The Tamil Nadu government’s original plea questioned the legality of the ED’s raids at TASMAC premises, including whether the agency was empowered to seize mobile phones and extract data from employees without consent or judicial approval.
NEW DELHI: 8th April: The State of Tamil Nadu on Tuesday withdrew its plea from the Supreme Court, which sought the transfer of the Enforcement Directorate (ED) raid-related case involving the Tamil Nadu State Marketing Corporation (TASMAC) from the Madras High Court to the apex court.
The decision came after a Bench led by Chief Justice of India (CJI) Sanjiv Khanna and Justice PV Sanjay Kumar advised that the issues of search, seizure, and the confiscation of electronic gadgets could be effectively addressed by the Madras High Court.
“As far as search and seizure is concerned, the 1956 judgment settles it. Let it be decided. Let it be decided there (in Madras High Court). You can come here later,” the Bench observed, adding, “The matter pertaining to seizure of electronic gadgets of journalist is different. The threshold of privacy is higher there. Let the Madras High Court deal with it.”
Following these remarks, Senior Advocate Mukul Rohatgi, appearing for the State, opted to withdraw the plea, which the Bench allowed.
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Solicitor General Tushar Mehta, appearing for the ED, had earlier accused the State of “forum shopping” by approaching the Supreme Court while a similar petition was pending before the High Court.
The Tamil Nadu government’s original plea questioned the legality of the ED’s raids at TASMAC premises, including whether the agency was empowered to seize mobile phones and extract data from employees without consent or judicial approval. The State also alleged that TASMAC staff were illegally detained for over 60 hours during the raids.
Previously, the State had moved the Madras High Court alleging that ED officers entered the premises without proper justification and held employees for extended hours. Women staff were reportedly allowed to leave only past midnight and were ordered to return by 8 or 9 AM the next morning.
Madras High Court’s Hearing
Today’s hearing-8th April, 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.
The High Court Bench of Justices MS Ramesh and N Senthilkumar, which initially heard the matter on March 20, expressed concern over the ED’s conduct, especially the claim that the agency “took control” of the premises and detained employees.
The Court even suggested that the State narrow the scope of its petition, to which the State agreed. However, on March 25, the same Bench recused itself from the case, prompting the State to seek transfer of the matter to the Supreme Court.
Tamil Nadu’s plea before the apex court also highlighted that the ED had not furnished key legal documents such as the Enforcement Case Information Report (ECIR), seizure memos, hash values of data, or search warrants. It contended that the ED’s actions violated procedural safeguards under law.
The petition also cited ongoing Supreme Court cases, including those filed by the Foundation of Media Professionals and NewsClick, which raised similar concerns regarding ED’s handling of digital searches.
In light of these, the State urged the apex court to take over the TASMAC case for consistent judicial interpretation and to avoid conflicting rulings from different courts.
The ED had conducted raids from March 6 to March 8 at TASMAC’s headquarters in Chennai and across several distilleries and bottling plants in Tamil Nadu. The agency alleged financial irregularities of over Rs. 1,000 crore, citing illegal tendering practices, overpricing of liquor, unaccounted cash transactions, and a network of collusion between distilleries and TASMAC officials.
According to the ED, distilleries colluded with bottling firms to inflate expenses and make fictitious purchases, thereby generating unaccounted funds. These funds were allegedly used to bribe officials and secure favorable contracts.
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.
The probe also uncovered irregularities in transport and bar license tenders, prompting political uproar in the State. The opposition Bharatiya Janata Party (BJP) demanded action and transparency, while the ruling Dravida Munnetra Kazhagam (DMK) accused the Centre of misusing federal agencies for political gain.
Both TASMAC and the State government have maintained that the ED’s actions exceeded its legal authority, especially since the agency entered State-run premises without seeking the State’s consent.
The matter now returns to the Madras High Court for further adjudication.
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