TASMAC Case: Madras High Court Dismisses Tamil Nadu Govt's Pleas Against ED Raids

The Madras High Court dismissed writ petitions filed by the Tamil Nadu government and the Tamil Nadu State Marketing Corporation (TASMAC) on Wednesday, refusing to declare the Enforcement Directorate's (ED) search and seizure operation at TASMAC's headquarters in Chennai between March 6 and 8, 2025, illegal.

A division bench comprising Justices S.M. Subramaniam and K. Rajasekar ruled that the validity of the reasons behind the ED's action, which was based on multiple First Information Reports (FIRs) of corruption registered by the Directorate of Vigilance and Anti Corruption (DVAC), could not be challenged at this preliminary stage of the investigation.

The court further stated that it could not delve into allegations of political motivation behind the ED's actions. The bench emphasized the necessity of allowing the ED to investigate potential money laundering, as economic offences are detrimental to the public interest. The justices added that the public would ultimately be the best judge of any political motives.

TASMAC had filed two separate writ petitions on March 19, seeking to declare the ED's operation illegal and to prevent the agency from allegedly harassing its employees during the investigation. The Tamil Nadu government and TASMAC jointly filed a third petition arguing that the ED's searches without the state government's consent violated the principle of federalism and demanded that the central agency obtain the state's approval before investigating money laundering cases in Tamil Nadu.

Initially, a division bench of Justices M.S. Ramesh and N. Senthilkumar heard the petitions and expressed reservations about the joint plea. Subsequently, this bench recused itself from the case, and it was transferred to the bench of Justices Subramaniam and Rajasekar. The state government then amended its joint petition, seeking six alternative reliefs, including a reinterpretation of the term "person" under the Prevention of Money Laundering Act (PMLA) to exclude state government entities and limiting the obligations of state officers under the PMLA.

Senior counsel Vikas Singh and Vikram Choudhary, representing TASMAC, argued that the ED lacked the jurisdiction to conduct searches based on corruption cases against lower-level employees. Advocate General P.S. Raman, representing the state, argued that allowing unchecked ED action would undermine the federal structure and accused the agency of human rights violations during the searches.

Additional Solicitor General S.V. Raju, representing the ED, refuted the allegations of harassment and asserted the legality and necessity of the search operation to uncover money laundering activities related to an alleged ₹1000 crore scam within TASMAC involving bottling companies.

The court had reserved its verdict on Monday after hearing extensive arguments from both sides. The dismissal of the petitions now allows the ED to continue its investigation into the alleged irregularities at TASMAC.