The Supreme Court on Tuesday extended until further orders its May 22 interim stay on the Enforcement Directorate’s probe into the ₹1,000-crore liquor scam linked to the Tamil Nadu State Marketing Corporation (Tasmac).

The bench, headed by Chief Justice B.R. Gavai, questioned the central agency’s power to investigate the matter when the state has already initiated a probe.

“What happens then to the federal structure, law and order has to be worked in its own domain,” the CJI told additional solicitor-general S.V. Raju, appearing for the ED.

The bench, which also had Justice K. Vinod Chandran, was of the view that the ED’s probe could come in the way of the country’s federal structure as law and order was a state subject.

“Are you not taking away the right to investigate by the state? Whenever you have a doubt that the state is not investigating the offence, then can you go and do it
yourself?”

Raju justified the probe, saying there was massive corruption involved and 41 FIRs had been lodged by the state authorities themselves. He said the central agency was only probing the money-laundering allegations in the case. According to Raju, the ED has seized “incriminating materials”, warranting the probe to continue.

On May 22, an earlier bench of CJI Gavai and Justice Augustine George Masih had come down heavily on the ED, saying it was “crossing all limits” and “violating the federal structure of the country”. The court had stayed the agency’s investigations.

During the arguments on Tuesday, Kapil Sibal, appearing for the state, questioned how a government company could be raided under the Prevention of Corruption Act when the allegations were against dealers selling overpriced liquor.

According to the senior counsel, the ED had seized the mobile phones, computers and other materials of the employees. “How can you raid government cooperative offices? What happens to the federal structure of this country?” Sibal asked.

Senior advocate Mukul Rohatgi, appearing for Tasmac, also questioned the ED’s decision to seize the phones and computers of employees on the ground that it violated the citizens’ fundamental right to life and liberty guaranteed under Article 21 of the Constitution.

“In the last six years we have gone through many ED cases, I don’t want to say it further as... last time I said it, it was reported everywhere,” CJI Gavai observed, to which Raju responded: “When something is said in our (ED) favour, it’s not reported, that is our grievance.”