ED officials are seen carrying huge amounts of money in large containers, stacking the money in the form of letters E and D before the press conference. But what happens to the cash and assets seized after the trials?
ED Raids: Searches conducted by the Enforcement Directorate increased 27-fold to 3,010 between 2004 and 2014, compared to 112 inspections. Recently, the Enforcement Directorate has been raiding the houses of businessmen, political leaders and officials. The central government seized Rs.17 crore from a Kolkata-based businessman in connection with a mobile gaming application scam. Similarly, enforcement agencies recently raided the premises of former Bengal minister Partha Chatterjee’s aide Arpita Mukherjee and seized Rs 27 crore in cash and gold. In May, around Rs 20 crore in cash was seized in several raids involving IAS officer Pooja Singhal in connection with the Jharkhand MGNREGA fund fraud case, a mining scam.
From 2014 to 2022, the number of raids conducted by the Enforcement Directorate increased 27 times to 3,010, compared to 112 ED raids between 2004 and 2014. As on 31 March 2022, in respect of cases under investigation by the Agency, Rs. Assets worth lakhs of crores have been seized by the Enforcement Directorate. Of this, more than Rs.57,000 crores are related to bank fraud and Ponzi scam cases. According to the Enforcement Directorate website accessed on September 11, 5,422 cases have been registered under PMLA in 17 years. But the conviction rate is very low as only 25 people were found guilty.
Enforcement Directorate officials are seen carrying huge amounts of money in large containers, stacking the money in the form of letters E and D before the press conference. But what happens to the cash and assets seized after the trials? After the searches are conducted and the money is seized by the ED, it is deposited with the agency at its office. Central investigative agencies including ED, CBI or Income Tax Department are empowered to conduct searches and investigations to seize movable and immovable assets in cases of money laundering, irregularities, tax evasions or irregularities.
After confiscation, a report Panchnama is filed with the details of seized money and assets, counting the properties. The money is deposited in an ED bank account in a public sector bank like Reserve Bank or State Bank of India. Any marks, signs or evidence of cash, jewelery or other valuables shall be preserved in a sealed envelope to be presented as evidence in court. After the accused are convicted in court, ED transfers the money to the government under Section-9 of PMLA. It is used for government expenditure.
In cases where money is taken as loans from defaulters, the money is also transferred to the borrowing banks. Recently, the agency transferred assets worth Rs 8,441 crore to the public sector banks that suffered losses due to the bank frauds of Vijay Mallya, Nirav Modi and Mekul Choksi, who fled the Enforcement Directorate’s action in connection with the bank fraud case. Currently, ED has returned around Rs.23,000 crore to the public sector banks by selling the properties of the accused.
If the Enforcement Directorate seizes property and money under the PMLA Act, it can seize the property for a maximum period of 180 days. The ED has to prove that the confiscation of assets is valid within this six-month period. If this is not verified the property will be automatically released from ED attachment. The accused may challenge the finding in the Appellate Tribunal within 45 days. In the case of property attached by the agency, the accused may use the property until the case is over. However, during the period of attachment, the property remains unattached to the accused till the conclusion of trial.
In 1995, the ED seized 7.95 lakh cash from travel agency owner Manak Kala for violating the Foreign Exchange Act. ED imposed a fine of Rs 75 lakh in 2014 and ordered the forfeiture of Rs 7.95 lakh. He challenged the order before the Special Director (Appeals) who reduced the penalty and later dismissed his appeal in the Foreign Exchange Appellate Tribunal. So he approached the High Court. The High Court upheld his appeal, setting aside the tribunal’s order, holding that the confiscation of Rs 7.95 lakh from the Kala office was not reasonable.
In 2020, the Delhi High Court ordered the ED to return Rs 7.95 lakh illegally seized from Kala along with interest. The court ordered to repay the seized amount with six percent interest per annum. ie from the date of confiscation in 1995 to the date of payment.
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