'ED crossing all limits,' SC's scathing remarks on action in TN liquor scam

New Delhi: The Supreme Court made scathing observations on Thursday, saying that the Enforcement Directorate (ED) was crossing all limits as it stayed the investigation, raid and questioning of the officials of the Tamil Nadu State Marketing Corporation (TASMAC) in an alleged scam of Rs 1,000 cr.

"Your ED is crossing all limits. How can your office raid a corporation? The ED is crossing all limits. You are totally violating the federal structure of the country," a bench of Chief Justice of India B R Gavai and Justice Augustine George Masih told Additional Solicitor General S V Raju, appearing for the central agency.

The court was hearing a plea filed by Tamil Nadu government challenging the raids conducted by the probe agency at the premises of its state-run liquor retailer TASMAC.

Senior advocate Kapil Sibal, appearing for the Tamil Nadu State, said that the state itself has filed 41 FIRs against TASMAC employees over the allegations of impropriety.

"The ED, however, entered the scene in 2025 and was raiding the Headquarters and had taken the MD into custody," Sibal contended.

Senior advocate Mukul Rohatgi, also appearing for for the State, said that the ED has taken the cloned copies of the phones of the TASMAC officials, violating their privacy.

"There is something called as privacy, and there are guidelines in this regard of this court," he submitted.

Raju, however, claimed that it was a case of Rs 1000 crore fraud.

The court, nonetheless, questioned him and asked, "What was the predicate offence?"

The central agency conducted various raids in March, and during the raids, allegations surfaced that distillery companies siphoned off the alleged amount in the form of unaccounted cash and the same was used to obtain more supply orders from TASMAC.

The court issued notice to the ED and fixed the matter for further hearing after vacation.

The Tamil Nadu government filed a plea in the Supreme Court questioning the validity of the raids conducted during the ED probe at the premises of its state-run liquor retailer, Tamil Nadu State Marketing Corporation.

The Madras High Court had on April 23, 2025 dismissed the pleas, giving green signals for the ED's actions.

The HC allowed it to proceed with its action under the Prevention of Money Laundering Act (PMLA).

It had rejected the allegations made by TASMAC that its employees and officials were harassed by ED while conducting searches at the State agency's headquarters in Chennai.

The HC had said that it was a matter of procedure for employees to be detained during raids and surprise checks, to prevent the destruction of evidence. The allegations of violation of employees' fundamental rights appeared to be an afterthought, the court said.

Earlier on April 8, the Tamil Nadu government and the state's marketing corporation TASMAC withdrew from the Supreme Court the pleas to transfer from the Madras High Court to another high court their petitions against the recent ED action on the state-run liquor retailer.

The Tamil Nadu government had on April 4 approached the apex court seeking transfer of its petition against the recent searches by ED on the state-run liquor retailer from the Madras HC to another HC outside the state.

The top court had on April 8 allowed the TN government and TASMAC to withdrew the pleas from it, dismissing them as withdrawn.

On March 20, the Madras HC had in its decision directed the ED not to proceed further in connection with its raids at the TASMAC headquarters in the city.