West Bengal School Service Commission (SSC) recruitment scam. West Bengal minister Partha Chatterjee was arrested in this case, then Mamta government dismissed him from the cabinet. CBI is investigating the scam. The Enforcement Directorate (ED) is investigating under the Prevention of Money Laundering Act (PMLA) regarding the manipulation of money in the case. Note only notes are being recovered. So far, about Rs 50 crore in cash has been recovered from two houses of Arpita Mukherjee, a close aide of Minister Partha Chatterjee.
Even before this, ED has been recovering crores of rupees in cash in many scams. In Jharkhand, more than Rs 36 crore cash has been seized in the last two months in cases related to illegal mining. In May, the ED had recovered 17 crore cash from the house of CA, an IAS officer from Jharkhand, Pooja Singhal. The pictures of these seizures that came out showed a pile of notes. Now the question is what does ED do with this money? Where is this money stored? And how is that money used?
When these questions are asked to any common man, he can answer that when the government agency is confiscating money, it will go to the government itself. The point is right. The money will go to the government treasury only. But it is not so straightforward. Its a complete process. To know about this process, we spoke to former deputy director of ED Satyendra Singh. He has served in ED for 36 years. Retired from the post of Deputy Director in the year 2019.
How will the money come to the government?
Satyendra Singh told that after the seizure of cash, ED keeps it in its office. After this the entire money is deposited in the ED’s bank account. Singh told,
“Soon after this, these money are converted into fixed deposits. In this, complete information about the seizure is given. So that it is further known who had how much money and in what form it was deposited.”
According to Satyendra Singh, when a person is proved guilty in the court, the ED transfers those money to the account of the Government of India. Then it becomes the money of the Government of India. The government spends that money according to its own accord. Whether it is spent in development works or in paying salaries.
Apart from this, money also goes to the victim party. Let us understand this with an example. Vijay Mallya, Nirav Modi and Mehul Choksi defrauded the country’s public sector banks of more than 22 thousand crores. All of them fled abroad. ED started investigation of the case and started confiscation of properties of all of them. According to the ED website, so far, assets worth more than Rs 19 thousand crore of all these have been attached. Out of these, assets worth Rs 15,000 crore have been handed over to the banks, from where these three fugitives did the fraud.
If not proven guilty?
So the person from whom the cash was recovered will be returned by the investigating agency. One such order was given by the Delhi High Court in February 2020. In 1995, the ED had seized Rs 7.95 lakh from the owner of a travel agency for violating the Foreign Transaction Act. Later, he was not proved guilty. The Delhi High Court had directed the ED to return the money (about Rs 20 lakh) with 6 per cent interest to the person.
What is done with real estate?
Sometimes the ED also seizes houses, office buildings and different types of properties. Satyendra Singh says
“If a house is to be attached, a notice is given to vacate it first. The timing of this notice varies. When this date ends, the ED locks it and takes it in its possession. If a factory is attached, then the profit earned from it goes to the ED during the course of the case.”
The former deputy director told that after the seizure of the property, the matter goes to the adjudicating authority in Delhi. Notices are also sent to different parties involved in the case so that they can defend. The educating authority has 180 days to confirm the attachment. As soon as you confirm, ED takes that FD amount in its possession. This money is not always kept in cash.
On the other hand, Chirag Gothi, associated with India Today, says that if the accused give correct information about the recovered money, then the agency also returns ‘money or other assets from the right source’ among them. It depends on the individual case. After the benami properties are confiscated, the concerned department sells them. The income that comes from this is given to the Finance Ministry. All this happens when the final decision of the court comes.
ED has seized more than 1 lakh crore assets
ED takes action in any case under total 4 laws. Most of the time we hear of two laws – the Prevention of Money Laundering Act, 2002 (PMLA) and the Foreign Exchange Management Act, 1999 (FEMA). There are two more laws under which the ED deals with property confiscation and action in economic offences. These laws are the Fugitive Economic Offenders Act, 2018 (FEOA) and the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA).
Under PMLA, ED has so far attached assets worth more than Rs 1 lakh crore. This figure is as of 31 March 2022. On Wednesday, July 27 itself, the Supreme Court had legalized the right of raids, interrogation and arrest by the ED under the PMLA. The ED website states that 5422 cases were registered under PMLA in 17 years. So far only 25 people have been proved guilty in these cases.