By Extending ED Director's Tenure, Supreme Court Undermined Its Own Authority

The court’s reliance on an unexplained notion of “national interest” is a serious concern.

Last week, the Supreme Court accepted the Central Government’s submission in favour of a further extension to the current Director of the Enforcement Directorate (ED). While the order of the Court records the submissions advanced by both sides, ultimately the Court’s reasoning hinges on an unclear and unsubstantiated notion of “the larger national interest”. Interestingly, this is the second extension that the court has granted to the current director’s tenure despite finding the extension of his term to be illegal in a judgment rendered on 11th July.

In acceding to the Government’s request for another extension, the Court has both undermined its own authority and exemplified the problems with the loosening of the form and structure of judicial reasoning.

Many accounts of the Supreme Court’s public interest litigation jurisprudence often refer to the Court’s widespread reach in matters of transparency and anti-corruption. For instance, in Vineet Narain v Union of India, the Court overhauled the functioning of the CBI in an attempt to insulate it from political pressure by issuing guidelines akin to legislation using its “power to do complete justice” under Article 142 of the Constitution. It also employed the technique of “continuing mandamus” to monitor investigations by the CBI.

More recently, in Anoop Baranwal v. Union of India, the Court once again relied on Article 142 and created a Committee consisting of the Prime Minister, Chief Justice, and Leader of Opposition to advise the President on the appointment of election commissioners till Parliament enacts a law on the subject. 

However, in the recent proceedings concerning the legality of the repeated extensions granted to the Director of the ED, the Court appears to have substituted its active approach with a passive one.

Recapitulation of Precedent in Favour of Judicial Deference

In an ironic twist, the order from last week uses the Court’s discretionary power to undermine its findings on specific questions of law, thus diluting rather than enhancing its ability to do justice. In the earlier round of litigation, the Petitioners challenged the amendments to the Central Vigilance Commission Act, and the Delhi Special Police Establishment Act in 2021 to allow for the tenure of the Director to be extended one year at a time up to a total of 5 years. The court upheld these amendments.

Justice Gavai’s judgment in that case bears similarities with his opinion upholding the Demonetisation exercise (which we have written about here), where a considerable portion of his analysis discussed the scope of judicial review at an abstract level to hold that judicial power must be exercised sparingly - when unconstitutionality is apparent.

This recapitulation of precedent in favour of judicial deference strikes a dissonant chord with India’s constitutional scheme as well as with the Indian judiciary’s gradual broadening of its jurisdiction through PILs.

As Gautam Bhatia has noted, against this backdrop of judicial deference, the 11th July judgment failed to meaningfully engage with the specific argument of the Petitioner - that the amendment, enabling a piece-meal extension every year can serve as a carrot or stick in the hands of the government, causing the Director to act in a manner favourable to the government in the hope of securing extensions. 

While the Court upheld the amendments, it found the recent extension of the term of the Director of the ED to be illegal.

The root of this answer lies in a previous apex court judgment, which the Supreme Court now noted, had been violated. In this order of 8 September 2021 by a bench of Justice Nageshwar Rao and Justice Gavai, the court had approved the present ED Director’s extension beyond two years but had held that no further extension ought to be granted as he had attained the age of superannuation. Despite the Court’s order, the Government extended his tenure after amending the statute and rules in question.

The order of 11 July 2023 passed by the Justice Gavai-led bench cited past precedent to hold that a specific direction of the Court could not be annulled by a subsequent amendment and declared the extension illegal. Even so, the Court ultimately permitted the Director to continue till 31 July 2023 in “larger public interest”.

The Second Extension

This time they sought a further extension of the term of the ED Director till 15 October, citing the pending evaluation of India’s compliance with the Financial Action Task Force recommendations.

Petitioners opposed this argument on the grounds that the ED is only one among multiple bodies concerned with the FATF evaluation, that in any case the main authority is the Secretary, Department of Revenue and not the ED, and finally, that there is no reason to believe that other persons are not competent to lead the ED during this phase.

In a brief order, the Court, without engaging with these submissions in any detail, granted an extension of the ED Director till 15 September, while simply stating that it is “taking into consideration the larger national interest”.

Notably, the Court did not provide any specific reason to explain how it arrived at the termination date of 15 September. With respect, the partial acceptance of the argument in favour of an extended term for the Director of Enforcement appears to be more like an arbitrary bargain with the Government than a clear exposition of the legal position.

This dearth of reasoning in the order, is a continuing cause for concern because the Government may be more inclined to abuse its power to prolong appointment periods in the belief that the judiciary would allow such prolongation - while perhaps reducing the period ever so slightly.

The Ambiguity of 'National Interest'

The court’s reliance on an unexplained notion of “national interest” is an even more serious concern than the court’s unsubstantiated conclusion that the Director of Enforcement’s term shall cease on 15th September.

Strikingly, the concept of “national interest” appears out of nowhere. It is not to be found in the provisions of the CVC Act and the DSPE Act as amended in 2021, which provide for the possibility of extended appointments in pursuit of public interest for reasons which are to be recorded in writing.

National interest is an even more amorphous concept than public interest. While the Indian judiciary now has a relatively long history - albeit a troubled history - of enabling private individuals to advance claims over what constitutes public interest, the field for legal argumentation over what is in the “national interest” is even further skewed in favour of the government.

At the very least, if the court had focused on the statutorily recognised concept of public interest, it would have still been required to address the submissions previously advanced by the petitioners and the amicus curiae concerning how the grant of further extensions to the Director of Enforcement militates against public interest by incentivising members of fourth branch institutions to act in favour of the ruling party.

By introducing a new concept (national interest) at this stage, the Court did not engage with the substance of the submissions advanced before it about how public interest ought to be identified and interpreted in this case. All things considered, the court’s approach of using national interest as an overriding factor in the face of contrary legal norms is one that accentuates the dangers of public-interest-style reasoning - a style of reasoning that appears to be characterised by its ability to support almost any conclusion. 

(The authors are Delhi Based advocates. This is an opinion piece and the views expressed are the authors' own. The Quint neither endorses nor is responsible for them.)