SC slams ED for ‘crossing all limits’, stays probe against Tamil Nadu liquor retailer

Slamming the Enforcement Directorate (ED) for “crossing all limits” and violating the federal concept of governance, the Supreme Court on Thursday stayed its money laundering probe against the state-run liquor retailer Tamil Nadu State Marketing Corporation (TASMAC) in connection with grant of wine shop licences.

“How can this offence be against the corporation? You may register against individuals… A criminal matter against the corporation! Your ED is crossing all limits,” a bench led by CJI BR Gavai told Additional Solicitor General SV Raju who represented the ED, while staying the ED probe against the corporation.

“The ED is violating the federal concept (of governance),” the bench said, questioning the raids on TASMAC premises.

The top court’s comments came after senior advocates Kapil Sibal and Mukul Rohatgi, representing the Tamil Nadu Government and TASMAC, respectively questioned the conduct of the central probe agency.

Pointing out that the state government itself had filed 41 FIRs against individuals since 2014, Sibal said, “The ED comes into picture in 2025 and raids the corporation head office.”

Both Sibal and Rohatgi raised the issue of right to privacy, saying the agency took away phones of accused. “All phones have been wiped out. Is there something such as privacy…,” Rohatgi submitted.

The ED raided the TASMAC’s headquarters between March 6 and March 8 over allegations that TASMAC officials were involved in overpricing of liquor bottles, tender manipulation and bribery, leading to financial irregularities of over Rs 1,000 crore. The probe agency suspected money laundering based on allegations contained in dozens of FIRs registered by the state government/TASMAC against TASMAC officials over the years.

The Tamil Nadu Government and TASMAC, however, termed the raids as illegal, saying the ED overreached its powers. They have challenged the Madras High Court’s April 23 order upholding the ED’s actions, alleging grave violations of constitutional rights and the federal structure.

“The present petition raises questions of law having wide ramifications, including the issue of federalism laid bare by the respondent (ED), exceeding its remit and attempting to usurp the state’s right to investigate offences occurring therein,” the Tamil Nadu Government submitted.

India