ASG SV Raju told the Supreme Court that its remarks on ED influence judiciary and media, as CJI Gavai questioned ED’s jurisdiction in TASMAC probe.
New Delhi: On August 18, the Enforcement Directorate (ED) told the Supreme Court of India that the views expressed by the apex court have a wide impact and “percolate through judiciary.”
The statement came during the hearing of Tamil Nadu’s plea challenging ED’s searches at the Tamil Nadu State Marketing Corporation (TASMAC) headquarters in Chennai.
Also Read: Case Analysis: TASMAC v. Enforcement Directorate (ED)
The matter was heard by a bench led by Chief Justice of India (CJI) B.R. Gavai. As the arguments began, CJI Gavai remarked that if he made any statement, Solicitor General Tushar Mehta, who was present in court, would argue that the court was making unwarranted observations.
On this, Additional Solicitor General (ASG) S.V. Raju submitted that he could convince the court about ED’s actions. Responding to this, CJI Gavai said,
“We do not hold anything against anyone…”
ASG Raju then stated before the court,
“I am sorry to say this, but the perception of this court percolates..not only media but also judiciary..”
He made this submission in the context of the Supreme Court’s earlier comments while staying ED proceedings against TASMAC, where the agency’s authority to initiate action against a government-owned corporation was questioned.
Earlier in May, CJI Gavai had remarked,
“You may register against an individual, but a Corporation? How can you register? Your ED is passing all limits!”
ASG Raju had then defended the ED’s action saying,
“We have done nothing wrong. There was cash recovered. I will show. This is a Rs. 1000 crore fraud.”
The bench, however, pressed further and asked,
“Where is the predicate offence?”
The Chief Justice reiterated that the Prevention of Money Laundering Act (PMLA) requires a scheduled offence as the basis for ED’s jurisdiction.
Also Read: Tamil Nadu Withdraws Supreme Court Plea to Transfer ED-TASMAC Case
The Supreme Court has now issued notice to the ED and directed that the matter will be heard after the summer vacation. Interim relief has been granted to Tamil Nadu with a stay on the ED’s proceedings.
The state government filed the Special Leave Petition (SLP) through Advocate Misha Rohatgi after the Madras High Court, on April 23, 2025, dismissed petitions filed by the state and TASMAC challenging the ED’s search operations carried out between March 6 and 8, 2025.
Tamil Nadu argued before the High Court that the ED’s search was procedurally flawed and aimed at tarnishing the state’s image. But the division bench of Justices S.M. Subramaniam and K. Rajasekar dismissed the petitions.
The judges observed that in this case only a search was conducted, and the petitioners had approached the court with what they called “complete whimsical arguments” to declare the search itself illegal.
The High Court said,
“It is agonising that public servants who ought to work for the welfare of the people, have approached this Court stating that they were detained by an investigating agency while conducting a search and that this amounts harassment. How can a procedure established by law be termed as harassment. This is a challenge to the very ethos of criminal justice system.”
The bench further noted,
“Can a few inconveniences which is product of ‘procedure established by law’ as embedded in Article 21 be equated against the economic rights of the people of this country. It is the mandate of the Constitution to secure to all its citizens Economic Justice. And legislations such as PMLA serve this object.”
The High Court also rejected Tamil Nadu’s claim that the search was politically motivated. It stated,
“But whether a Court can go and examine the political forces at play or be a partaker in the political game. Definitely not. That is not the duty of a Court of law.”
The court concluded that the ED must be allowed to investigate money laundering cases since such offences affect public interest. It therefore held that the agency would be free to proceed with all actions permissible under the PMLA.
Three writ petitions were originally filed before the High Court. The first, by the state government and TASMAC together, sought a declaration that the ED’s search operations were unconstitutional, arguing that they violated the principle of federalism and lacked the state’s consent.
They also asked for disclosure of the Enforcement Case Information Report (ECIR), which formed the basis of the search.
The other two petitions, filed solely by TASMAC, challenged the legality of the search and sought protection for its employees, who alleged harassment.
TASMAC also requested the court to order the ED to furnish a copy of the search authorization signed by Joint Director Piyush Yadav and sought an interim injunction against further intimidation.
Also Read: Ex-ED Officer Vs ED | Delhi HC Declines Officer’s PIL Against ED & Section 66 PMLA
Tamil Nadu contended that since no cash was recovered during the search, there were no “proceeds of crime,” and hence, the ED had no authority under PMLA.
The state’s Home Secretary alleged that the ED was conducting a “roving inquiry” into TASMAC without evidence of wrongdoing and was trying to malign the reputation of both the corporation and the government with baseless allegations.
Case Title:
The State of Tamil Nadu vs. Directorate of Enforcement.
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