- Origin: Established in 1956 as an ‘Enforcement Unit’ (Dept. of Economic Affairs). Renamed ‘Enforcement Directorate’ in 1957 (moved to Dept. of Revenue, Ministry of Finance).
- Nature: A specialized multi-disciplinary financial investigation agency.
- Director’s Tenure: Fixed 2-year term. Amendments to CVC Act & DSPE Act allow three annual extensions (Max 5 years).
- Staffing: Drawn from IAS, IPS, and IRS via deputation and direct recruitment.
Statutory Mandate
- The ED enforces four key statutes:
- PMLA, 2002 (Criminal): Prevents money laundering. Unique due to Reverse Burden of Proof (accused must prove innocence).
- FEMA, 1999 (Civil): Regulates foreign exchange. ED acts as a Quasi-Judicial body for penalties.
- Fugitive Economic Offenders Act, (FEOA) 2018: Allows confiscation of assets of economic offenders fleeing Indian jurisdiction.
- Conservation of Foreign Exchange and Prevention of Smuggling Activities Act (COFEPOSA) 1974: Enables preventive detention for smuggling and forex violations.
Key Operational Powers
- Search & Seizure: Authority to raid and seize incriminating evidence/property.
Asset Attachment:
- Provisional: Attachment of crime proceeds for 180 days.
- Permanent: Confiscation by Central Govt. post-conviction.
- Arrest: Power to arrest based on material evidence (grounds must be communicated).
- Summons: Power to enforce attendance and record admissible statements.
Challenges and Judicial Review
- Performance Metrics: extremely low conviction rate (approx. 40 convictions in ~5,300 PMLA cases between 2014-2024).
- Criticism: Allegations of political weaponization and lack of transparency in case selection.
- Supreme Court Observation:
- ED must respect Federal Principles and not encroach on State subjects (e.g., TASMAC case).
- Emphasized the need for Cooperative Federalism in investigations.
