13 July, 2025

PMLA 2/8 - Justification

“Power does not corrupt men; fools, however, if they get into a position of power, corrupt power.”

-        George Bernard Shaw

History has consistently demonstrated that oppression is rarely the act of a single despot. It is more often the by-product of flawed systems that slowly erode public institutions and sentiment. The world’s most brutal regimes did not emerge overnight; but from a gradual collapse of governance and civic trust. Post-World War I sanctions crippled Germany’s economy, sowing the seeds of resentment that gave rise to Nazism. Adolf Hitler was a symptom, not the cause. The fall of the Soviet Union followed decades of systemic exploitation of the peasantry. Even the mighty Roman Empire collapsed under the weight of institutional decay, veiled by entertainment and fake austerity.

In the same vein, the Enforcement Directorate (ED) does not operate in isolation. It is the product of a larger socio-political environment: one where citizens have passively allowed the expansion of state power, often under the guise of good governance. A bloated government structure has demanded more revenue, leading to a taxation regime that views the public with inherent suspicion. Trust between citizen and state has eroded. In this environment, insecurity and inefficiency flourish, governance becomes reactive, and the seeds of corruption are sown deep.

There are three reasons why the ED has come to wield such power:

 

1.      Incentivization Metrics

Like any bureaucracy, the ED officers’ performance is evaluated through quantifiable metrics: number of arrests, recoveries of assets, filing of prosecution complaints, and conviction rates. This target-based model inevitably distorts investigative priorities. Once a case is registered and an arrest has been made, there is institutional pressure to justify the action – regardless of the strength of evidence. This may take any fair, unfair, legal, or illegal means. Given the impetus on revenue collections, the ED also has a mandate to recover monies to fill in government coffers. With this, there is a reputational target associated in terms of which officer makes how many arrests. These are all natural phenomena of any target-based profession.

The trials in PMLA cases face long pendency in courts. This structure offers no incentive to improve the quality of investigations. Instead, it encourages procedural aggression to meet administrative goals in terms of recoveries and arrests. Any organization operating under such a system, where performance is based on action, not outcomes, will behave similarly.

The ED also takes little responsibility for the speed of the trial repeating that it is only an investigating authority and have no role once the trial commences. However, this argument is forgotten during bail hearings. During such bail hearings, the ED not only vehemently opposes bails, but also appeals in higher forums where courts do grant bails.

 

2.      Commodification of Power

In India today, power is increasingly transactional. Whether it’s a street-level traffic cop or a member of Parliament, positions of authority are attained not through merit, but through money and influence. This commodification of power means that public office is seen as an investment – one that must yield returns. Naturally, the holders of such positions, both significant and insignificant, must endeavour to extract value from them, fuelling a self-reinforcing cycle of corruption.

This environment breeds contempt for institutions themselves. Recent incidents underscore this erosion: the outgoing SEBI Chairperson was denied a proper farewell; the Supreme Court has openly called for introspection as public faith in the judiciary wanes; PMLA cases have been likened to overly misused domestic violence charges. When positions are bought, not earned, there is little incentive to uphold the dignity they demand. Power is no longer a responsibility – it is an asset to be exploited.

Even the machinery responsible for appointments is affected. This is not an aberration or a one-off instance anymore. It has become a feature of administration. When appointments to positions of oversight are themselves up for sale, accountability vanishes. The system becomes a network of quid pro quo – and the abuse of office becomes not the exception, but the rule.

 

3.      Unchecked Powers

The PMLA grants the ED sweeping powers, particularly under Sections 24 and 50. These provisions invert the principle of innocent until proven guilty and enable arrests, attachment, recording of statements, and raids with minimal judicial scrutiny. Even the raids do not need any judicial warrant which goes against the principles of life and liberty under Article 21 of the constitution. Statements made before ED officials are admissible in court, unlike with the police. Safeguards that apply to other investigating authorities are conspicuously absent here.

This legal architecture places enormous, unaccountable power in the hands of a large and growing organization. Like any bureaucratic machine, the ED has its share of under-motivated or under-skilled officers – but when everyone is empowered to act without meaningful checks, accountability dilutes. It results in a tragedy of the commons: if one officer can meet their targets through shortcuts, why should another work harder to build a robust case?

In fact, why shouldn’t the officer, just once in a while, abuse that power for personal gains – money, power, property, or even if just to meet a Bollywood celebrity. After all, everyone else is doing it.

The demands of the job are heavy. The tools at hand are overwhelming. The incentives are skewed. In such an environment, abuse is not an anomaly – it is an inevitability.

 

The rise of the ED and the gradual normalization of its excesses cannot be understood merely through the lens of statutory interpretation or isolated misuse. It is a reflection of a broader institutional decay – a public that has accepted overreach in the name of order, a system where positions of power are bought and sold, and a legal framework that rewards action over justice. If left unchecked, these forces will not just undermine the rule of law – they will redefine it entirely. Power without oversight does not drift toward justice – it hardens into habit. And habits, once institutionalized, become law. True accountability begins not just with reforming the ED, but with dismantling the culture that created and emboldened it. It is not the ED that threatens the rule of law, but our silence when we forget it.