‘Prevention better than cure’ true in economic crimes, too

In the context of arrest of MLC Kavitha by Enforcement Directorate (ED) officials on March 15, 2024, it is ponderable whether, precisely not probing merits or demerits of this particular case, could there be acomprehensive, wide-ranging, free, frank, and fair debate and discussion on such happenings from time to time for a ‘National Political Consensus.’ It is equally desirable that the law enforcing authorities would, henceforth, be little more vigilant, attentive, careful, and conscientious in ‘Preventing Economic Offences,’ rather than conduct an unpleasant post audit. What Dutch philosopher Desiderius Erasmus rightly said that, ‘Prevention is Better than Cure’ may be made applicable in case of economic offences also.

Prevention serves both scrutiny and pre-audit of the offence or initiating action beforehand, and avoid innocent persons (at least in some cases) being implicated on casual suspicion in the offence, and let off after longer periods of confinement. Influential and wealthy persons, however, may manage to get scot-free, perhaps with some hiccups. There are significant instances of absolutely innocent persons, unconnected with offence, spending their precious life as under trials, in different custodies, before they were released by courts, when eventually charges were not proved.

Kavitha’s arrest, according to ED officials, preceded by due process, like introducing themselves, showing search warrant, systematic search by the team of ED and IT agencies for five hours, recording voluntary statement of Kavitha etc., was necessitated in view of her involvement in the alleged money laundering Delhi liquor scam, in which she was named as an accused. Her brother KT Rama Rao’s demand for a transit warrant, apparently, was interpreted as, ‘Obstructing ED officers during the enquiry’ by the ED.

Fair enough, but, since ED and CBI questioned her earlier, eliciting fairly good information, now hurriedly arresting her probably was avoidable. Instead, further interrogation would have been carried at her residence, adhering to strict legal provisions. Kavitha was taken to ED office in Delhi, and after a night’s stay there, next morning she was produced in a Delhi court which remanded her to ED custody till March 23, which was further extended by three days. Delhi CM Arvind Kejriwal was also arrested by ED six days later, in the same case, and was produced in court which remanded him also to ED custody till March 28.

Delhi liquor scam, often labelled as a ‘Political Scandal ’, had its roots when the Delhi government’s excise policy from 2021 to 2022 was introduced. The allegation was that favours to owners and shareholders in the form of waivers, reduction of license fee and creation of numerous licences in exchange of bribery seem to have taken place. Kavitha and a few others were linked to a ‘South Group Lobby’ of liquor traders. In the ED chargesheet, she was accused of paying Rs 100 crore in kickbacks to Aam Aadmi Party leaders in exchange for illicit advantages. Further allegation was that Kavitha, Kejriwal and Manish Sisodia had a political understanding.

In India, over a period, reputed and powerful persons in the society from different fields, were either involved or implicated in significant scams. Commonwealth Games, Adarsh Housing Society, coal mining, Kingfisher Airlines (Vijay Mallya), Punjab National Bank fraud (Nirav Modi), Satyam (Ramalinga Raju), Saradha Group scandal, Coalgate, 2G, ABG Shipyard, ICICI Bank-Videocon, Yes Bank-DHFL, National Herald, sand mining, Jharkhand mining etc., were among them.

Ever since the ED was entrusted with enforcement of the Prevention of Money Laundering Act (PMLA), hardly 5-6% of people from among the arrested were held guilty by courts. Nishka Kamath of Nalanda Law College (University of Mumbai) in his article ‘Biggest Money Laundering Cases in India’, published by Sneha Mahawar, mentioned that the ED registered 1,180 cases during the financial years between 2012-13 and 2021-22, besides receiving 3,985 complaints under the PMLA. Union Minister Pankaj Chaudhary in August 2023 told Rajya Sabha that ED had carried out 3,010 raids and attached proceeds of crime of Rs 99,356 crore under PMLA since NDA came to power in 2014, and filed charge sheets in 888 cases, resulting in the conviction of 23 accused. The allegation is that since 2014 there has been a fourfold jump in ED cases against politicians, and 95% of them are from the Opposition. Then, what is the message coming out of this?

Cases initiated decades ago on some individuals in numerous instances, kept in jails as undertrials for a long period, and released on bail, but not before several times in different courts, are still pending. For instance, Y S Jagan Mohan Reddy in an alleged disproportionate assets case was kept in jail for ‘Precious 16 Months,’ before he was released on bail. Similarly, in Gali Janardhana Reddy’s illegal mining case senior IAS officers were arrested and jailed. Who would fill their precious life spent in jail and compensate the lost honour? Why these cases are not decided either way is a million-dollar question.

It remains a question if quick relief by courts as seen in several instances is available to all citizens alike or otherwise. Whether are all being treated equally or if some are more equal than others before the law is the question that requires a precise answer, debate, and discussion. Do some of these reliefs have any linkage to the ‘Capacity and Capability’ and influence and wealth of individuals to engage competent advocates?

An arrest involves taking a person into custody, and after being taken into custody, the person can be questioned further or charged. In police custody, the accused is lodged in police station lockup, whereas in the case of judicial custody, it is the jail where the accused is put. ‘Arrest, Remand and Bail’ are components related to investigation. All these, however, curtail personal liberty of an individual, if the authorities do not adhere to ‘Principles of Natural Justice’ in addition to legality. To draw an accurate line between ‘Absolutely Legal and Absolutely Illegal’ may be delicate. International practices, conventions, ‘Raj Dharma, and Ethics since Time Immemorial’ of our own country guide these in their correctness. 39 UNO ‘Body of Principles’ do profess protection from any form of ‘Detention or Imprisonment.’

Article 22 of the Indian Constitution pertains to protection of a person's right to personal liberty and safeguards against detention or arrest without proper legal procedure, which many a time is decided by courts only when they are produced. On March 22, the Supreme Court, dismissing the Union government’s review in a case, held that the ED must furnish the accused with reasons for arrest in writing. Kavitha challenged her arrest by ED, and moved Supreme Court for bail. The court dismissed her plea, asked her to seek remedy from the first tier of judicial hierarchy. The three-member bench observed that, “merely because she is a political person or someone who can afford to approach the Supreme Court directly does not mean she can bypass statutory routes.” Senior advocate Kapil Sibal representing Kavitha made a notable observation. He said that, “When the history of this court will be written, this will not be in gold.” Equally notable was the response of the bench that, ‘It is okay, we will see. We have to act uniform.”

Meanwhile, Rahul Gandhi revealed that a Maharashtra leader, who left Congress, cried to his mother, saying that, “he had no power to fight the ‘Shakti’ and, hence, do not want to go to jail.” Rahul added that “Every Autonomous Institution (ED, CBI or IT) have traded their spines to the Centre. In slight deviation from this, Telangana CM Revanth Reddy not only described Delhi liquor scam as a ‘Lengthy TV Serial’ but also said that the arrest of Kavitha was nothing but an ‘Election Stunt and Political Drama.’

Last but not least, former Telangana CM K Chandrashekhar Rao in a statement described the arrest of Kejriwal by ED as another ‘Dark Day in the Country's Democratic History’ and strongly condemned actions of the BJP-led Union government which is using ED, CBI, and IT for obliterating the opposition. KCR demanded immediate withdrawal of cases and release of those arrested including Kavitha.

Well, if such, ‘Need to be Highly Reputable Institutions’ do not re-establish their ‘credibility,’ better than now, to live up to people’s expectations and infuse confidence in them, where is fairness? And hence, prevention is better than cure in economic offences.