The Supreme Court sharply rebuked the Enforcement Directorate (ED) for its ongoing money-laundering investigation into Tamil Nadu’s state-run liquor retailer, TASMAC, staying all further proceedings against the corporation.
The top court questioned the central agency’s jurisdiction, stating it was “crossing all limits” and infringing upon the country’s federal structure.
A bench led by Chief Justice of India D Y Chandrachud and Justice A G Masih was hearing a petition filed by the Tamil Nadu government, which challenged the ED’s March 2025 raids at the TASMAC headquarters and other locations.
Senior Advocate Kapil Sibal, representing the state, informed the court that the government had itself taken action earlier by registering 41 FIRs between 2014 and 2021 against individuals accused of accepting cash in exchange for allotting liquor outlets. “There were no allegations against the Corporation itself,” Sibal stressed, questioning the ED’s sudden interest in initiating a probe in 2025.
CJI Gavai took strong exception to the ED’s actions, observing, “How can there be an offence against a corporation in a criminal matter? You can register cases against individuals, but how do you implicate the corporation itself?”
The court issued a notice to the ED and directed the agency to respond within two weeks. Meanwhile, it ordered a stay on all proceedings related to the case as far as the petitioners were concerned.
TASMAC’s legal representation included Senior Advocate Mukul Rohatgi, who raised serious concerns about the ED’s conduct during its investigation. Rohatgi alleged that the agency had seized and cloned employee phones and extracted sensitive data, urging the court to prevent the ED from using this material. “There is something called privacy,” Rohatgi said.
Sibal echoed these sentiments, stating, “They have taken our data. That data cannot be used.”
Additional Solicitor General S V Raju, appearing for the ED, defended the probe, claiming it involved a ₹1,000 crore fraud allegedly linked to political figures. However, the bench remained unconvinced. “Where is the predicate offence? The state has already registered FIRs. Why should the ED interfere unnecessarily?” CJI Gavai asked.
While the ASG maintained there was no mala fide intent behind the investigation, the CJI reiterated the court’s concerns. “You are totally violating the federal structure… The ED is crossing all limits,” he said, while assuring the state that its interests were protected.
The matter will next be heard after the ED files its affidavit in response.
In early March, the ED had launched a large-scale operation targeting TASMAC, carrying out searches across 20 locations including its Chennai headquarters, as part of an investigation into alleged financial irregularities in the government-owned liquor distribution body.
Read More: DUTIES CAN BE CHARGED IF EXCISABLE GOODS ARE MANUFACTURED OR PRODUCED IN INDIA: CESTAT
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