The Supreme Court Thursday extended the tenure of Enforcement Directorate chief Sanjay Kumar Mishra till September 15 midnight in larger "public and national interest" after the Centre asserted his continuity is necessary in view of the ongoing FATF peer review and attempts by India's neighbours to ensure the country falls in the grey list.

The top court, which initially made a sharp observation, asking "are we not giving a picture that there is no other person and the entire department is full of incompetent people," later relented and accepted the Centre's request for extending Mishra's tenure but for a period that is a month less than what it had sought.

The Centre was seeking an extension for Mishra till October 15 from the earlier July 31 deadline set by the top court.

A bench of Justices B R Gavai, Vikram Nath and Sanjay Karol said it was granting the extension in "larger public and national interest" but Mishra will cease to remain ED chief from the midnight of September 15.

"We find that in ordinary circumstances, such an application could not have been entertained. Taking into consideration the larger public interest, we are inclined to permit respondent number-2 (Sanjay Kumar Mishra) to continue for some more period. "We therefore, permit the respondent number-2 to continue as director of Enforcement Directorate till September 15, 2023. We clarify that no further application will be entertained for grant of extension to respondent number-2. We further clarify that respondent number-2 shall cease to be director of ED with effect from midnight of September 15-16, 2023," the bench said in its order.

In ordinary circumstances, the court said, it would not have entertained such an application after having held that extensions granted to Mishra by orders dated November 17, 2021 and November 17, 2022 were "illegal". It said it had permitted him to continue in office till July 31 in order to ensure a smooth transition.

After the order was dictated by the bench, Solicitor General Tushar Mehta, appearing for the Centre, urged the court to consider granting an extension to Mishra till September 30. "No. This (extension till September 15) also we have granted considering the larger national interest. In ordinary circumstances, we would have not entertained your application but you projected a national interest. No question after this. He would cease to hold the post from midnight of September 15-16, 2023," the bench told the government law officer categorically.

During the hearing, the top court questioned the Centre for seeking an extension for the officer and asked if the entire department is "full of incompetent people" except for its incumbent chief.

"Are we not giving a picture that there is no other competent person and the entire department is full of incompetent people? Is it not demoralising for the department that it cannot function if this person is not there" the bench told Mehta.

The top law officer argued the continuity in the ED leadership is necessary in view of the peer review by the Financial Action Task Force (FATF), the global anti-money laundering and terror financing watchdog, whose rating matters.

Mehta said Mishra is "not indispensable" but his presence is necessary for the entire exercise .

"Although the FATF team is coming on November 3, the communications are being exchanged before that. The question is of continuity of leadership. This will help the country and the rating given by the FATF is necessary for the economy as a lot depends on it including the credit ratings," he said.

During the hearing, Justice Gavai observed, "I am to become the Chief Justice of India. If anything untoward happens, then will the Supreme Court collapse?" Mehta said no one, including Mishra, is indispensable but he has been heading the institution for the past several years and his continuity is necessary for the ongoing FATF process.

Also representing the Centre, Additional Solicitor General S V Raju said, "Some neighbouring countries want India to fall into FATF's 'grey list' and therefore, the ED chief's continuity is necessary".

"I am not naming the countries but few of them are hoping that India falls into the grey list. I am not taking the names but one big country and another not so big country are hoping that we fall into the grey list," he said.

Being in the FATF grey list means a country is not doing enough to check financial crimes, something which may adversely affect its standing in the global community.

Raju added if extension is not granted, it will lead to damage to reputation, affect money laundering investigation and negatively impact the image of the country.

Senior advocate Abhishek Singhvi, appearing for one of the petitioners who had earlier challenged the extension granted to Mishra, opposed the Centre's application and termed it "deplorable" that a review of the July 11 verdict of the apex court was being sought in the garb of an application for extension of his tenure.

He said the FATF issue was dealt with by the top court in its verdict but despite that an application was moved for extension.

"Just see the level, it appears that the entire country is falling behind the shoulders of one person. Biggest of shoulders are falling behind this person," Singhvi said.

Mehta objected to Singhvi's submissions and said the court should not allow such arguments to be made during legal proceedings. Singhvi said the FATF review is an ongoing process and asked if one person goes, will the whole process stop.

Advocate Prashant Bhushan, appearing for NGO Common Cause also opposed the Centre's application and said they're trying to mislead the court as if ED is the main agency for the FATF review. "If he is so important, the government can appoint him as an advisor. Why do they need him till October 15, when they're saying that review is going on till next year?" Bhushan said.

The top court had on July 11 held as "illegal" two back to back one-year extensions granted to Mishra and said the Centre's orders were in "breach" of its mandamus (judicial writ) in the 2021 verdict that the IRS officer should not be given further term.

It had also curtailed Mishra's extended tenure to July 31 from November 18, 2023, when he was supposed to retire.

Mishra was first appointed the ED director for two years on November 19, 2018. Later, by an order dated November 13, 2020, the central government modified the appointment letter retrospectively and his two-year term was changed to three years.

The government had also promulgated an ordinance last year under which the tenure of the ED and CBI chiefs could be extended by up to three years after the mandated term of two years.

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