The court said the ED had crossed all limits and violated the Constitution by initiating action against a government body.
Published May 22, 2025 | 12:44 PM ⚊ Updated May 22, 2025 | 12:44 PM
Supreme Court
Synopsis: In a major development, the Supreme Court has issued an interim stay on the Enforcement Directorate’s investigation into the alleged irregularities involving TASMAC.
The Supreme Court on Thursday, 22 May, ordered an interim stay on the Enforcement Directorate’s action against the Tamil Nadu State Marketing Corporation (TASMAC).
The Bar and Bench reported that the Bench of Chief Justice BR Gavai, also comprising Justice Augustine George, came down heavily on the ED. The court said the ED had crossed all limits and violated the Constitution by initiating action against a government body.
The apex court made the observation in a Tamil Nadu government petition challenging the Madras High Court’s decision to allow the central agency to continue its probe into the alleged ₹1,000 crore irregularities in TASMAC.
Issuing the stay order, the court asked ED to explain the predicate offence. “When there are FIRs against officers, why is the ED coming here? Where is the predicate offence?? ED put an affidavit,” the court said.
Appearing in the court on behalf of ED, Additional Solicitor General SV Raju said he will file an affidavit.
Following allegations of irregularities by officials, the ED searched the TASMAC headquarters between 6 and 8 March. The officials were accused of overpricing liquor bottles, manipulating tenders, and bribery.
The Tamil Nadu government accused the ED of an overreach of its powers. It termed the searches illegal. The government approached the Supreme Court after the High Court turned down its petition in favour of the ED.
Subsequently, on 8 April, the Supreme Court also rejected the state government’s petition but allowed it to approach the Madras High Court again.
The Tamil Nadu government filed another petition in the Madras High Court, seeking an order halting the ED’s actions. However, the High Court once again refused to grant a stay on 23 April, prompting the state to move the Supreme Court for a second time.
Representing the Tamil Nadu government, senior advocate Kapil Sibal argued that 41 cases related to TASMAC were filed between 2014 and 2021, but the ED intervened only in 2025. He pointed out that the agency had even cloned data from the seized mobile phones.
In response, Chief Justice Gavai questioned how the ED could file a case against a government-run corporation, stating that while the agency can proceed against individuals, proceeding against an institution raises serious legal concerns. He further remarked that the ED had crossed all limits.
ED’s counsel Raju argued that the alleged corruption involved sums as high as ₹1,000 crore. However, the Chief Justice retorted, questioning the absence of any identified “predicate offences” and reiterated that the ED had indeed exceeded its jurisdiction.
Following the arguments, the Supreme Court issued a stay on all forms of investigation by the ED into the TASMAC case and issued a notice to the agency seeking a response. The matter is scheduled to be heard after the court’s summer vacation.
(Edited by Majnu Babu).
