The Enforcement Directorate (ED) and the Income Tax Department are set to get more teeth, with the Centre planning to empower the two agencies to auction assets of defaulters or those involved in money laundering, according to a report in Business Standard.

The ED’s existing powers allow it to provisionally attach the property of an individual who is believed to be in possession of “proceeds of a crime”. However, it involves a lengthy process. Introducing new provisions in the Prevention of Money Laundering Act (PMLA) would enable the ED and the I-T department to auction attached assets immediately after filing a chargesheet or before the start of case trials.

An ED official was quoted as saying that the amendment would speed up the process of recovery in cases where assets have been converted into immovable property and also where investors are awaiting a court verdict.

The official added the concerned ministry has discussed the issue with senior ED and I-T department officials.

Under the current mechanism, appeals and adjudication proceedings result in the matter dragging on for years, meaning that there is no finality in the liquidation proceedings till the appeal is decided.

Meanwhile, the ED it still awaiting powers to initiate proceedings before a case is registered by the police or Central Bureau of Investigation. A Special Investigation Team on black money had earlier recommended that the government create a statutory mechanism in this regard.

The deliberations to empower the ED come days after the Modi government notified an ordinance to give the Reserve Bank of India more powers to intervene in bad loan cases. #casansaar (MoneyControl - Business Standard)