‘Legs are tied’ as cases are based on FIRS filed by other agencies: ED

ON FINANCE minister Arun Jaitley’s statement that the Enforcement Directorate (ED) should expeditiously use its penalising powers to ensure taxcompliance, ED director Karnal Singh said the agency’s “legs are tied” as its cases are based on FIRS filed by other agencies and and once the principal case falls, courts consider the ED case of no consequence. This, he said, had locked the agency in a “threelegged race”.

The ED director’s remarks were seen as a reference to the Aircel-maxis case where a special court had discharged former telecom minister Dayanidhi Maran and others and also asked for release of their property attached by ED. The agency has challenged the decision in the Supreme Court.

Talking about bottlenecks, the agency faces in its investigations, Singh said, “...understanding of the law itself creates problems. Our legs are tied with the scheduled agency. That puts us in a situation of a three-legged race. Many courts consider that if the other case fails, the ED case automatically fails. We have gone to the SC in one case.”

He said he believed that an ED case would stand despite the failure of the predicate offence, such as those registered by the CBI.

“...my view is that rules of the game are different for a predicate offence investigation and an ED investigation. In case of police, statement given before police is not admissible in the court. But, statement given before an ED officer is admissible in the court. So, appreciation of evidence is also different,” he said.

Singh spoke at length on money laundering and even termed countries prone to the menace as “dhobi ghat where people come to clean their dirty money”. He said that 27 per cent of cases investigated by ED were related to banking and other frauds, while 20 per cent were related to corruption. He, however, said that in all cases, the preferred mode of money laundering was through shell companies followed by investment in properties. “On April 1, ED conducted searches at 134 premises in 16 states covering 1,000 shell companies. We are supplementing the I-T department,” he said.