Tamil Nadu HC directs ED not to proceed further in TASMAC probe case

In a temporary relief to Tamil Nadu State Marketing Corporation (TASMAC), the Madras high court on Thursday directed the Enforcement Directorate (ED) not to proceed further with its searches at the state-run liquor retailer’s headquarters in the city till the next hearing on March 25.

The order was passed by a bench of justices MS Ramesh and N Senthilkumar while hearing a joint petition filed by the Tamil Nadu government and TASMAC, contending that ED searches, launched earlier this month, were excessive and beyond its jurisdiction.

The petition stated that the liquor retailer was not given the Enforcement Case Information Report (ECIR) or told what the predicate offence was. The petition also alleged that ED barged into the TASMAC premises and violated the rights of its employees, including their privacy by seizing their mobile phones. The TASMAC staff, including women, were detained for more than 60 hours over three days where they were only allowed to go home at night, the petition alleged.

Senior counsel Vikram Choudhry, appearing for TASMAC, submitted the raids by the central agency ought to be transparent. They cannot enter into any premises, conduct search and seize digital devices. This was a total invasion of privacy, he added.

“Some of the people have been made to sit for 60 hours. Some one them, from morning to 1 in midnight; (they were) 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 TASMAC’s counsel alleged.

Referring to section 17 (1) of Prevention of Money Laundering Act (PMLA), he said search and seizure was to be conducted only when there was reason to believe money laundering offence was committed.

Raman also said he will produce the CCTV footage with timings to back the claims.

However, additional solicitor general (ASG) ARL Sundaresan, representing ED, strongly refuted the allegations.

While giving an oral direction to ED, the high court directed the central agency to produce copies of FIR and ECIR along with any other materials which it relied upon against TASMAC. It also asked ED not to take any coercive action against TASMAC officials for the time being.

“ASG takes notice and seeks time to file counter affidavit. The ASG is also called upon to produce FIR relating to the predicate offence as well as ECIR before this court along with any other materials they may rely on by March 24,” the order said.

The federal agency conducted searches on March 6 and 8 at TASMAC headquarters in Chennai and subsequently on March 13 said that they found financial irregularities amounting to ₹1000 crore. Incriminating data related to transfer postings, transport tender, bar licence tender, indent orders favouring few distillery companies, excess charge of ₹10-30 per bottle by TASMAC were recovered during the raids, ED had said.

“Let the ED investigate. But let them do it as per process. We don’t want our employees to be harassed. The main crux of our petition is that TASMAC staff were harassed. The ED held them for 60 hours and let them go home only at night for 6 hours,” said DMK spokesperson and advocate A Saravanan told HT.

“The ED gets jurisdiction only if a predicate offense is registered. They have not shown what the offence is. The court has said that ED’s power cannot be exercised in an arbitrary way. And asked them not to take coercive steps until the next hearing,” he added.