Weekly Legal Brief: Lokpal's Jurisdictional Puzzle, PMLA Arrests Under SC Scrutiny, and Major Corporate Deals

This week's legal landscape was marked by a significant debate on the jurisdiction of India's premier anti-corruption body, a fresh Supreme Court challenge to the Enforcement Directorate's powers of arrest, and a flurry of high-value corporate transactions. A controversial order from the Lokpal of India has ignited concerns about creating an accountability vacuum for officials of constitutional bodies, while the Supreme Court continues to probe the procedural intricacies of arrests under the Prevention of Money Laundering Act (PMLA). Concurrently, law firms guided major fundraises in the renewable energy and jewellery sectors, highlighting robust M&A activity.

Lokpal's Order on UPSC Officials: A Question of Accountability

A recent order from the Lokpal of India has stirred a significant constitutional and administrative law debate by refusing to exercise jurisdiction over a complaint against high-ranking officials of the Union Public Service Commission (UPSC). The decision, which legal experts argue could have far-reaching implications, hinges on a narrow interpretation of key statutes, potentially creating a new class of public officials immune from the anti-graft watchdog's scrutiny.

The Core of the Controversy

The Lokpal, in its September 4, 2025 order, contended that officials of the UPSC, including Secretaries and Additional Secretaries, do not qualify as public servants serving "in connection with the affairs of the Union." Instead, it held they serve exclusively in connection with the affairs of the Commission itself. This distinction effectively places them outside the jurisdictional ambit of Section 14 of the Lokpal and Lokayuktas Act, 2013.

Legal analyst and advocate Tanishk Goyal argues that this interpretation "not only subverted the scheme of the 2013 Act, but also undermined the Constitution’s commitment to ensure public accountability for all officials." The 2013 Act was specifically enacted to create a powerful and independent body to investigate corruption allegations against senior government functionaries. Its jurisdictional scope, defined in Section 14, extends to Groups A, B, C, and D officers of the Central Government, drawing its definition of "public servant" directly from the Prevention of Corruption Act, 1988 (PC Act).

The PC Act, under Section 2(c)(x), explicitly includes "any person who is a chairman, member or employee of any Service Commission or Board" within its definition of a public servant. The Lokpal Act adopts this definition but adds the qualifier that such individuals must be serving "in connection with the affairs of the Union." It is this qualifier that the Lokpal has interpreted narrowly to exclude UPSC officials.

Constitutional and Legal Ramifications

The order's reasoning faces criticism on several grounds, primarily for its perceived conflict with the constitutional framework governing public services.

• Challenging Constitutional Design: Part XIV of the Constitution categorizes public services into only two streams: those connected with the affairs of the Union and those with the affairs of the States. As the Supreme Court affirmed in Government of NCT of Delhi v. Union of India , there is no third category. The administration of the UPSC, a body established under the Constitution to serve the recruitment needs of the central government, is invariably a constitutional responsibility of the Union. Goyal notes, "By necessary implication, the administration of the UPSC... invariably falls within 'affairs of the Union'." This view is further supported by Article 315(5) of the Constitution, which states that references to the UPSC should be construed as references to the Commission serving the needs of the Union.

• Creating an Anomaly: The order creates a peculiar legal inconsistency. Secretaries and Additional Secretaries at the UPSC are unequivocally considered "public servants" under the PC Act and are liable for prosecution under it. The Lokpal's ruling, however, carves out a sub-class of these officials who, while being public servants for the purpose of criminal prosecution, are not considered so for the purpose of an inquiry by the Lokpal. This creates an accountability gap and, as Goyal warns, "lays the foundation for an argument that Secretaries and Additional Secretaries employed with other constitutional bodies should also be insulated from statutory accountability mechanisms."

• Eroding a 'Fourth Branch Institution': The Lokpal is designed as a 'fourth branch institution'—an independent body meant to uphold constitutional values and act as a check on the executive, legislative, and judicial branches. By constricting its own jurisdiction, the Lokpal risks diminishing its role as a crucial guardrail against corruption. "If allowed to remain unchecked, it will set the tone for the gradual erosion of one of the Constitution’s most important guardrails against corruption and executive excesses," Goyal writes.

This decision will likely be scrutinized in legal circles and could face a judicial challenge, as it raises fundamental questions about the scope of anti-corruption laws and the principle of universal public accountability.

Supreme Court Probes ED's Arrest Procedures in PMLA Case

The Supreme Court has once again turned its focus to the extensive powers of the Enforcement Directorate (ED), issuing a notice to the agency in a plea filed by Chaitanya Baghel, son of former Chhattisgarh Chief Minister Bhupesh Baghel. The case, arising from the alleged ₹2,000 crore liquor scam, challenges the legality of his arrest and the constitutional validity of key PMLA provisions.

A bench of Justices Surya Kant and Joymala Bagchi is examining arguments that the ED arrested Baghel on grounds of "non-cooperation" without ever issuing a summons. Senior Advocate Kapil Sibal, appearing for Baghel, argued forcefully, "They never sent me a notice. They never summoned me... They can’t arrest me on non-cooperation without giving notice."

The case also brings to light procedural issues, with Baghel's plea contending that the ED conducted further investigation without the mandatory permission of the jurisdictional court, an act the Chhattisgarh High Court had previously termed a "procedural irregularity" that did not vitiate the investigation. Baghel's challenge before the apex court argues this irregularity renders the entire process, including his arrest, void.

Beyond the specifics of the arrest, the petition mounts a broader constitutional challenge to Sections 50 and 63 of the PMLA. The plea asserts that these sections, which empower the ED to compel self-incriminating statements admissible in court, violate the fundamental rights under Articles 14, 20(3), and 21 of the Constitution. This aspect of the case joins a growing list of challenges to the PMLA's stringent provisions, keeping the spotlight on the balance between empowering investigative agencies and protecting individual liberties.

Deal Desk: Law Firms Steer Major Fundraises

The corporate law sector saw significant activity, with two major fundraises showcasing continued investor confidence in key Indian industries.

• Saraf and Partners Advises on Goldi Solar's ₹1422 Crore Fundraise: Saraf and Partners played a pivotal role in advising Goldi Solar and its promoter, Ishverbhai Dholakiya, on a massive ₹1422 crore fundraising. The firm provided comprehensive legal counsel covering deal structuring, documentation, negotiation, and closing mechanics. The transaction was led by Partner Navomi Koshy , with support from associates Rupam Das and Abhishek Jasuja. Notably, Partner Akshayy S Nanda and associate Tanya Vats handled the competition law aspects, securing the necessary composite approval from the Competition Commission of India (CCI), a crucial step given the evolving regulatory landscape.

• JSA Acts for Goyaz Jewellery in ₹130 Crore Series A Round: JSA Advocates & Solicitors advised Goyaz Jewellery Private Limited on its ₹130 crore Series A fundraise, which was led by Norwest Venture Partners. The JSA transaction team was spearheaded by Partner Rishabh Gupta , along with Partner Akshath Mithal and associates Saurabh Chatterji and Tanmayee Shriprasad Apte. The deal also involved specialised advice on employment law, provided by a team led by Partner Preetha Soman , highlighting the multifaceted legal considerations in venture capital transactions.

Firm News: S&R Associates Elevates Three to Retained Partnership

In a significant internal development, S&R Associates designated Shiv Bhargava , Kanika Khanna , and Prateek Sharma as Retained Partners in its New Delhi office.

- Shiv Bhargava , a 2015 Symbiosis Law School graduate, focuses on capital markets and corporate governance.

- Kanika Khanna , an ILS Law College alumnus from 2009, specializes in M&A, private equity, and joint ventures.

- Prateek Sharma , who graduated from NLSIU, Bengaluru in 2013, has a practice covering M&A and foreign investment, with deep experience in the infrastructure and technology sectors. This move signals the firm's commitment to nurturing internal talent and strengthening its corporate practice leadership.