The recent showdown between West Bengal Chief Minister Mamata Banerjee and the Enforcement Directorate (ED) during a raid in Kolkata has raised troubling questions about the state of rule of law in the country.

The ED alleges that Mamata Banerjee obstructed its search by physically removing documents and electronic devices from the raid sites.

Banerjee, in turn, denies any wrongdoing, claiming the ED was seizing unrelated political data (including her party’s internal election strategy files) under the guise of investigation.

This unprecedented and unfortunate confrontation, where a state leader purportedly intervened in an ongoing money-laundering investigation, has no winners on the face of it. 

The public, of course, loses.

No one is above the law, and obstructing an official search can attract legal penalties.

At the same time, the episode has become a flashpoint for examining whether the law itself, specifically the Prevention of Money Laundering Act (PMLA), arms the ED with overbroad powers that are prone to misuse.

This column focuses solely on those legal dimensions – away from partisan politics – to understand how PMLA’s design might enable – what can be termed – power without accountability, and why reforms are urgently needed.

A Raid and a Constitutional Row

The facts are contested but – broadly – this is what seems to be the factual background.

On January 8, ED officers conducted search and seizure operations at the Kolkata office of I-PAC (a political consultancy) and the home of its co-founder, as part of a money-laundering probe into alleged coal smuggling and hawala transactions. During the searches, it is alleged that Mamata Banerjee arrived with state police, entering the premises.

According to ED’s submissions in court, the Chief Minister’s team removed documents and devices that ED considered potential evidence.

The agency labeled this a blatant obstruction of its statutory powers under PMLA. Banerjee, however, has forcefully countered that ED exceeded its remit: she asserts that no “proceeds of crime” were on the premises, only Trinamool Congress party materials which she “took back” to prevent their misuse. She called the raid as “unconstitutional and politically motivated”, alleging the central agency was gathering confidential party data unrelated to the case.

Both sides have now approached the Calcutta High Court, and the matter could even reach the Supreme Court, considering its gravity.

This tussle also acquired a federal flashpoint.

West Bengal’s Governor publicly warned that if the Chief Minister indeed impeded an ED officer, it would be a serious constitutional breach of her duties. Preventing or intimidating a public servant from performing lawful functions is an offense under the new Bharatiya Nyaya Sanhita (revised penal code), he noted. A state constitutional authority is expected to uphold the law, not hinder it.

Conversely, the Supreme Court has lately been critical of the ED’s conduct in various cases. In May 2025, a bench led by the Chief Justice admonished the ED for “crossing all limits” and “totally violating the federal structure of the country” by its actions in an investigation in Tamil Nadu.

In other words, there is growing concern that central agencies might be misused against opposition-ruled states, undermining the spirit of federalism.

Thus, the Mamata–ED episode gives rise to a two-edged legal dilemma: a state possibly defying a lawful probe, and a central law (PMLA) that may itself enable executive overreach.

To forge a true rule-of-law path forward, it’s essential to scrutinize the legal provisions at play here – especially the extraordinary search powers that PMLA grants to the ED.

Search Without Warrant: PMLA’s Design Problem

At the heart of this conflict is Section 17 of the PMLA, which governs ED’s search and seizure powers. Under Section 17, an ED officer may enter and search any premises if he has “reason to believe” that it contains proceeds of crime or related records.

Crucially, the law does not require a prior warrant from any court or a judicial body. The officer authorizes himself to search, merely by internally recording those reasons to believe.

In practice, this means the ED can raid first and justify later.

The only form of oversight is largely ex-post facto: the officer must send a copy of the recorded “reasons to believe” and a list of what was seized to an adjudicating authority, in a sealed envelope, after the search. But this happens without any immediate, neutral screening of whether the search was justified or appropriately targeted, in the first place.

For the person or organisation whose home or office is searched, there is no opportunity to contest the raid beforehand – unlike the usual process of obtaining a search warrant from a magistrate under general criminal law. (at least, in theory, if not in practice).

This stands in stark contrast to standard criminal procedure in India and worldwide. Under the Code of Criminal Procedure (CrPC), searches are ordinarily supposed to be conducted with a judicial warrant (issued by a magistrate on an application by investigating officers) except in certain urgent cases.

For instance, CrPC Sections 93–94 empower courts to issue search warrants for specific premises and items, and even when police conduct a search without a warrant due to urgency, they must record reasons and later report to a magistrate immediately.

These procedural guardrails reflect a fundamental principle: searches are a serious invasion of privacy and property, so independent oversight is needed to prevent fishing expeditions.

Indeed, most jurisdictions insist on a neutral authority reviewing search requests in some form. As an international judicial guide notes, “many countries require a judge or magistrate to review law enforcement search requests”, precisely because allowing searches “without procedural guardrails” invites abuse.

Even where prosecutors can authorize searches, or in narrow exceptions like exigent circumstances, the prevailing norm is to limit warrantless searches and require specificity in warrants (the what, where, and why) to protect against arbitrary intrusions.

By design, the PMLA flips this norm on its head. The ED operates without needing to seek any go-ahead from a court for searches or seizures. The law trusts the agency to police itself: record its “reason to believe” in writing, then raid with virtually the same powers as a search warrant (including breaking locks and seizing assets).

The only check – sealing the reasons in an envelope for the adjudicating authority – is effectively a paper formality and hardly a good enough safeguard. It does not give the target of the search any immediate relief or a chance to contest the grounds.

The adjudicating authority is not asked to approve the raid beforehand; it merely keeps the sealed reasons on file. In theory, if the matter later comes to court, a judge could review whether the ED’s reasons were sufficient.

But by then, the damage may already be done – documents taken, reputation tarnished, business disrupted. If it turns out the ED overreached or found nothing incriminating, there’s little that can be done. Even a subsequent victory in court cannot undo the privacy invasion.

This lack of remedy is stark but not unprecedented. The European Court of Human Rights found Italy in violation of the right to privacy when its law failed to provide any judicial review either before or after certain searches, calling such unchecked searches “arbitrary”.

The PMLA scheme risks similar arbitrariness – prior magisterial or court oversight is entirely absent at the crucial moment of intrusion.

Petitioners challenging PMLA before the Supreme Court argued that this executive-only supervision “is against the rule of law”, because judicial or independent approval is a hallmark of fair process. Nonetheless, in a contentious 2022 judgment, the Supreme Court upheld Section 17 as constitutional, reasoning that PMLA has “inbuilt safeguards” since only senior officers can authorize searches and they must record their reasoning.

That rationale offers little solace to those at the receiving end of sweeping raids, as illustrated by the Banerjee-I-PAC incident: ED agents arrived at 6 AM and, according to the Chief Minister, seized troves of unrelated data – laptops, phones, voter lists, campaign strategies – having nothing to do with the alleged crime.

If true, this was precisely the kind of “fishing operation” that a tailored search warrant (listing what evidence to look for) is meant to prevent.

Without prior vetting, PMLA searches can become a carte blanche, and officials may grab anything in sight, leaving the target to later argue in court that it was beyond scope – an arduous and often Pyrrhic process.

The design problem, then, is clear: PMLA hands the ED a hammer with few checks on how it’s swung. An agency can search almost at will, constrained only by its own subjective “reasons to believe”, and any accountability comes much later, if at all. This is a recipe for harassment and potential abuse – especially when the agency’s powers could be “weaponised” for political ends.

It is telling that despite thousands of raids, the ED’s conviction rate under PMLA is abysmally low. While a low conviction rate alone doesn’t prove malice – complex financial crimes are hard to prosecute – it does raise an eyebrow: are many PMLA searches and arrests based on flimsy grounds that never hold up in court?

Misuse of search powers inflicts real harm – reputational ruin, chilled business activity, personal distress – that no court order can later fully undo.

This is why democratic legal systems insist that power be coupled with accountability. Unfortunately, PMLA’s architecture skews heavily in favor of power.

Other due-process problems with the PMLA

Section 17 is just one part of a matrix of extraordinary powers given to the ED under PMLA. The law, especially after amendments over the years, creates a process that is heavily weighted against the individual. Some of the most controversial aspects include:

• Difficult Bail and Reverse Presumption: PMLA imposes stringent bail conditions under Section 45. An accused does not enjoy the usual presumption of innocence; instead, to get bail, one must prima facie prove that one is not guilty of money laundering. Courts cannot grant bail unless satisfied the accused is likely innocent and will not commit any further offense. These twin conditions effectively reverse the burden of proof at the bail stage. A 2017 Supreme Court ruling struck down this provision as violating fundamental rights, but Parliament reintroduced a facially tweaked version in 2018, and the Supreme Court upheld it in 2022. The result: bail under PMLA is exceptionally hard, leading to long pre-trial detentions – effectively punishment without conviction.
• Burden to Prove One’s Innocence: Even at trial, Section 24 of PMLA shifts the onus onto the accused. If one is charged with money laundering, the law presumes the questionable funds or property are “proceeds of crime” and thus illicit. It is then on the accused to prove that the property is untainted. This deviates from the bedrock criminal law principle that the State must prove guilt beyond reasonable doubt. Such reverse burden clauses exist in some special laws (e.g. corruption cases), but they are always a matter of concern for rights – here, it means anyone ensnared by PMLA starts with a presumption of guilt, an uphill battle to clear their name. The problem compounds when the prosecution usually produces a one-sided narrative at the stage of charge/discharge and leaves out crucial documents from the chargesheet, which, disappointingly, as per latest law (see Sarla Gupta, 2025), cannot ordinarily be looked-into at the stage of charge.
• Self-Incrimination and Statements to ED: Perhaps the most striking departure from ordinary procedure is Section 50 of PMLA, which empowers ED officers to summon individuals and record their statements under oath. These statements are admissible as evidence in court, even if they amount to confessions. How is this possible? Because ED officials are not considered “police officers” under PMLA. Therefore, the safeguard of Section 25 of the Evidence Act – which renders confessions to police inadmissible – doesn’t apply. In plain terms, if ED interrogators compel a suspect to answer questions (refusal can invite jail for “non-cooperation”), those answers can be used to prosecute the suspect. This is a serious inroad into the constitutional right against self-incrimination. Defense lawyers argue it allows coercive tactics and undermines the voluntary nature of statements. In fact, the very setting of ED interrogations lacks safeguards – unlike police, ED is not bound to honor the right to counsel during questioning or other CrPC protections.
• Opaque Investigations (ECIR and ED Manual): A person booked by the ED often does not even know the full case against them for a long time. The ED’s practice is to record an Enforcement Case Information Report (ECIR) – analogous to an FIR – when it begins investigation, but not to furnish it to the accused. The agency treats the ECIR as an “internal document”, and the Supreme Court accepted this stance, holding that providing a copy of the ECIR is not mandatory as long as the accused is informed of the general allegations at arrest. This lack of transparency leaves the accused guessing about the specifics of the charge, which hampers the ability to defend oneself. In the case of the Kolkata raids, for example, it’s unclear if I-PAC or TMC functionaries were even told clearly which predicate offense or transactions were under probe – Banerjee claims the ED gave no clarity on why party data was being seized. Moreover, the ED’s own operating guidelines (the “ED Manual”) are secret. The 2022 Supreme Court judgment noted that the ED Manual is an internal document not meant for publication. Thus, neither the rules governing ED’s procedures nor the summary of allegations (ECIR) are available to the persons being investigated. This opacity is fertile ground for arbitrary or selective use of ED powers. As one legal commentator observed, “the ED treats itself as an exception to the principles… ordinarily followed” – it doesn’t register public FIRs, doesn’t maintain a transparent case diary, and conducts inquiries behind a veil. All of this is legally permitted under PMLA’s framework as it stands.

In sum, the PMLA process tilts heavily in the enforcement agency’s favor – from pre-trial asset freezes and prolonged custody to burdens of proof and limited disclosure. Little surprise that various petitions (by individuals across the political and business spectrum) have challenged these provisions. While the Supreme Court upheld most of them for now, a review is underway on some points including: the twin bail conditions and the non-supply of the ECIR. Even Justices of the top court have voiced disquiet in hearings, admonishing the ED that it “cannot act arbitrarily” and must work within the law. The outcry is not about undermining India’s fight against money laundering, which is a legitimate goal, but about defending the rule of law. No agency in a democracy should have unchecked powers, because unchecked power will eventually be misused, no matter how noble the cause.

Restoring the Balance: The Way Forward

The Mamata Banerjee vs ED episode should serve as a wake-up call to rebalance PMLA’s mechanisms. This is not about shielding the corrupt or allowing politicians to evade scrutiny – it is about ensuring that anti-money-laundering efforts do not themselves trample legal safeguards and citizens’ rights. There are several reforms worth considering:

• Introduce Judicial Oversight for Searches: Section 17 of PMLA needs an amendment. The ED should generally be required to obtain a search warrant from a special PMLA court or a magistrate before conducting searches, except in truly exigent circumstances. An independent authority’s prior review of the “reasons to believe” would filter out exploratory raids, what we call ‘fishing expeditions and roving enquiries’. Even in urgent cases where advance warrant isn’t feasible, the ED could be mandated to get a ratification from a court (not adjudicating authority) within a very short window (say 24–48 hours) of the search, to ensure the action was justified. This is analogous to practices in anti-terror or anti-drug operations in many countries, where warrantless searches must be later justified to a court. Having a judge (or an independent “search authorization board”) evaluate ED’s grounds would greatly curb routine fishing expeditions. It would force the agency to specifically identify the evidence or documents being sought, and narrowly target the search scope, rather than casting a wide net. Notably, most warrant applications worldwide must “set forth particularized information about the location to be searched and the evidence to be seized” – PMLA should be no different. An independent filter will also restore public confidence that searches aren’t politically motivated but based on solid facts. Also, the Courts would, while deciding those applications, could be trusted to make these intrusions narrow and carefully tailored. For instance, if copies, backups would do in a case, why seize the computers themselves and bring, prematurely and punitively, bring an organisation’s work to a grinding halt.
• Require Greater Specificity and Accountability in Seizures: Hand in hand with warrant oversight, the ED’s search teams should be legally bound to seize only items directly relevant to the alleged offense. If during a search they encounter unrelated confidential data (for example, political strategy files or personal information), they should not be allowed to cart everything away “just in case.” One practical reform could be to empower an independent overseer (perhaps a judge or a bench of judges) to supervise or review extensive seizures, especially of digital devices and data, to prevent misuse of irrelevant information. Additionally, if a court later finds that materials were seized beyond the scope of investigation (or on a patently insufficient basis), the law should provide for return of such property forthwith and possibly compensation for the aggrieved party’s legal costs. This will deter overzealous officers from straying beyond the mandate.
• Improve Transparency – ECIR and Manual: At minimum, the ECIR (the origin of the case) should be provided to the accused at the stage of summons or arrest. The Calcutta High Court recently directed ED to at least mention the ECIR number and predicate offense in its summons, highlighting how basic this information is to a fair process. Knowing the exact accusations allows the person to seek legal redress (for instance, quashing proceedings if no scheduled offense exists). Furthermore, while operational details can remain confidential, the broad contents of the ED Manual should be public – e.g. the standard operating procedures for searches, seizures, summons, etc. Sunlight is the best disinfectant: transparency will dispel the aura of arbitrary functioning. If the manual contains nothing improper, there is no harm in publishing it; if it does, that is all the more reason to bring it in line with constitutional norms.
• Safeguard Against Self-Incrimination: The legislature or courts should re-examine Section 50 to realign it with Article 20(3) of the Constitution (right against self-incrimination). One reform could be to allow the presence of a lawyer during ED questioning, or at least recording of the interrogation to prevent coercion – rights that are recognized in criminal investigations. Another could be to stipulate that any involuntary or coerced statement to ED is inadmissible (similar to police confessions). While the Supreme Court astonishingly held that compelled statements to ED are acceptable since ED is “not police”, this formalistic view ignores the reality that ED investigations are criminal proceedings in essence, and more strigent – in fact – than ordinary criminal cases. They should be subject to the same fairness standards. A balance can be struck: ED can gather financial information, but individuals must retain the right to remain silent on incriminating questions without fear of incarceration for “non-cooperation.”
• Periodic Judicial Review of Prosecution Progress: To avoid situations where people languish under PMLA cases indefinitely (with attached properties and restrictive bail), there could be a mechanism of periodic review by a court of whether the ED’s investigation is making bona fide progress or being used to harass. For instance, if after a certain time no charge sheet is filed, the court could call for an explanation. This is akin to how detention laws have review boards. In money-laundering cases, timely prosecution is crucial; otherwise, the sword of PMLA hanging over individuals becomes a tool of intimidation rather than justice.

Finally, all stakeholders must remember that the ends do not justify the means in a constitutional democracy. Yes, money laundering is a serious menace, often intertwined with corruption and crime, and India absolutely needs a strong law to combat it.

But that law must operate within a framework of accountability. When an agency wields powers that cut across state boundaries (as the ED does, being a central agency operating in all states), it is even more important to have checks in place – lest it be seen as an instrument of political coercion by the Union.

The federal tensions evident in West Bengal today could escalate elsewhere if states feel their officials and citizens are being unfairly targeted. The remedy is not for state authorities to physically block raids (that is plainly illegal), but for the law to institute proper safeguards so that raids are perceived as legitimate and based on evidence.

In conclusion, the Mamata Banerjee–ED confrontation should not be viewed narrowly as an act of defiance by a regional leader or an assertion of authority by a central agency.

It is symptomatic of a deeper rule-of-law strain in India’s governance. PMLA, in its current form, tilts the scales far towards enforcement might, at the cost of individual rights and federal comity.

 Rebalancing that law is in everyone’s interest – to ensure that no leader (or common citizen, for that matter) ever feels compelled to snatch back documents during a raid, and that no ED officer ever “crosses the limits” under the assumption that the law empowers them to do so.

It’s time to restore that framework in the context of PMLA. Only then will India’s fight against money laundering be both effective and just, commanding the confidence of all sides in our great federal polity.