The ED has accused TASMAC and its associated distilleries of financial crimes worth more than Rs.1,000 crore.
MADRAS: On Wednesday, the Tamil Nadu State Marketing Corporation (TASMAC) told the Madras High Court that the Enforcement Directorate (ED) overstepped its authority during a recent raid.
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TASMAC claimed that the ED had crossed the boundaries of its jurisdiction, which resulted in procedural irregularities that violated the Prevention of Money Laundering Act (PMLA). The corporation further alleged that the ED’s actions had infringed on the privacy of its officials.
The matter was heard by a division bench of Justices SM Subramaniam and K Rajasekar, who were considering petitions filed by TASMAC and the State Government. These petitions challenged the ED’s raid proceedings.
Senior counsel Vikram Chaudhary, who represented TASMAC, made his arguments on the second day of proceedings.
He primarily raised two concerns: first, that the ED’s raid was illegal, and second, that it violated the privacy of TASMAC officials.
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“There is an umbilical connection between the ED’s proceedings and scheduled offence. It cannot go beyond the scope of the scheduled offence” Chaudhary said.
He went on to argue that if the scheduled offence, registered by another agency, was closed, then the ED should also close its proceedings. Chaudhary emphasized that no scheduled offences were involved in this case, and the ED had refrained from sharing the Enforcement Case Information Report (ECIR) during the search, claiming it was confidential.
“The ED is not police and they cannot enter into any premises to conduct a search and launch a case. They should be confined within the scheduled offences, it can only act on the offences established by other agencies,” the senior counsel further stated.
He also pointed out that the Supreme Court had previously ruled that the reasons for conducting a search and seizure should be provided to the affected party. However, this was not done in the case involving TASMAC.
“Reasons to believe for search and seizure have to be furnished to the affected person, but it was not disclosed to Tasmac in the present case,” Chaudhary said.
In his submissions, Chaudhary also argued that the ED had violated the privacy of TASMAC employees, including women, by detaining them for long hours, sometimes until midnight, and conducting a search that lasted over 60 hours.
“Even the counter submitted by the ED disclosed that they allowed the employees to go home at midnight and asked them to come back the next morning, how can they investigate the employees during the night time, it is harassment,” he contended.
Moreover, Chaudhary pointed out that the ED had seized data from the officials and employees but had failed to disclose any reasons for doing so.
“Further, the data from officials and employees were seized by the ED and no reason was disclosed which is breach of privacy,” he alleged.
Since TASMAC’s submissions were not completed, the matter was adjourned and will be heard again on April 15 for further submissions.
BACKGROUND
The case is related to ED raids that happened at TASMAC offices between March 6 and March 8. These raids were carried out in different places, including TASMAC’s headquarters in Chennai and several distilleries and bottling plants across Tamil Nadu.
TASMAC has argued in court that ED’s actions were too harsh and went beyond their legal power. They said ED officers forcefully entered their premises and violated employee rights, even taking away their mobile phones without proper reason.
The ED has accused TASMAC and its associated distilleries of financial crimes worth more than Rs.1,000 crore. According to ED, there were multiple issues:
- Tenders were manipulated
- Unaccounted cash was being handled
- Retail shops were charging more than the legal MRP
Specifically, ED said that TASMAC liquor shops were charging Rs 10 to Rs 30 extra per liquor bottle, which is above the fixed retail price. This, they claim, was a planned and organised effort to make illegal profits.
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