The court felt that the State had gone “behind the Court’s back” by seeking a transfer of the case without notifying the High Court.
Madras: On Tuesday, the Madras High Court expressed its deep disappointment with the Tamil Nadu government for not informing the court about its move to file a transfer petition before the Supreme Court in the TASMAC vs Enforcement Directorate (ED) case.
The court felt that the State had gone “behind the Court’s back” by seeking a transfer of the case without notifying the High Court.
Background
The issue is related to Enforcement Directorate (ED) raids carried out between March 6 and March 8 at the offices and premises of TASMAC (Tamil Nadu State Marketing Corporation) — the State-run liquor distributor.
The ED claims there are financial irregularities in TASMAC’s operations involving more than Rs.1,000 crore, including:
- Tender manipulations
- Unaccounted cash transactions
- Overpricing at retail outlets
According to the ED, TASMAC retail outlets were reportedly charging customers Rs.10-30 more per liquor bottle than the mandated maximum retail price (MRP), indicating a systematic strategy of overpricing.
Following the raids, the ED claimed to have uncovered significant evidence of collusion between distilleries and TASMAC officials, allegedly resulting in the misappropriation of State revenue. These findings sparked political tensions, with the opposition Bharatiya Janata Party (BJP) staging protests and demanding transparency and action against corruption.
The ED further alleged that distilleries collaborated with bottling companies to artificially inflate expenses and record fictitious purchases. This scheme purportedly allowed substantial unaccounted funds to be diverted, which were then used to bribe TASMAC officials for favorable supply orders.
The agency also claimed there were irregularities in the allocation of transport and bar license tenders.
In response, the Tamil Nadu government and TASMAC accused the ED of overstepping its powers. They alleged that the ED entered the TASMAC offices without the State’s consent and kept TASMAC officials detained for over 60 hours under the pretext of conducting an investigation.
The matter was initially taken up by a Bench of Justices MS Ramesh and N Senthilkumar on March 20, but they later recused themselves from the case.
Then, a new Bench consisting of Justice SM Subramaniam and Justice K Rajasekar took up the case on April 1. They issued notices and set the final hearing dates for April 8 and 9, which was agreed upon by all parties.
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However, when the case was taken up on April 8, the State’s counsel informed the Bench that a transfer petition had been filed before the Supreme Court. This came as a surprise to the High Court, as the State had not informed them about this move earlier — even when the matter was “passed over” earlier that morning.
The Bench questioned the lack of transparency and fairness from the State’s side.
“What happened here in last hearing? … It is with your consent it is listed here … You are agreeing for final hearing in High Court but behind the back you are filing something in Supreme Court … Even today morning, you have not informed you filed something in Supreme Court. What prevented you from adopting fairness in the High Court?” — Justice Subramaniam
The judge clarified that although it is the State’s right to approach the Supreme Court, it should have shown respect and fairness toward the High Court, especially since the court had allotted specific time for the hearing.
“Cases are lined up in this Bench. We are struggling to find time … We gave you time.. Why you are insulting the High Court? … You are unfair to the Court proceedings! You are disrespecting. Nothing prevents you from filing petition in Supreme Court. (But) what prevented you from informing the Court? … You requested for five days time (to reply to counter). Is it not misrepresentation? Suddenly you are saying you filed transfer petition.” — Justice Subramaniam
The judge also raised doubts about whether the writ petition was genuinely filed in public interest or for protecting a few TASMAC officials.
“Why you have filed this writ petition? Government filed this writ petition in public interest for interest of few TASMAC officials? … Whether this writ petition is for the benefit of the public or some TASMAC officials?” — Justice Subramaniam
The State’s counsel asked for the case in the High Court to be adjourned until April 9, as the transfer plea was likely to be heard by the Supreme Court later the same day.
However, the High Court was not willing to grant the adjournment and only passed over the matter until 2:15 PM on April 8, insisting that the petitioners should stick to their commitment to argue the case.
“Why should we wait? Unless there is a stay order … We will wait up to 2.15 and we will continue at 2.15. Passed over.” — Justice Subramaniam
Earlier this week, the Tamil Nadu government approached the Supreme Court, requesting that it should hear the case instead of the High Court. The reason cited was that similar matters involving ED’s powers are already pending before the top court.
The Supreme Court is expected to take up the matter later today (April 8).
