Did the SC Just Halt the ED's Probe into TASMAC?

New Delhi, May 22 (NationPress) The Supreme Court has put a halt to the Enforcement Directorate's investigation into Tamil Nadu's state-run liquor corporation, TASMAC, citing significant concerns regarding the agency's overreach. A bench led by Chief Justice of India (CJI) B.R. Gavai and Justice A.G. Masih condemned the ED for allegedly overstepping its bounds and infringing upon the country's federal structure.

“Your ED is crossing all limits. You are completely violating the federal structure. How can there be an offence against the corporation?” CJI Gavai questioned Additional Solicitor General (ASG) S.V. Raju, who represented the ED.

This ruling comes as the apex court reviewed petitions from the Tamil Nadu government and TASMAC, which contested the Madras High Court's April 23 decision, permitting the ED's investigation under the Prevention of Money Laundering Act (PMLA).

Senior Advocate Kapil Sibal, representing the Tamil Nadu government, informed the court that the state had already taken steps addressing allegations of corruption.

“The state has filed 41 FIRs between 2014 and 2021 against individuals accused of accepting bribes for liquor outlet allotments. These were criminal acts committed by individuals, not by the corporation itself,” Sibal contended.

He further argued that despite the state's actions, the ED intervened in 2025, raiding the TASMAC headquarters and seizing phones and electronic devices from officials.

“Everything was cloned. This is a blatant overreach,” he stated.

Sibal urged the court to prevent the ED from utilizing any data obtained from these devices, labeling it a serious breach of privacy.

Senior Advocate Mukul Rohatgi, representing TASMAC, echoed these sentiments, accusing the ED of violating the privacy of officials by cloning their phones unlawfully.

In defense, ASG Raju asserted that the investigation involved a Rs 1,000 crore scam, alleging that state officials and politicians were complicit in large-scale corruption.

He claimed that distillery companies had allegedly siphoned off significant sums of unaccounted cash and bribed their way into lucrative TASMAC supply contracts.

Additionally, he noted that TASMAC retail outlets were allegedly selling liquor above the Maximum Retail Price (MRP).

However, the bench remained skeptical. CJI Gavai questioned the foundation of the ED's jurisdiction, asking, “Where is the predicate offence? The State is already investigating. Why should the ED interfere unnecessarily?”

The Supreme Court's temporary relief is a significant setback for the ED, which conducted raids on March 6 and 8 this year.

The Tamil Nadu government had opposed the central agency's actions, citing political vendetta and abuse of power.

Previously, the Madras High Court had dismissed the state and TASMAC's claims, stating that money laundering constitutes “a crime against the people of the nation.”

The High Court also deemed allegations of harassment as “inadequate and highly disproportional,” warning against attributing political motives to investigative bodies.

“If such harassment claims are entertained, it could lead to a flood of litigation, with every accused challenging legitimate investigations,” the High Court remarked.

It further dismissed the state's assertion of political motivation behind the ED's actions, emphasizing that courts cannot be “partakers in the political game” or assess “political forces at play.”

The Supreme Court's intervention now pauses the ED's investigation, at least for the time being, and raises critical questions about the extent of central investigative powers concerning state-run entities.

ASG Raju has assured the court that the ED will submit a comprehensive response.