'ED crossing all limits': Supreme Court stays probe into Tasmac liquor case

CJI BR Gavai criticises Enforcement Directorate for overreach, halts further proceedings in Tasmac case until further notice

The Supreme Court on Thursday stayed further proceedings by the Enforcement Directorate (ED) in its ongoing investigation into the Tamil Nadu State Marketing Corporation (Tasmac), with Chief Justice of India BR Gavai sharply criticising the agency’s conduct.

 

“You may register cases against individuals... but corporations? Your ED is crossing all limits,” CJI Gavai said during the hearing, reported Bar and Bench.

 

ED actions stayed; notice issued

 

A bench led by CJI Gavai issued notice to the ED, returnable after the court’s summer vacation, and ordered a stay on the agency’s actions until further orders.

 

“Issue notice, returnable after vacation. Meanwhile, stay granted of further proceeding,” the CJI stated.

 

 

The observations were made during the hearing of a petition filed by the Tamil Nadu government, which challenged the ED’s March 14 and May 16 raids under the Prevention of Money Laundering Act (PMLA).

 

Sibal: 'ED seized and cloned officials’ phones'

 

Appearing for the state, Senior Advocate Kapil Sibal argued that the ED had seized and cloned mobile phones of Tasmac officials during the raids, despite the state’s own Directorate of Vigilance and Anti-Corruption (DVAC) having already filed 41 FIRs between 2014 and 2021 related to alleged corruption.

 

Sibal contended that the ED was unjustifiably pursuing a corporation rather than individuals, violating principles of federalism and due process.

 

ED allegations: 'Unaccounted cash and overpricing'

 

In March, the ED claimed it had uncovered unaccounted cash worth ₹1,000 crore during its investigation into Tasmac’s operations. It alleged irregularities in:

 

• Corporate postings

• Transport contracts

• Bar licence tenders

• Indent orders favouring distilleries

 

It also accused Tasmac of imposing surcharges of ?10–?30 per liquor bottle, with alleged collusion from officials.

 

The ED said it based its case on the DVAC’s earlier FIRs and was probing whether these irregularities involved money laundering under the PMLA.

 

Raids continued in May

 

The ED conducted fresh searches on May 16 across ten premises in Tamil Nadu, as part of the ongoing probe. The Tamil Nadu government, however, maintains that the central agency is encroaching on its jurisdiction.

 

The court will take up the matter again after the summer recess.