The Supreme Court on Thursday stayed the Enforcement Directorate’s money laundering investigation against Tamil Nadu’s state-run liquor retailer TASMAC, accusing the agency of “crossing all limits” and undermining the federal structure of governance. The sharp rebuke came from a bench led by Chief Justice B R Gavai and Justice Augustine George Masih while issuing notice to the ED on petitions filed by the Tamil Nadu government and TASMAC.
“Your ED is crossing all the limits,” the bench told Additional Solicitor General S V Raju, who appeared for the central agency. It added that the ED’s probe, launched under the Prevention of Money Laundering Act (PMLA) over alleged irregularities in granting wine shop licenses, “violates the federal concept” enshrined in the Constitution.
The central law officer tried to defend the investigation, claiming it involved corruption amounting to over ₹1,000 crore and that the agency was well within its jurisdiction. However, the bench remained unconvinced and pulled up the ED for raiding a state-run corporation. “How can you raid the state-run TASMAC?” it questioned.
Senior advocates Kapil Sibal and Amit Anand Tiwari, representing the Tamil Nadu government, told the court that the state had already registered over 40 FIRs related to liquor shop licensing since 2014. They argued that the ED’s sudden intervention through raids was an encroachment on the state’s jurisdiction.
The petitions challenged the Madras High Court’s April 23 order, which had allowed the ED to go ahead with its probe. The Supreme Court’s interim stay now puts a halt to the ED’s actions pending further hearings, setting the stage for a high-stakes federal-versus-central confrontation over investigative powers.
