The Supreme Court of India issued a stern rebuke to the Enforcement Directorate (ED) over its investigation into the Tamil Nadu State Marketing Corporation (TASMAC), the state’s liquor distribution entity.
The Court stayed the ED’s money laundering probe, criticizing the agency for overstepping its constitutional boundaries and violating the federal structure.
Court Observation
Chief Justice of India BR Gavai and Justice Augustine George Masih, presiding over the case, questioned the ED’s rationale for targeting a government-run corporation. They emphasized that while individual officials could be subject to investigation, initiating criminal proceedings against the corporation itself was inappropriate.
The Court demanded clarity on the predicate offense that justified the ED’s actions and instructed the agency to submit an affidavit explaining its legal basis.
The controversy stems from ED raids conducted between March 6 and 8, 2025, at TASMAC’s headquarters. These raids were based on allegations of overpricing liquor, tender manipulation, and bribery, leading to financial irregularities exceeding ₹1,000 crore. The ED’s investigation was reportedly prompted by 41 to 46 FIRs filed by the state government or TASMAC against its officials over several years.
TASMAC
Representing the Tamil Nadu government, Senior Advocate Kapil Sibal argued that the state had already initiated legal action against the individuals involved and that the ED’s intervention infringed upon the state’s jurisdiction.
He highlighted concerns over privacy violations, noting that during the raids, officials’ phones were seized and data was wiped. Senior Advocate Mukul Rohatgi, appearing for TASMAC, echoed these concerns, questioning the legality of the ED’s actions.
The Court’s decision to stay the ED’s probe underscores the ongoing tension between central investigative agencies and state authorities, particularly regarding jurisdictional overreach and adherence to constitutional principles.
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