Supreme Court stays ED investigation against Tamil Nadu’s TASMAC, asks agency to look at individuals instead of corporation; earlier Madras HC had allowed the investigation
On Thursday (22nd May), the Supreme Court rebuked the Enforcement Directorate (ED) for raiding the headquarters of Tamil Nadu State Marketing Corporation (TASMAC). The apex court stayed the money laundering case linked with TASMAC.
The Supreme Court bench comprising Chief Justice of India (CJI) BR Gavai and Justice Augustine George Masih said that the Enforcement Directorate crossed its limits and violated the constitution as well as the federal structure by acting against a government body.
The apex court had issued a notice to the ED after the Tamil Nadu government approached the Supreme Court challenging the Madras High Court order allowing the ED to investigation to proceed in the alleged Rs 1000 crore scam in TASMAC.
Appearing for the Tamil Nadu government, senior advocate Kapil Sibal that the State itself has lodged 41 FIRs against liquor outlet operations in connection with allegations of corruption from 2014-21. The ED, however, entered the picture in 2025 and raided TASMAC’s headquarters and seized phones and other devices of the officers.
“This is a corporation giving liquor outlets. And we found some of the people to whom outlets have been given are actually taking cash. So, the State itself filed 41 FIRs from 2014-21 against individuals, not against the corporation. The ED comes into picture in 2025 and raids the corporation (TASMAC) and the head-office. All phones taken, everything taken. Everything cloned,” Sibal said.
Regarding this, the court questioned Additional Solicitor General SV Raju about how the offence was made against TASMAC.
“How can this offence be against the corporation? You may register against individuals.. A criminal matter against the corporation? Your ED [Enforcement Directorate] is crossing all limits,” CJI Gavai said.
Granting a stay on the proceeding, the top court asked the Enforcement Directorate to explain the predicate offence.
“Stay on the proceeding. When there are FIRs against officers, why is the ED coming here? Where is the predicate offence?? You (ED) put an affidavit,” the court said, adding that ED totally violated the federal structure of the Constitution.
Meanwhile, Additional Solicitor General SV Raju told the court that he will file a response.
As reported earlier, the ED created its ECIR in the TASMAC case by combining data from 40–50 smaller FIRs submitted by the State Anti-Corruption Bureau. These FIRs deal with charges of bribery, anomalies in the way distilleries were given tenders and inconsistencies in the way TASMAC regional offices issued bar licenses. The ED emphasised that their conclusions are supported by current data and point to dubious financial activity.
The agency asserted that the Financial Action Task Force (FATF) principles are violated and that the lack of cooperation and compliance with ED probes is a severe problem. They highlighted that in other states, the police readily share FIRs with the ED for money laundering investigations. This case, according to the ED, is a component of a broader probe into financial irregularities at TASMAC, which has generated legal and political turmoil in the state.
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