Can't Keep Entire TASMAC Office Under Control For Hours: Madras HC Slams ED's 'Alarming' TASMAC Raids

The Madras High Court on Thursday heard the writ petitions moved by TASMAC (Tamil Nadu State Marketing Corporation Limited) to stay PMLA proceedings by the Enforcement Directorate and gave its disapproval over detaining TASMAC employees without informing them of the reasons for the search and raids.

Madras HC Slams ED

According to Bar and Bench website, a bench comprising Justices MS Ramesh and N Senthilkumar said, "Is it not alarming situation? We can understand if you have specific input. But can you keep entire office under your control for hours together. If you have reason to believe, should you not convey it them? That is their grievance, that they do not know (why ED searched and raided the TASMAC premises)," the Bench said.

The remarks came after TASMAC, a state-run liquor distribution corporation, approached the court, alleging that the ED's actions were excessive and beyond its jurisdiction. TASMAC claimed that ED officials entered its premises without proper authorization, violated employees' rights, and seized their mobile phones, infringing on their privacy.

"Some of the people have been made to sit for 60 hours! Some one them, from morning to 1 in midnight, allowed to go home for 6 hours - that too women - and then asked to come back. This process allowed to go on for three days," the advocate appearing for the TASMAC said.

"Female employees were allowed to leave at 1 am, provided they come back at 8 or 9 in the morning," Advocate General PS Raman, who appeared for the Tamil Nadu government, added.

ED and ASG's Arguments

The ED's counsel defended the agency's actions, asserting, "No one was kept captive; everyone was allowed to go and come back." However, the court questioned the legality of the raids, asking, "You can't barge into my place under Section 17! You have to show you are authorized because you are not the director. You have to show that it is directly connected to four contingencies. You are taking everything, mobile phones! Is it not (violative) of the right to privacy?"

The Additional Solicitor General (ASG), representing the ED, countered the allegations, stating, "It is strongly disputed that they were not allowed to go back. Everybody was allowed to go back." The court, however, noted, "If a few officials filed this writ petition, we can understand. Their primary contention is that you have not permitted A to Z-right from the watchman."

The court directed the ED to file its response to TASMAC's petition and orally instructed the agency to refrain from taking any coercive action against TASMAC officials for the time being. The order stated, "ASG takes notice and seeks time to file a counter. The ASG is also called upon to produce the FIR relating to the predicate offence as well as the ECIR before this court, along with any other materials they may rely on."

The matter is scheduled for further hearing on March 24.

The raids, conducted on March 6, 2025, targeted TASMAC's headquarters in Chennai, as well as several distilleries and bottling units across Tamil Nadu. The ED alleged financial irregularities exceeding ₹1,000 crore, citing issues such as tender manipulations, unaccounted cash transactions, and overpricing at retail outlets.