The Supreme Court on Thursday came down heavily on the Enforcement Directorate (ED) for “crossing all limits” and “violating the federal structure of the country”, staying the agency’s investigations into the alleged ₹1,000 crore liquor scam in the Tamil Nadu State Marketing Corporation (Tasmac).
Chief Justice of India B.R. Gavai and Justice Augustine George Masih, while staying the probe by the ED, issued a notice to it seeking a detailed reply on the nature of the predicate offence which formed the basis for the central agency’s investigation.
“Your ED is crossing all limits. You are totally violating the federal structure of the country,” CJI Gavai orally told additional solicitor-general S.V. Raju, who appeared for the ED.
The rebuke comes in the backdrop of repeated allegations by Opposition leaders and critics of the government that the ED, which probes allegations under the Prevention of Money Laundering Act, 2002, is being increasingly used against those who are not in sync with the government’s policies and ideologies.
Representing the Tamil Nadu government, senior advocate Kapil Sibal told the bench that in 2025, the ED chose to step in even though the directorate of vigilance and anti-corruption (DVAC) had registered 41 FIRs against certain individuals of Tasmac, but not against the corporation.
He said the DVAC had conducted the probe and registered the 41 FIRs against different individuals between 2014 and 2021, yet the ED chose to raid the Tasmac premises in March and registered criminal cases against the corporation and
several individuals.
This prompted the CJI to ask Raju: “How can a criminal offence be made against the corporation? We can understand that you may register FIRs against individuals, but against the corporation in a criminal matter? Your ED is crossing all limits….”
Raju told the bench that the ED had to step in as the fraud amounted to ₹1,000 crore of public money siphoned by some persons. He said the allegations related to several individuals, including politicians.
“The ED comes into the picture in 2025 and conducts raids on the corporation and the head office. They have taken everything, including phones, of the officers. Everything is cloned,” Sibal complained.
Appearing for Tasmac, senior advocate Mukul Rohatgi supported Sibal and said the phones of the officers were cloned by the ED, a violation of the right to privacy.
Raju, however, said the ED was forced to intervene as it involved several politicians and the state was trying to protect them. According to the ED, it had registered the case based on the 41 FIRs lodged by the DVAC relating to alleged overpricing of liquor sales, manipulation of tender norms and other irregularities.