Supreme Court Blocks ED from Accessing Seized Digital Devices

Why in News?

In a pivotal ruling, the Supreme Court has barred the Enforcement Directorate (ED) from accessing or copying data from electronic devices seized during raids involving Santiago Martin, dubbed the “lottery king,” along with his relatives and employees. This decision highlights the importance of protecting fundamental rights, including privacy, and could shape future protocols for handling digital device seizures.

What is the Enforcement Directorate (ED)?

Background

The ED traces its origins to 1956 when the “Enforcement Unit” was established under the Department of Economic Affairs to address violations of exchange control laws under the Foreign Exchange Regulation Act, 1947.

• Renamed the Enforcement Directorate in 1957, it came under the Department of Revenue in 1960.

About

The ED operates as a specialized financial investigation agency under the Department of Revenue, Ministry of Finance. It enforces:

1. Foreign Exchange Management Act, 1999 (FEMA) – A civil law.
2. Prevention of Money Laundering Act, 2002 (PMLA) – A criminal law.

• Headquarters: New Delhi.
• Governing Law: Central Vigilance Commission (CVC) Act, 2003.

Composition

• Staffed by officers from the Indian Revenue Service, Indian Police Service, and Indian Administrative Service, alongside its cadre officers.
• Headed by the Director of Enforcement, appointed by the Central Government with a secure two-year tenure under the CVC Act, 2003.

Case Background

ED’s Operation

• November Raids: Conducted at 22 locations across six states based on a Meghalaya Police complaint.
• Allegations: Future Gaming and Hotel Services Pvt Ltd was accused of monopolizing Meghalaya’s lottery business illegally.
• Findings: ₹12.41 crore in cash was seized.

Future Gaming’s Political Contributions

• Largest purchaser of electoral bonds, totaling ₹1,368 crore (2019–2024).
• Donations across parties:
  • Trinamool Congress: ₹542 crore
  • DMK: ₹503 crore
  • YSR Congress: ₹154 crore
  • BJP: ₹100 crore

Supreme Court’s Order

Content and Directives

• A two-page order by Justices Abhay S. Oka and Pankaj Mithal restrained the ED from accessing or copying data from devices seized from Santiago Martin and his associates.
• Stayed summons under PMLA for individuals to appear for data extraction.
• Ordered the case to be heard with similar cases, including petitions by Amazon India and Newsclick.

Petitioners’ Argument

• Claimed violations of privacy and constitutional rights due to unchecked access to sensitive personal and business data.
• Highlighted the lack of safeguards to prevent misuse by investigative agencies.

Implications for ED Investigations

ED’s Response

• Senior officials deemed the SC’s decision “unprecedented” but stated it would not affect ongoing investigations, citing other evidence and property attachments worth ₹622 crore.
• Reaffirmed adherence to CBI guidelines for handling digital evidence.

Legal Implications

• Lawyers, including former Attorney General Mukul Rohatgi, stressed privacy concerns and the absence of defined protocols.
• This ruling may set a precedent for protecting sensitive data and upholding constitutional safeguards against self-incrimination.

Broader Concerns

1. Nature of Seized Devices
   • Seized items included 17 mobile phones, hard disks, pen drives, and email backups containing confidential financial, medical, and business data.
2. Tax Compliance
   • Future Gaming reported paying ₹28,205 crore in GST for its state lottery operations, emphasizing its compliance.
3. Call for Guidelines
   • Advocated for clear protocols to balance investigative needs and privacy rights during digital device seizures.

Conclusion

The Supreme Court’s directive underscores the critical need to protect digital privacy in legal investigations. As this case unfolds, it could redefine standards for balancing law enforcement objectives with constitutional rights, especially in an increasingly digital age.