Pratiksha Ghosh
New Delhi, May 22 2025:In a significant development, the Supreme Court of India on Thursday stayed the Enforcement Directorate’s (ED) ongoing money laundering probe against the Tamil Nadu State Marketing Corporation (TASMAC), pulling up the central agency for allegedly exceeding its jurisdiction and questioning the very basis of its investigation.
A bench headed by Chief Justice of India D.Y. Chandrachud observed that the ED appeared to be overstepping constitutional limits and asked the agency to clarify the existence of a predicate offence, a prerequisite under the Prevention of Money Laundering Act (PMLA).
“You may register cases against individuals, but why is ED investigating a corporation like TASMAC? Where is the predicate offence?” the bench remarked.
The Supreme Court’s intervention comes in response to a petition filed by the Tamil Nadu government challenging the April 23 order of the Madras High Court that allowed the ED to proceed with its investigation. The state contended that the ED’s actions, including raids and interrogations, amounted to harassment and were politically motivated.
Representing the state, senior advocates Kapil Sibal and Amit Nand Tiwari argued that the Tamil Nadu government had already filed over 40 FIRs since 2014 related to alleged irregularities in the liquor retail sector. They submitted that there was no need for a parallel probe by the ED, especially in the absence of a substantiated predicate offence.
The ED had earlier claimed that it uncovered financial irregularities worth Rs 1,000 crore during raids at TASMAC premises, including allegations of unaccounted cash, illegal surcharges on liquor bottles, and tender manipulation involving distilleries.
The agency also alleged the involvement of top officials in these irregularities.
However, the Supreme Court’s order halts further ED proceedings in the case for now, pending detailed hearings. The bench observed that while corruption must be investigated, agencies must act within the boundaries set by law.
Reacting to the development, the ruling DMK welcomed the Supreme Court’s decision. The party accused the Centre of using the ED to target opposition-ruled states and claimed that the verdict vindicated their stance.
“This is a blow to politically driven misuse of central agencies. The BJP has been trying to malign the Tamil Nadu government ever since it came to power,” said a senior DMK functionary.
The court has asked the ED to file its response justifying the continuation of the investigation.
The matter is expected to be taken up for detailed hearing in the coming weeks.
