The Enforcement Directorate: Power, Overreach And Political Instrumentalization In India
- IJLLR Journal
- 5 hours ago
- 2 min read
Rishabh Dwivedi & Ayoushi Jain, Vivekananda Institute of Professional Studies
ABSTRACT
The Enforcement Directorate (ED) has become one of the most potent and most discussed investigative bodies in the regulatory environment in India today. The agency was founded in 1956 to implement the Foreign Exchange Regulation Act (FERA), 1947. Since then, the agency has developed significantly especially with the implementation of the Prevention of Money laundering Act (PMLA), 2002. What was initially a foreign exchange regulator has evolved into a central institution that is fighting money laundering, financing of terrorism, economic fraud and sophisticated cross- border financial crime- this is a change in the direction of a security-based concept of economic governance in India. With the continued integration of India in the world financial systems, the role of the ED in safeguarding financial independence, halting money laundering and maintaining market integrity has been gaining more significance. But its growing powers have produced both popular and constitutional apprehension. Critics say that the broad discretionary powers of the ED have occasionally led to political persecution of opposition leaders, activists and journalists. The enormous increase in enforcement procedures, compared to the PMLA conviction rate of less than one percent, has fuelled concerns that investigative procedures may be used as punitive measures with the long-term custody interrogation, detention of property and long-term pre-trial custody serving as extrajudicial punishment. The paper will discuss the evolution of the ED’s powers over time, the evolution of the legislation and the judicial interpretation of the same with reference to the processes of attachment of property, search and seizure, arrest and bail under the PMLA. It uses a doctrinal approach and examines statutory passages, judicial decisions, parliamentary documents, governmental reports and commentary in the scholarly literature to determine whether the existing enforcement regime constitutes a constitutionally legitimate balance of the national security goals against the preservation of the fundamental rights. The paper also outlines possible structural changes, such as increased judicial accountability, increase in the evidentiary burden, independent review body and increased transparency of financial crime enforcement. Finally, the paper adds to the larger discussion on the protection of the Indian financial system without placing the democratic principles of the constitutional republic in the centre.
