In a temporary reprieve for TASMAC, the Madras High Court directed the Enforcement Directorate (ED) on Thursday not to continue its actions following recent searches at the headquarters of the state-run liquor retailer in Chennai.
During the proceedings, the High Court also instructed the ED to present copies of the First Information Report (FIR) and the Enforcement Case Information Report (ECIR), along with any other materials that provided the basis for their allegations against the Tamil Nadu State Marketing Corporation.
Following searches conducted at TASMAC earlier this month, the ED asserted that it uncovered irregularities amounting to approximately ₹1,000 crore.
A division bench, comprising Justices M S Ramesh and N Senthilkumar, scheduled further hearings on March 25 regarding the petitions filed by TASMAC and the Tamil Nadu government challenging the ED searches.
In its petition, TASMAC requested that the ED cease its harassment of its employees under the pretense of investigation and argued that the agency’s attempts to investigate offenses within the state’s jurisdiction violated federal principles.
During the hearing, Advocate General P S Raman, representing the state government, argued that the ED could only proceed with searches if they had the state government’s consent.
When the bench expressed its concerns regarding this request, the Advocate General sought additional time to submit an application to amend the request.
Senior counsel Vikram Choudhry, representing TASMAC, contended that the actions of the central agency should be conducted with transparency. He criticized the ED for entering premises and seizing digital devices, claiming such actions constituted an invasion of privacy.
Citing Section 17(1) of the Prevention of Money Laundering Act (PMLA), Choudhry stated that searches and seizures should only occur if there is tangible evidence of money laundering. He emphasized that the reasoning for such actions must be documented in writing and communicated to the investigators.
He also complained that during the raids, employees, including women, were not allowed to leave and were subjected to prolonged waiting times.
Additional Solicitor General A R L Sunderesan refuted these allegations.
Raman stated that he would provide CCTV footage to demonstrate that employees were not permitted to exit the premises.
Sunderesan maintained that there had been a money laundering offense, thus warranting the search at TASMAC’s office.
In their brief order, the bench noted that the Additional Solicitor General requested time to file a counter affidavit and mandated the ED to produce the FIR and ECIR, along with any supporting material, by March 24.
Previously, the ED claimed it identified “numerous irregularities” within TASMAC’s operations, citing issues such as manipulation of tender processes and unreported cash transactions totaling ₹1,000 crore through various distillery companies.
The federal agency claimed it obtained evidence of corrupt practices following its raids on employees, corporate offices of distilleries, and TASMAC plants on March 6, and suggested that kickbacks were involved.
