In a significant move, the Supreme Court on Thursday halted all investigations by the Enforcement Directorate (ED) into alleged money laundering irregularities at Tamil Nadu’s state-run liquor body, TASMAC. The apex court came down heavily on the central agency, stating that it was “crossing all limits” in recent investigations. The court also issued a notice to the ED in response to a Special Leave Petition filed by TASMAC, challenging a Madras High Court order that had upheld ED’s raids. The bench questioned the legality of ED’s actions and raised concerns over the agency’s increasing tendency to overstep its jurisdiction.
Court questions ED’s legal grounds
The Supreme Court bench, led by Chief Justice BR Gavai and Justice AG Masih, sharply criticized the ED’s decision to register a case against a government corporation, saying it was legally questionable. “How can you register a case against a corporation? You may register against individuals, but how against a corporation?” the bench asked, addressing Additional Solicitor General SV Raju, who appeared on behalf of the ED.
The court observed that although FIRs had been registered against TASMAC officials, the ED had not clearly established the predicate offence—a legal requirement under the Prevention of Money Laundering Act (PMLA). When Raju claimed that the predicate offence was an alleged multi-crore laundering operation and insisted the agency had acted lawfully, the bench interrupted, stressing that the ED had been exceeding its powers in multiple cases.
Privacy concerns and procedural violations
Senior advocates Kapil Sibal and Mukul Rohatgi, representing TASMAC and its employees, argued that the ED had cloned mobile phones and seized personal devices without following due legal process. Rohatgi underscored the issue of privacy, while Sibal requested the court to bar the ED from using any data retrieved from the devices.
The case stems from a series of ED raids conducted at TASMAC’s Chennai headquarters from March 6 to 8, 2025. These operations were part of a money laundering probe, following which the Tamil Nadu government and TASMAC filed writ petitions in the Madras High Court seeking to declare the raids illegal. The high court dismissed these petitions in April, prompting TASMAC to approach the Supreme Court.
Earlier, the Supreme Court had declined to transfer the case out of the Madras High Court, despite the Tamil Nadu government’s plea. At the time, the high court accused the state of “forum shopping” and disrespecting the judiciary.
