Madras HC Verdict a Wake-Up Call on ED’s Lawless Conduct

Mohammad Shafi, National Vice President of the Social Democratic Party of India (SDPI), expresses deep concern and unequivocal condemnation of the Enforcement Directorate’s (ED) persistent overreach under the Prevention of Money Laundering Act (PMLA). The recent Madras High Court ruling in the RKM Powergen case has starkly exposed how the Modi government has weaponized central agencies to stifle dissent, target businesses, and erode the foundations of democracy.

The Madras High Court’s strong observation—that the ED is neither a “drone” nor a “super cop” acting at will—underscores a vital legal truth: its powers are strictly limited to cases involving a predicate offence and identifiable proceeds of crime. Arbitrary asset seizures, often carried out without a registered complaint or judicial oversight, clearly violate Section 66(2) of the PMLA, which requires that non-PMLA offences be referred to the appropriate agencies. Under the Modi regime, the ED has become a political tool used to harass opposition leaders, activists, and businesses critical of government policies. The arrest of SDPI National President MK Faizy, based on fabricated PMLA charges, is a glaring example of this abuse. Such actions not only compromise institutional independence and public trust but also harm the economy by disrupting legitimate business operations and deterring investment.

The SDPI welcomes the judiciary’s timely intervention. The Madras High Court’s verdict, along with the Supreme Court’s precedent in Vijay Madanlal Choudhary vs. Union of India, makes clear that PMLA proceedings cannot proceed without a predicate offence. These rulings serve as crucial checks on executive excess. However, judicial rebukes alone are not enough. The SDPI demands urgent and sweeping reforms to ensure that the ED functions within its legal mandate, free from political interference. There must be judicial oversight of central agencies, clear guidelines to prevent abuse, and compensation for victims of unlawful seizures. The independence of institutions like the ED and CBI must be restored.

The SDPI stands in full solidarity with those targeted by these authoritarian tactics. We call upon citizens and civil society to resist this assault on the rule of law. Democracy can only survive through sustained vigilance and collective action.