In a significant judicial intervention, the Supreme Court of India has sharply criticized the Enforcement Directorate (ED) for conducting raids at the headquarters of the Tamil Nadu State Marketing Corporation (TASMAC). The apex court has also stayed the ED’s ongoing probe into the alleged ₹1,000 crore money laundering case linked to TASMAC.
A bench comprising Chief Justice of India DY Chandrachud and Justice Augustine George Masih observed that the ED’s actions appeared to breach constitutional boundaries and the federal structure of governance. The Court raised serious concerns about the agency’s decision to target a government-owned corporation rather than individual officials allegedly involved in the wrongdoing.
“How can a criminal case be made out against the corporation itself? Action should be taken against individuals if needed. Your ED is crossing all limits,” remarked CJI Gavai, questioning the legal foundation of the central agency’s involvement.
The bench issued a notice to the ED in response to a petition filed by the Tamil Nadu government, which challenged the Madras High Court’s decision allowing the probe to continue. While staying the proceedings, the Court also demanded clarity on the predicate offence that would justify ED’s jurisdiction under the Prevention of Money Laundering Act (PMLA).
“Where is the predicate offence? There are already FIRs against individual officers. Why is ED going after the corporation itself?” the Court asked, instructing the agency to submit an affidavit explaining its actions.
The case stems from raids conducted by the ED from March 6 to 8, 2025, at TASMAC’s Chennai headquarters. The central agency alleges that TASMAC officials were involved in large-scale corruption, including overpricing liquor bottles, manipulating tenders, and accepting bribes—irregularities that reportedly led to financial losses exceeding ₹1,000 crores.
ED’s investigation is said to be based on 41 to 46 FIRs filed over the years by Tamil Nadu authorities themselves against TASMAC officials. However, the DMK-led state government argues that ED has no jurisdiction over a matter already being handled at the state level and has accused the central agency of violating due process.
Senior advocates Kapil Sibal and Amit Anand Tiwari, appearing for the state, emphasized that the state government had proactively filed multiple FIRs since 2014 and that ED’s sudden involvement in 2025 was excessive and intrusive.“They raided the corporation’s office and seized phones. This is a clear breach of privacy,” Sibal said.
Representing TASMAC, Senior Advocate Mukul Rohatgi added, “All phones were wiped. Is there no concept of privacy anymore?” questioning the ED’s methods.
The Supreme Court’s decision to halt the ED’s proceedings marks a pivotal moment in the ongoing tension between central investigative agencies and state governments, especially concerning jurisdiction and the constitutional distribution of powers.
While the ED, represented by Additional Solicitor General SV Raju and Special Counsel Zoheb Hossain, has been asked to respond formally, the matter is likely to spark broader debates about the role and reach of central agencies in state affairs.
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