Chhattisgarh liquor scam: Don’t create atmosphere of fear, SC tells ED

PTI, May 16, 2023, 2:58 PM IST

Don’t create an ”atmosphere of fear”, the Supreme Court Tuesday told the Enforcement Directorate (ED) after the Chhattisgarh government alleged the probe agency is ”running amok” and is trying to implicate Chief Minister Bhupesh Baghel in a money laundering case linked to the alleged Rs 2,000 crore liquor scam in the state.

The state government alleged before a bench of Justices S K Kaul and A Amanullah that several state excise department officials have complained the ED is threatening them and their family members with arrest and is ”trying to implicate the CM (chief minister)”. The officers, the government claimed, have said they will not work in the department.

”The ED is running amok. They are threatening excise officers,” senior advocate Kapil Sibal, appearing for Chhattisgarh, told the bench.

”It is shocking state of affairs. Now elections are coming and that is why it is happening,” he told the bench. Additional Solicitor General S V Raju, appearing for ED, countered the allegations and said the agency is probing a scam in the state.

”Even a bonafide cause becomes suspect when you behave like this,” the bench observed, adding, ”Don’t create an atmosphere of fear”. Last month, Chhattisgarh became the first state to move the apex court challenging the constitutional validity of certain provisions of the Prevention of Money Laundering Act (PMLA) alleging that central investigating agencies are being misused to ”intimidate, harass and disturb” the normal functioning of the non-BJP state government.

The Bhupesh Baghel-led Congress government has filed an original suit through advocate Sumeer Sodhi challenging the law under Article 131 of the Constitution which empowers a state to move the Supreme Court directly in matters of dispute with the Centre or any other state. The apex court was on Tuesday hearing a plea filed by two Chhattisgarh-based persons, one of whom has been arrested by the ED in connection with the case, challenging the proceedings initiated by the anti-money laundering agency.

The state has filed an application seeking impleadment in the petition, claiming that 52 officers of the excise department have complained in writing alleging ”mental and physical torture” by ED officers during the course of investigation.

In its application, the state has claimed,” Several officers have made serious allegations that not only were they threatened but the members of the family of the officers were also physically abused and threatened to sign blank pages or pre-typed documents.

”The officers in the State are being threatened by the officers of the Directorate of Enforcement with threat of their arrest or arrest of their family members and being implicated in cases if they do not make and sign the statement as desired by the officers and to implicate the Chief Minister and other senior officers of the state administration,” the application said.

The bench asked the ED to respond to the application filed by the state.

The state, in its application, has claimed the officers who have complained in writing are now being threatened with coercive actions and forced to retract the statements made before the state police ”which itself is an interference with the investigation of crime (law and order) which is a subject matter falling in exclusive domain of state list”.

It said there is a law and order situation in the state and an ”administrative standstill” due to the ED’s actions.

”It is further submitted that the public officers of the State are scared and there is an overwhelming sense of apprehension and unease due to threats made by the officers of Enforcement Directorate. These actions of the Enforcement Directorate are a part of well orchestrated and targeted attempt of de-establishing the state government. Hence, the applicant/ State of Chhattisgarh has no option but to approach this court,” it said.

The state said the primary issue which has constrained it to approach the top court is that the actions of ED are ”not only coercive, illegal, biased, whimsical, politically motivated” but also completely without jurisdiction and authority of law. ”It is submitted that the respondent investigating agency is acting on behest of political masters and the investigation is completely biased, non independent and all actions are premeditated to bring de-stability in the state of Chhattisgarh,” it claimed.

The state alleged the investigation being carried out by the ED is wholly without jurisdiction and illegal in as much as there is no underlying predicate offence.

”The illegal investigation conducted by Enforcement Directorate in the present case is contrary to the principle of federalism which is a part of the basic structure of the Constitution,” it said.

The application said that multiple complaints have been received by the office of the chief minister by various citizens of the state, including businessmen, state officials, highlighting various acts of ”blatant” abuse of power by the ED.

The money laundering case stems from a 2022 income tax department charge sheet filed in a court in Delhi. The ED had earlier told a court about an alleged massive scam in liquor trade in Chhattisgarh perpetrated by a syndicate comprising high-level state government officials, private persons and political executives that generated tainted money more than Rs 2,000 crore in 2019-22. The federal agency had also alleged bribees were collected from distillers in the state on per liquor case basis procured from the CSMCL (state body for purchase and sale of liquor) and country liquor was being sold off-the-books. According to the ED, bribes were taken from distillers to allow them to form a cartel and have a fixed market share.