In a dramatic revelation before the Supreme Court of India, Solicitor General (SG) Tushar Mehta stated that the Enforcement Directorate (ED) has recovered a staggering ₹23,000 crore in laundered money, which has already been distributed to the victims of financial frauds. The statement was made during a hearing held on Thursday, August 7, 2025, before a special bench led by Chief Justice B.R. Gavai and Justice Satish Chandra Sharma.

This major development came during an open court hearing concerning review petitions filed in response to the apex court’s May 2 judgment related to Bhushan Power & Steel Limited (BPSL). That verdict had ordered liquidation of BPSL, setting aside a previous resolution plan by JSW Steel Limited. However, on July 31, the Supreme Court recalled its May verdict, choosing to hear the matter afresh.

₹23,000 Crore Recovery: Not Retained by Government

Referring to the ongoing ED probe in the BPSL case, the CJI quipped, “Here also ED is there.” Responding to this, SG Mehta stated, “Let me tell a fact, which was never said in any court, and that is... ED has recovered ₹23,000 crore and given it to the victims.”

He emphasised that the recovered money doesn’t stay in government coffers, but is transferred to affected individuals and institutions, signalling a victim-centric approach in ED’s operations. This declaration is being seen as an unprecedented disclosure in a courtroom setting.

Supreme Court Questions Low Conviction Rates

While acknowledging the massive monetary recoveries, Chief Justice Gavai pointedly asked, “What is the conviction rate?” In response, SG Mehta conceded that conviction rates in penal offences remain very low, attributing this to systemic flaws in India’s criminal justice system.

To this, the CJI responded with sharp criticism: “Even if they are not convicted, you have been successful in sentencing them almost without a trial for years together.” The remark reflects judicial concern about prolonged pre-trial incarceration and misuse of legal process as punishment in ED-led investigations.

“Machines Stopped Working Due to Huge Cash”: SG

In an unusual yet telling anecdote, Mehta told the bench, “In some of the cases where politicians were raided, the cash was so huge that our cash counting machines stopped functioning... we had to bring new machines.” The Solicitor General also mentioned the media circus and social media narratives that typically follow such raids, particularly when prominent politicians are involved.

He added, “Some narratives are being built on YouTube programmes when some big politicians are caught,” subtly pointing to attempts to politicise ED actions through online platforms and opinion shows.

CJI Distances Judiciary from Media Narratives

Brushing aside the suggestion that judges are influenced by media or political commentary, Chief Justice Gavai said, “We do not decide matters on narratives… I don't see news channels. I see headlines in newspapers only in the morning for 10-15 minutes.”

SG Mehta acknowledged this and clarified that he understands judges are not swayed by social or digital media chatter, even as narratives are actively constructed outside courtrooms to influence public opinion.

Criticism of ED’s Role in Political Cases

The ED has faced mounting judicial scrutiny in recent years, especially over its aggressive approach in cases involving Opposition leaders. On July 21, in an unrelated case, the Supreme Court had observed that the ED was "crossing all limits", following the agency’s controversial move to summon two senior advocates for offering legal advice during an investigation.

Several past benches have also questioned ED’s discretion in arrests, especially where charges are yet to be proven or trials haven’t begun. This includes criticism of the broad powers granted under the Prevention of Money Laundering Act (PMLA), including prolonged detention without bail.

Background: BPSL and ED’s Involvement

The hearing that prompted this disclosure is related to the liquidation of Bhushan Power & Steel Limited, a high-profile case in India’s bankruptcy history. The court had overturned the resolution plan of JSW Steel, triggering a series of review pleas and legal arguments. The ED had been investigating alleged financial irregularities in the BPSL case, including money laundering linked to bad loans.

The re-hearing of the matter and SG’s remarks are likely to shape future rulings on insolvency, ED's role, and protection of financial victims.

Legal and Political Implications

The Supreme Court's sharp questions and Mehta’s rare disclosures highlight the tensions between the ED’s recovery achievements and procedural fairness. With billions of rupees recovered but low conviction rates, questions remain about whether justice is truly being served.

Furthermore, political allegations of ED being used selectively against Opposition leaders continue to cloud its image, despite its success in retrieving huge sums from financial scams.

The contrast between large-scale recoveries and delays in legal closure is likely to remain a key debate as India’s financial and legal systems grapple with accountability and transparency.

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