupt or clean, but rather on their affiliation with the BJP.