SC, HC rap TN over pleas against ED’s raids on TASMAC

The Tamil Nadu government and its liquor distribution arm, TASMAC, on Tuesday found themselves at the receiving end of stern observations from both the Supreme Court and the Madras high court over their handling of petitions challenging Enforcement Directorate (ED) searches, in a day marked by legal setbacks and judicial reproach.

The Supreme Court, in the afternoon, refused to entertain the state’s plea to transfer the case from the Madras high court, with a bench led by Chief Justice of India Sanjiv Khanna observing: “Let it be decided there.” Meanwhile, the Madras high court bench hearing the matter rebuked the state for “disrespect” and “insulting” the court, accusing it of duplicity for approaching the Supreme Court “behind its back” while continuing to seek accommodation before the high court.

At the heart of the legal and political storm is the ED’s search and seizure operation at the headquarters of TASMAC, Tamil Nadu’s state-run liquor distribution corporation. ED alleges a multi-crore scam involving kickbacks, irregularities in procurement and possible money laundering linked to TASMAC operations. The Tamil Nadu government, led by chief Minister MK Stalin, has strongly pushed back, accusing the BJP-led central government of misusing investigative agencies to settle political scores.

Hearing transfer petitions filed by the state and the Tamil Nadu State Marketing Corporation (TASMAC), the Supreme Court made it clear it was disinclined to intervene. The state argued that since similar petitions concerning the seizure of electronic devices were pending before the top court, THE TASMAC matter should also be moved there.

But the bench, also comprising justice Sanjay Kumar, noted that those pending cases pertained to journalists and involved a higher threshold of privacy concerns. Solicitor general Tushar Mehta, appearing for ED, opposed the transfer, calling it a textbook case of “forum shopping,” and pointed out that such arguments were never raised before the high court.

Faced with the apex court’s clear stand, senior advocate Mukul Rohatgi, appearing for the state, chose to withdraw the transfer plea. The court allowed the withdrawal, and the matter remained with the Madras high court.

Later in the day, the Madras high court took strong exception to the state’s conduct. A bench of justices SM Subramaniam and K Rajasekar reprimanded the government for its inconsistent approach and accused it of wasting judicial time.

“Why did you consent to the hearing if your real intention was to seek transfer? Even this morning, when you requested a pass over, you conveniently kept quiet about the transfer petition. There are so many matters pending here and our time is wasted. Why are you disrespecting and insulting the High Court?” the bench asked.

The court noted that advocate general PS Raman had repeatedly sought time to confirm the government’s position -- first to check the status of the transfer petition in the Supreme Court, and later to clarify whether the state would also withdraw its case from the high court.

Even after the transfer plea was formally withdrawn from the apex court, the government did not immediately clarify its position before the high court. “The state cannot go to all places and then just come here and withdraw the plea. Since morning, you (state) are holding the court on hold,” the bench told Raman.

Interfering at this stage, additional solicitor general (ASG) SV Raju, appearing for ED in the high court, claimed that the withdrawal from the Supreme Court came only after the bench there expressed its unwillingness to entertain the case. Raju insisted that the state should file a formal affidavit explaining the sequence of events, rather than relying on oral submissions. He said ED would file a counter-affidavit detailing the circumstances of the state’s withdrawal.

ASG ARL Sundaresan, appearing for the Union government, supported and urged the high court to continue hearing TASMAC’s challenge to the ED’s searches regardless of the state’s stance.

While advocate general Raman informed the bench that TASMAC would continue to pursue its petition, the Tamil Nadu government’s own position remained unclear till the end of the hearing.

Appearing for TASMAC, senior advocate Vikram Chaudhary urged the high court to declare ED’s search and seizure actions illegal, arguing that the agency had violated the fundamental rights of TASMAC employees by detaining them without due process and by seizing their mobile phones and other personal devices.

Chaudhary contended that while the Prevention of Money Laundering Act (PMLA) empowers ED to search and seize, the precondition of “reason to believe” must be rooted in objective facts and not in arbitrary judgments of individual officers.

The high court has scheduled the next hearing for April 9 to continue with TASMAC’s arguments.