Tamil Nadu’s ruling Dravida Munnetra Kazhagam (DMK) on Thursday welcomed the Supreme Court’s stay on the Enforcement Directorate (ED)’s probe into the state-run liquor distribution corporation’s alleged money laundering, calling it a “blow” to Bharatiya Janata Party (BJP)’s efforts to “malign” the state government.
A bench of Chief Justice BR Gavai and Justice AG Masih rebuked the ED and said the agency had been “crossing all limits” while probing some cases.
DMK leader R S Bharathi cited the court order and said they hope the Union government stops misusing the ED. “The ED has become an agency to blackmail across India, which is what even the Supreme Court pointed out,” he said. He added that there have been cases of ED sleuths receiving bribes in Kerala and Tamil Nadu.
The Tamil Nadu State Marketing Corporation (TASMAC) moved the Supreme Court, challenging the April 23 Madras high court order dismissing petitions for declaring the ED’s searches at the corporation’s headquarters in Chennai in March illegal.
The Supreme Court orally questioned the legality of the ED’s actions, including its decision to register a case against a corporation. “How can you register a case against a corporation? You may register against individuals, but how against a corporation?” the bench asked additional solicitor general SV Raju.
The court noted that ED had registered cases against TASMAC officials but was silent on the predicate offence. “Where is the predicate offence?” the court asked. It said the ED had been overreaching its powers when Raju said the predicate offence was an alleged multi-crore scam and that the agency had done “nothing wrong”.
Senior advocates Kapil Sibal and Mukul Rohatgi, who represented TASMAC and its employees, argued that ED overstepped its mandate by cloning mobile phones and seizing personal devices without due process. Sibal urged the court to ensure that no data extracted from the devices is used.
The Supreme Court last month refused to entertain the Tamil Nadu government’s plea to transfer the case against ED’s raid on TASMAC and its subsequent search and seizure operations from the Madras high court.
The high court had held that ED was within its powers to conduct raids and searches. It added that the TASMAC employees’ claims of their fundamental rights being breached were unsustainable. The high court said minor inconveniences cannot be allowed to disrupt a legitimate probe.
Last week, the ED questioned TASMAC’s managing director, S Visakan. On March 13, the ED said that it had found irregularities of ₹1,000 crore, incriminating data related to transfer postings, transport, bar licence tenders, indent orders favouring a few distillery companies, and an excess charge of ₹10-30 per bottle.