The Supreme Court on Thursday stayed the money laundering investigation launched by the Enforcement Directorate (ED) against the Tamil Nadu State Marketing Corporation ( TASMAC), the state-run liquor retailer.
The top court bench lead by CJI BR Gavai also issued notices to the ED in response to petitions filed by the Tamil Nadu government and TASMAC, questioning the central agency’s authority to initiate such probes against a state entity.
The bench also questioned the central probe agency on it's raid on TASMAC and termed it as a "violation."
ED alleges that some TASMAC officials were involved in selling liquor at higher prices, cheating in the tender process, and taking bribes. These actions are believed to have caused financial losses of over Rs 1,000 crore.
SC overrules Madras HC ruling
The case reached the apex court after the CM Stalin-led state government and TASMAC challenged a Madras High Court order dated April 23, which had dismissed their pleas and permitted the ED to proceed with its probe. The ED had conducted searches at multiple TASMAC premises on March 6 and 8.
In the earlier HC ruling, the central probe agency's actions were defended as being in the interest of the public, with the court observing that money laundering constituted a crime against the nation. The court had rejected arguments from the state government and TASMAC that their officials were harassed during the ED’s searches, calling those claims “inadequate and highly disproportional” in light of the alleged financial irregularities.
The High Court had further dismissed the state's argument that ED action was driven by political vendetta. It stated that courts were not platforms to “examine political forces at play” and warned against setting a precedent where all investigative actions were challenged as harassment.
Moreover, the court found no merit in the argument that the ED needed the state government’s permission to conduct such raids, terming it “completely illogical and bereft of conscience.” It had maintained that the complaints and allegations against TASMAC were grave and required deeper scrutiny.
The top court bench lead by CJI BR Gavai also issued notices to the ED in response to petitions filed by the Tamil Nadu government and TASMAC, questioning the central agency’s authority to initiate such probes against a state entity.
The bench also questioned the central probe agency on it's raid on TASMAC and termed it as a "violation."
ED alleges that some TASMAC officials were involved in selling liquor at higher prices, cheating in the tender process, and taking bribes. These actions are believed to have caused financial losses of over Rs 1,000 crore.
SC overrules Madras HC ruling
The case reached the apex court after the CM Stalin-led state government and TASMAC challenged a Madras High Court order dated April 23, which had dismissed their pleas and permitted the ED to proceed with its probe. The ED had conducted searches at multiple TASMAC premises on March 6 and 8.
In the earlier HC ruling, the central probe agency's actions were defended as being in the interest of the public, with the court observing that money laundering constituted a crime against the nation. The court had rejected arguments from the state government and TASMAC that their officials were harassed during the ED’s searches, calling those claims “inadequate and highly disproportional” in light of the alleged financial irregularities.
The High Court had further dismissed the state's argument that ED action was driven by political vendetta. It stated that courts were not platforms to “examine political forces at play” and warned against setting a precedent where all investigative actions were challenged as harassment.
Moreover, the court found no merit in the argument that the ED needed the state government’s permission to conduct such raids, terming it “completely illogical and bereft of conscience.” It had maintained that the complaints and allegations against TASMAC were grave and required deeper scrutiny.
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