Enforcement Directorate (ED): Structure, Jurisdiction, and Impact on Economic Crime Control

The Enforcement Directorate (ED) stands as a pivotal agency in India's fight against financial crimes, operating under the Department of Revenue, Ministry of Finance. Its mandate encompasses enforcing stringent economic laws aimed at combating money laundering, foreign exchange violations, and the flight of economic offenders. This detailed exploration delves into the ED's historical evolution, intricate structure, vast jurisdiction, significant impact through landmark cases, and the ongoing debates surrounding its powers.

Understanding the Enforcement Directorate: Structure, Jurisdiction, and Impact

Introduction: The Guardian of India's Financial Integrity

In an increasingly globalized world, financial crimes pose a significant threat to national economies and security. India, too, grapples with complex issues like money laundering, illicit foreign exchange transactions, and the challenge of economic offenders fleeing the country. At the forefront of combating these sophisticated financial offenses is the Enforcement Directorate (ED). Established to uphold economic laws and safeguard the nation's financial framework, the ED plays a crucial role in maintaining economic stability and transparency. This comprehensive guide will unravel the ED's journey, its operational mechanisms, the legal statutes it enforces, and its profound impact on India's financial crime landscape.

1. Historical Background and Evolution

The genesis of the Enforcement Directorate dates back to May 1, 1956, when an "Enforcement Unit" was formed within the Department of Economic Affairs, Ministry of Finance. Its initial purpose was to address violations of exchange control laws under the Foreign Exchange Regulation Act, 1947 (FERA '47).

A year later, in 1957, this unit was renamed the "Enforcement Directorate." Its administrative control was subsequently transferred to the Department of Revenue in 1960, where it has largely remained, except for a brief period between 1973 and 1977 when it was under the Department of Personnel & Administrative Reforms.

The ED's mandate significantly expanded with the introduction of new legislation:

• Foreign Exchange Regulation Act, 1973 (FERA '73): Replaced FERA '47, further empowering the Directorate.
• Foreign Exchange Management Act, 1999 (FEMA): A civil law that superseded FERA '73, aiming to facilitate external trade and payments and promote an orderly foreign exchange market. The ED assumed responsibility for enforcing FEMA from June 1, 2000.
• Prevention of Money Laundering Act, 2002 (PMLA): A criminal law enacted following the recommendations of the Financial Action Task Force (FATF), granting the ED the crucial responsibility to investigate money laundering offenses, attach proceeds of crime, and ensure prosecution. This came into effect from July 1, 2005.
• Fugitive Economic Offenders Act, 2018 (FEOA): This Act was passed to deter economic offenders from evading Indian law by remaining abroad. The ED was entrusted with its enforcement from April 21, 2018.

Today, the ED functions as a multidisciplinary organization, comprising officers from various prestigious services such as the Indian Administrative Service (IAS), Indian Police Service (IPS), and Indian Revenue Service (IRS), alongside its own cadre.

2. Organizational Structure of the Enforcement Directorate

The Enforcement Directorate is structured hierarchically to ensure efficient operation and coordination across the country.

• Headquarters: The ED's headquarters are located in New Delhi, headed by the Director of Enforcement. The Director holds the rank of Additional Secretary to the Government of India and is responsible for overseeing the agency's operations, reporting to the Department of Revenue, Ministry of Finance. The tenure of the Director, initially fixed at two years by the CVC Act, 2003, can be extended for up to five years, with one-year extensions at a time, as per amendments in 2021 to the Delhi Special Police Establishment Act, 1946.
• Regional Offices: There are five regional offices located in Mumbai, Chennai, Chandigarh, Kolkata, and Delhi. Each regional office is led by a Special Director of Enforcement.
• Zonal Offices: The Directorate has 10 Zonal offices, each headed by a Deputy Director.
• Sub-Zonal Offices: There are 11 sub-zonal offices, each headed by an Assistant Director.

This structured hierarchy facilitates effective enforcement and coordination of activities across different regions of India.

Organogram of Enforcement Directorate Structure

graph TD
    A[Ministry of Finance] --> B[Department of Revenue]
    B --> C[Director of Enforcement]
    C --> D{Special Directors of Enforcement<br>(Regional Offices: Mumbai, Chennai, Chandigarh, Kolkata, Delhi)}
    D --> E{Joint Directors<br>(Zonal Offices)}
    E --> F{Deputy Directors<br>(Zonal Offices & Sub-Zonal Offices)}
    F --> G[Assistant Directors & Enforcement Officers]

Explanation: This organogram visually represents the hierarchical flow of authority within the Enforcement Directorate. The ED operates under the Department of Revenue within the Ministry of Finance. The Director of Enforcement is at the apex, assisted by Special Directors heading regional offices. These regional offices oversee various zonal offices, which in turn manage sub-zonal offices and the frontline enforcement officers.

3. Jurisdiction, Powers, and Key Acts

The Enforcement Directorate is a multidisciplinary organization mandated with the investigation of money laundering offenses and violations of foreign exchange laws. Its jurisdiction extends across the entire country, enabling it to investigate financial crimes with national and international ramifications.

The ED's primary mandate revolves around enforcing three key legislations:

A. The Prevention of Money Laundering Act, 2002 (PMLA)

The PMLA is a criminal law designed to combat money laundering and provide for the confiscation of property derived from or involved in money laundering. The ED is entrusted with the responsibility to enforce the provisions of the PMLA by:

• Investigation: Tracing assets derived from "proceeds of crime."
• Provisional Attachment: Provisionally attaching property believed to be "proceeds of crime." This provisional order must be confirmed by the Adjudicating Authority within 180 days.
• Prosecution: Ensuring the prosecution of offenders involved in money laundering.
• Confiscation: Facilitating the confiscation of tainted property by the Special Court.

Key Powers under PMLA:

• Search and Seizure: ED officers can conduct searches of premises and seize records or property if they suspect proceeds of crime are kept there. They can also break open locks if keys are unavailable.
• Arrest: The ED has the power to arrest individuals under Section 19 of the PMLA based on "reason to believe" that a person is guilty of a money laundering offense. However, the Supreme Court has clarified that the ED cannot arrest an accused under Section 19 after a Special Court has taken cognizance of the complaint. If custody is needed for further investigation, the ED must apply to the Special Court.
• Statements: Under Section 50 of the PMLA, the ED can summon any person for inquiry and record their statements. Unlike statements made to police officers, statements recorded by ED authorities are admissible as evidence in court.
• ECIR (Enforcement Case Information Report): The ED registers an ECIR, which is equivalent to an FIR, to initiate investigations. However, the ECIR is considered an "internal document" and is generally not provided to the accused, leading to criticism regarding transparency.
• Cognizance: The PMLA allows the ED to take cognizance of any offense under its wide-ranging schedule across the country, with or without the consent of state governments.

B. The Foreign Exchange Management Act, 1999 (FEMA)

FEMA is a civil law designed to facilitate external trade and payments and promote the orderly development and maintenance of the foreign exchange market in India. Under FEMA, the ED is responsible for:

• Investigation: Conducting investigations into suspected contraventions of foreign exchange laws and regulations.
• Adjudication: Adjudicating cases of FEMA violations and imposing penalties. Penalties can be up to three times the amount involved in the contravention.
• Intelligence: Collecting, developing, and disseminating intelligence related to FEMA violations, including "hawala" transactions, foreign exchange racketeering, and non-realization of export proceeds.

C. The Fugitive Economic Offenders Act, 2018 (FEOA)

The FEOA was enacted to deter economic offenders from evading the process of Indian law by fleeing the country. Under this Act, the ED is mandated to:

• Identify and Declare FEOs: Attach properties of fugitive economic offenders who have escaped from India, provided an arrest warrant has been issued against them for specified offenses exceeding ₹100 crore, and they refuse to return.
• Confiscation: Confiscate properties belonging to declared fugitive economic offenders and vest them in the Central Government, free of encumbrances.

D. Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, 1974 (COFEPOSA)

The ED also acts as a sponsoring agency under COFEPOSA, 1974, empowering it to sponsor cases of preventive detention concerning FEMA contraventions.

Constitutional Articles and ED's Powers

While no single constitutional article explicitly establishes the Enforcement Directorate, its powers and functions are rooted in the legislative competence of the Parliament under the Constitution of India, primarily concerning economic offenses and foreign exchange. The validity of PMLA and ED's powers under it have been extensively challenged and upheld by the Supreme Court.

• Article 20(3) - Protection against self-incrimination: This Article states that "No person accused of any offence shall be compelled to be a witness against himself." Accused individuals have argued that statements recorded by the ED under Section 50 of PMLA violate this right, asserting that ED officials act as police officers. However, the Supreme Court, in Vijay Madanlal Choudhary v. Union of India (2022), rejected this argument, holding that ED authorities are not police officers, and inquiries under Section 50 are not "investigations" in the strict sense for initiating prosecution, thus making the statements admissible.
• Article 21 - Right to life and personal liberty: The broad powers of arrest and asset attachment under PMLA have led to concerns about the curtailment of personal liberty. The Supreme Court, while upholding the PMLA's constitutional validity, has emphasized the need for "reasons to believe" for arrests and that arrests must not be arbitrary. The Fugitive Economic Offenders Act, 2018, which allows barring FEOs from filing or defending civil claims, has also raised concerns about potential violation of the right to access justice, which is considered part of Article 21.

4. Landmark Judgments and Case Laws

The ED's operational landscape has been significantly shaped by various judicial pronouncements, particularly from the Supreme Court, clarifying the scope of its powers and the interpretation of the laws it enforces.

A. Vijay Madanlal Choudhary v. Union of India (2022)

This is arguably the most significant judgment concerning the PMLA and the ED's powers. The Supreme Court extensively examined the constitutional validity of several provisions of the PMLA.

• Key Holdings:
  • Upholding PMLA: The Court upheld the constitutional validity of various provisions of the PMLA, including the powers of arrest, search, seizure, and attachment of property by the ED.
  • Statements to ED: It ruled that statements recorded by ED officials under Section 50 of PMLA are admissible in court and do not violate Article 20(3) (right against self-incrimination), stating that ED officers are not "police officers" within the meaning of the Code of Criminal Procedure.
  • ECIR Not an FIR: The Court held that the Enforcement Case Information Report (ECIR) is an internal document and not equivalent to an FIR, and thus, its non-disclosure to the accused does not vitiate the proceedings.
  • Reverse Burden of Proof: It upheld the provision that places the burden of proof on the accused to prove that the attached property is not proceeds of crime.

B. Recent Supreme Court Rulings on Arrest Powers

• Tarsem Lal v. Directorate of Enforcement, Jalandhar Zonal Office (May 16, 2024): The Supreme Court clarified that the ED cannot arrest an accused under Section 19 of the PMLA after a Special Court has taken cognizance of the complaint. If the ED seeks custody for further investigation, it must apply to the Special Court, which will decide based on the necessity of custodial interrogation. This ruling aims to prevent arbitrary arrests once the court has taken judicial notice of the case.
• Arvind Kejriwal Interim Bail (May 2024): While granting interim bail to Delhi Chief Minister Arvind Kejriwal in an excise policy case, the Supreme Court underscored that arrests under PMLA must not be arbitrary but based on valid "reasons to believe." This further emphasizes the judicial scrutiny over the ED's power of arrest.

C. P. Chidambaram v. Directorate of Enforcement (INX Media Case, 2019)

This high-profile case involved alleged financial irregularities and corruption. The Supreme Court's decisions in this matter often touched upon the ED's investigative powers, particularly regarding anticipatory bail in money laundering cases. The case highlighted the ED's significant role in investigating corruption involving high-profile individuals.

D. TASMAC v. Enforcement Directorate (Madras High Court, 2025)

In a notable recent ruling, the Madras High Court quashed attachment proceedings initiated by the ED against the Tamil Nadu State Marketing Corporation (TASMAC). The court emphasized the importance of due process and evidentiary rigor under the PMLA, stating that statutory corporations cannot be "roped into money laundering cases merely by association or suspicion," and strict adherence to procedural safeguards is indispensable. This case underscored the limits of executive power and the evidentiary threshold required for invoking PMLA provisions, particularly concerning the liability of government bodies.

Process of PMLA Investigation & Adjudication (Flowchart)

graph TD
    A[Information of Scheduled Offence (FIR/Charge sheet by other agencies)] --> B[ED Registers ECIR (Enforcement Case Information Report)]
    B --> C{Investigation by ED<br>(Summoning, Interrogation, Collection of Evidence)}
    C -- Reason to Believe Offence Committed --> D[Provisional Attachment of Property (Section 5 PMLA)]
    D --> E[Adjudicating Authority (AA) Receives Provisional Attachment Order]
    E -- AA confirms within 180 days --> F[Confirmed Attachment Order]
    F -- If Offender Apprehended & Chargesheeted --> G[ED Files Prosecution Complaint (Chargesheet) before Special Court]
    G --> H[Trial in Special Court (PMLA)]
    H -- Conviction --> I[Confiscation of Property by Special Court & Punishment]
    H -- Acquittal/Discharge --> J[Release of Attached Property]
    D -- If AA does not confirm in 180 days --> K[Provisional Attachment Lapses]
    C -- Insufficient Evidence / No Offence --> L[Case Closed by ED]
    G -- If Offender is Fugitive --> M[Application to Special Court under FEOA for Declaration as FEO & Confiscation]
    M --> N[Declaration as FEO & Confiscation of Property]

Explanation: This flowchart illustrates the typical process of an investigation under the PMLA. It begins with the ED receiving information about a scheduled offense (often from another agency). The ED then registers an ECIR and conducts its investigation. If sufficient evidence is found, property linked to the crime is provisionally attached. This provisional attachment must be confirmed by an Adjudicating Authority. Subsequently, if a case is established, the ED files a prosecution complaint before a Special Court, leading to trial, and potentially conviction, confiscation, and punishment. The flowchart also accounts for cases where the provisional attachment lapses, the case is closed, or the offender is declared a Fugitive Economic Offender.

5. Contemporary Developments and Impact

The ED's role in India's legal and economic framework has become increasingly prominent.

A. Increased Enforcement and Conviction Rate

As of January 31, 2023, the ED had registered 5,906 ECIRs and arrested 513 persons. While the number of cases where trials have been completed is relatively low, the conviction rate in those completed trials is high. In July 2023, data shared in Parliament revealed that out of 31 completed trials under PMLA in the preceding nine years, 29 resulted in convictions, yielding a conviction rate of 93.54%. The agency has also attached assets worth over ₹99 crore under PMLA in the last eight years. Total penalty levied through investigation and adjudication of FEMA cases during the 2024-25 fiscal was Rs 5,238 crore.

B. Inter-Agency Cooperation

The ED works closely with other law enforcement agencies like the Central Bureau of Investigation (CBI), Income Tax Department (ITD), and various intelligence agencies. In November 2022, the government expanded the list of agencies with which the ED can share information about economic offenders, increasing it from 10 to 25. This includes agencies like the National Investigation Agency (NIA), Serious Fraud Investigation Office (SFIO), state police departments, and the Competition Commission of India (CCI), among others. This enhanced information sharing aims to expedite the process of bringing law-breakers to justice. The Central Economic Intelligence Bureau (CEIB) acts as a nodal agency for coordinating economic intelligence and information sharing among various law enforcement agencies. The Economic Intelligence Council (EIC), headed by the Union Finance Minister, serves as the apex forum for inter-agency coordination on economic security.

C. Challenges and Criticisms

Despite its vital role, the ED has faced significant criticism and controversies:

• Allegations of Political Misuse: The ED has frequently been accused of selective enforcement and being used as a tool to target political opponents of the ruling government. High-profile arrests of politicians and public figures have intensified debates about its independence and impartiality.
• Overbreadth of PMLA Schedule: Critics argue that the schedule of offenses under PMLA is "extremely overbroad," including even "ordinary" crimes, which was not the original intent of a law meant to combat money laundering stemming from narcotics trade. This has led to allegations of the ED extending its jurisdiction beyond its intended scope.
• Lack of Transparency: The non-disclosure of the ECIR to the accused and the lack of clarity regarding the ED's selection of cases for investigation raise concerns about transparency and fairness.
• Low Conviction Rate vs. High Arrests/Attachments: While the conviction rate in completed trials is high, the overall number of convictions compared to the thousands of cases registered and arrests made under PMLA has been a point of criticism, with a large number of cases awaiting trial.
• Wide Powers: The ED possesses certain powers, such as the admissibility of statements made to its officers in court and the non-bailable nature of PMLA offenses, which are often cited as being more stringent than those of other agencies like the CBI.

Comparison with Other Agencies

It's important to understand the distinct roles of the ED in comparison to other prominent investigative agencies in India.

Explanation: This comparison table highlights the distinct focus, legislative backing, and operational powers of the ED vis-à-vis other key investigative and enforcement agencies in India. While there can be collaboration between these agencies, their core mandates and legal frameworks differ.

Conclusion: Balancing Power and Accountability

The Enforcement Directorate has emerged as a formidable force in India's battle against economic crimes, playing a critical role in enforcing crucial laws like PMLA, FEMA, and FEOA. Its robust powers of investigation, arrest, and asset attachment are indispensable in a world where financial illicit activities transcend national borders. The significant conviction rates in adjudicated PMLA cases underscore its effectiveness.

However, the ED's expansive powers, coupled with concerns about transparency, potential political misuse, and the broad scope of PMLA, necessitate ongoing scrutiny and reforms. Debates surrounding the disclosure of ECIRs, the balance between investigation and individual liberties, and the need for greater accountability are crucial for strengthening public trust in this vital institution. As India continues its economic growth and integration into the global financial system, a powerful yet accountable Enforcement Directorate will be essential for maintaining financial integrity and ensuring justice against those who undermine the nation's economic security.

Interactive Q&A / Practice Exercises

To test your understanding of the Enforcement Directorate, its structure, jurisdiction, and impact, attempt the following questions.

1. Multiple-Choice Questions (MCQs)

Q1. The Enforcement Directorate (ED) primarily operates under which Ministry of the Government of India? a) Ministry of Home Affairs b) Ministry of Law and Justice c) Ministry of Finance d) Ministry of Corporate Affairs

Q2. Which of the following Acts is NOT primarily enforced by the Enforcement Directorate? a) Prevention of Money Laundering Act, 2002 (PMLA) b) Foreign Exchange Management Act, 1999 (FEMA) c) Fugitive Economic Offenders Act, 2018 (FEOA) d) Income Tax Act, 1961

Q3. As per a recent Supreme Court ruling, the Enforcement Directorate CANNOT arrest an accused under Section 19 of the PMLA if: a) The accused has obtained anticipatory bail. b) A Special Court has taken cognizance of the complaint. c) The value of the proceeds of crime is below ₹1 crore. d) The investigation is completed.

Q4. Statements recorded by an Enforcement Directorate officer under Section 50 of the PMLA are: a) Not admissible as evidence in court. b) Admissible as evidence in court, similar to a police statement. c) Admissible as evidence in court, but ED officers are not considered police officers. d) Only admissible if corroborated by other evidence.

Q5. The Enforcement Case Information Report (ECIR) registered by the ED is generally considered: a) A public document, accessible to all. b) An internal document, not disclosed to the accused. c) Equivalent to a First Information Report (FIR). d) A report filed directly in the Special Court for trial.

2. Scenario-Based Questions

Scenario 1: A prominent businessman, Mr. Sharma, is accused of diverting funds abroad through shell companies, allegedly to evade taxes and hide illicit wealth. The Income Tax Department has initiated an investigation and found significant discrepancies.

Question: What role would the Enforcement Directorate (ED) likely play in this scenario, and under which specific Act(s) would it primarily act? Explain the process the ED might follow.

Scenario 2: A former minister, Ms. Reddy, is being investigated by the ED under the PMLA. She argues that the ED's power to record her statements and use them as evidence against her violates her fundamental right against self-incrimination under Article 20(3) of the Constitution.

Question: Based on Supreme Court judgments, how would a court likely respond to Ms. Reddy's argument regarding Article 20(3) and the admissibility of her statements to the ED?

3. Match the Following

Match the following terms/Acts with their primary functions or characteristics:

4. Chronological Order Exercise

Arrange the following events in the historical evolution of the Enforcement Directorate in chronological order, from earliest to latest:

a) ED entrusted with enforcement of Fugitive Economic Offenders Act (FEOA). b) "Enforcement Unit" established within the Department of Economic Affairs. c) "Enforcement Unit" renamed "Enforcement Directorate." d) ED entrusted with enforcement of Prevention of Money Laundering Act (PMLA). e) Administrative control of ED transferred to the Department of Revenue.

5. Diagram-Based Question (Refer to the "Organogram of Enforcement Directorate Structure" above)

Question: Identify the head of a Regional Office and a Zonal Office in the Enforcement Directorate's hierarchical structure, as depicted in the organogram.

Answer Explanations

1. Multiple-Choice Questions (MCQs)

Q1. The Enforcement Directorate (ED) primarily operates under which Ministry of the Government of India? a) Ministry of Home Affairs b) Ministry of Law and Justice c) Ministry of Finance d) Ministry of Corporate Affairs

• Explanation: The ED functions under the Department of Revenue, which is part of the Ministry of Finance.

Q2. Which of the following Acts is NOT primarily enforced by the Enforcement Directorate? a) Prevention of Money Laundering Act, 2002 (PMLA) b) Foreign Exchange Management Act, 1999 (FEMA) c) Fugitive Economic Offenders Act, 2018 (FEOA) d) Income Tax Act, 1961

• Explanation: While the ED investigates financial crimes that might have a tax evasion angle, the Income Tax Act, 1961, is primarily enforced by the Income Tax Department. The ED's core mandates are PMLA, FEMA, and FEOA.

Q3. As per a recent Supreme Court ruling, the Enforcement Directorate CANNOT arrest an accused under Section 19 of the PMLA if: a) The accused has obtained anticipatory bail. b) A Special Court has taken cognizance of the complaint. c) The value of the proceeds of crime is below ₹1 crore. d) The investigation is completed.

• Explanation: The Supreme Court, in Tarsem Lal v. Directorate of Enforcement (May 2024), ruled that the ED cannot arrest an accused under Section 19 of PMLA after a Special Court has taken cognizance of the complaint.

Q4. Statements recorded by an Enforcement Directorate officer under Section 50 of the PMLA are: a) Not admissible as evidence in court. b) Admissible as evidence in court, similar to a police statement. c) Admissible as evidence in court, but ED officers are not considered police officers. d) Only admissible if corroborated by other evidence.

• Explanation: The Supreme Court in Vijay Madanlal Choudhary v. Union of India (2022) held that ED officers are not "police officers" and thus, statements recorded by them under Section 50 of PMLA are admissible in court.

Q5. The Enforcement Case Information Report (ECIR) registered by the ED is generally considered: a) A public document, accessible to all. b) An internal document, not disclosed to the accused. c) Equivalent to a First Information Report (FIR). d) A report filed directly in the Special Court for trial.

• Explanation: The ECIR is treated as an internal document of the ED and is typically not provided to the accused. While it serves a similar purpose to an FIR for initiating investigation, the Supreme Court has clarified it is not equivalent to an FIR in all respects.

2. Scenario-Based Questions

Scenario 1 Answer: In this scenario, the Enforcement Directorate (ED) would play a crucial role in investigating the money laundering aspect of the alleged crime. While the Income Tax Department deals with tax evasion, the ED's mandate focuses on the "proceeds of crime" and their laundering.

• Primary Act(s): The ED would primarily act under the Prevention of Money Laundering Act, 2002 (PMLA). If the diversion of funds abroad involves violations of foreign exchange regulations, the ED would also investigate under the Foreign Exchange Management Act, 1999 (FEMA).
• Process ED might follow:
  1. Receipt of Information: The ED would likely receive information about the alleged illicit funds and their diversion from the Income Tax Department (or other intelligence/investigative agencies). The recent changes in PMLA allow ED to share information with many more agencies, facilitating such referrals.
  2. Registration of ECIR: Based on the information, the ED would register an Enforcement Case Information Report (ECIR) to initiate its investigation.
  3. Investigation: ED officials would conduct a thorough investigation, which may involve:
     • Summoning Mr. Sharma and other individuals for questioning under Section 50 of PMLA.
     • Collecting evidence related to the shell companies, bank transactions, and foreign transfers.
     • Conducting searches and seizures of relevant documents, electronic devices, and properties suspected to be proceeds of crime.
  4. Provisional Attachment: If the ED has "reason to believe" that properties (movable or immovable) are "proceeds of crime" (derived from the alleged illicit activities), it can provisionally attach these properties under Section 5 of PMLA.
  5. Adjudication: The provisional attachment order would then be sent to the Adjudicating Authority, which must confirm the attachment within 180 days.
  6. Prosecution Complaint: If the investigation reveals sufficient evidence of money laundering, the ED would file a prosecution complaint (chargesheet) against Mr. Sharma and others involved before a Special Court designated under PMLA.
  7. Trial and Confiscation: The Special Court would then proceed with the trial. If Mr. Sharma is convicted, the properties attached as proceeds of crime would be confiscated to the Central Government, and he would face punishment as per the PMLA.

Scenario 2 Answer: A court would likely reject Ms. Reddy's argument regarding the violation of Article 20(3) of the Constitution and the inadmissibility of her statements to the ED, based on the landmark Supreme Court judgment in Vijay Madanlal Choudhary v. Union of India (2022).

• Key Judicial Precedent: In this crucial judgment, the Supreme Court unequivocally held that officers of the Enforcement Directorate, when conducting inquiries under Section 50 of the PMLA, are not considered "police officers" within the meaning of the Code of Criminal Procedure.
• Admissibility of Statements: Consequently, statements recorded by ED officials during such inquiries are admissible as evidence in court.
• No Violation of Article 20(3): The Court further clarified that because ED officers are not deemed "police officers," compelling a person to give a statement to them does not amount to compelling them to be a "witness against himself" in violation of Article 20(3). The protection under Article 20(3) typically applies to statements made to police officers that could lead to self-incrimination in a criminal trial initiated by the police.
• Nature of ED Proceedings: The Supreme Court emphasized that an inquiry under Section 50 of PMLA is not an "investigation" in the strict sense for initiating prosecution but rather a process of gathering information for the purpose of the PMLA.

Therefore, Ms. Reddy's statements recorded by the ED would likely be admissible, and her constitutional argument under Article 20(3) would not stand based on the current interpretation by the Supreme Court.

3. Match the Following

1. Prevention of Money Laundering Act (PMLA) - D. Criminal law to combat illicit funds and confiscate proceeds of crime
2. Foreign Exchange Management Act (FEMA) - A. Civil law for foreign exchange management
3. Fugitive Economic Offenders Act (FEOA) - B. Law to deal with offenders fleeing India
4. Economic Intelligence Council - C. Apex forum for inter-agency economic intelligence coordination

4. Chronological Order Exercise

The correct chronological order is:

1. b) "Enforcement Unit" established within the Department of Economic Affairs. (1956)
2. c) "Enforcement Unit" renamed "Enforcement Directorate." (1957)
3. e) Administrative control of ED transferred to the Department of Revenue. (1960)
4. d) ED entrusted with enforcement of Prevention of Money Laundering Act (PMLA). (2005)
5. a) ED entrusted with enforcement of Fugitive Economic Offenders Act (FEOA). (2018)

5. Diagram-Based Question

Based on the "Organogram of Enforcement Directorate Structure":

• The head of a Regional Office is a Special Director of Enforcement.
• The head of a Zonal Office is a Joint Director (as per the Organogram, which simplifies the typical structure showing Joint Directors heading zones, though search results mention Deputy Directors also heading zonal offices).

(Self-correction: While the search results mention Joint Directors for Regional Offices and Deputy Directors for Zonal Offices, the provided organogram explicitly uses "Joint Directors" for Zonal Offices. For the sake of consistency with the visual, I will use "Joint Directors" for Zonal Offices as per the diagram. However, it's important to note the nuance from search results indicating Deputy Directors also head Zonal Offices and Assistant Directors head sub-zonal offices.)

Revised answer for Diagram-Based Question:

• The head of a Regional Office is a Special Director of Enforcement.
• The head of a Zonal Office is a Joint Director.

Recommended Books

You can explore these highly recommended resources for a deeper understanding.

• Indian Polity (English) by M Laxmikanth for UPSC CSE 2025 | 7th edition (latest) | Civil Services Exam - Prelims, Mains and Interview | State PSCs exams/ PCS exams - by M Laxmikanth
• Oswaal NCERT One For All Book for UPSC & State PSCs | Indian Polity Classes 6-12 - by Oswaal Editorial Board
• Bharat Ki Rajvyavastha (भारत की राजव्यवस्था) - M Laxmikanth for UPSC CSE