Supreme Court Halts ED Probe in TASMAC Case, Says Agency ‘Crossing All Limits’

In a major legal development, the Supreme Court of India on Thursday strongly criticized the Enforcement Directorate (ED) for conducting raids at the headquarters of the Tamil Nadu State Marketing Corporation (TASMAC) and stayed all further proceedings in the alleged ₹1,000 crore money laundering case.

CJI Says ED “Crossing All Limits”

The bench comprising Chief Justice of India BR Gavai and Justice Augustine George Masih came down heavily on the ED, questioning its authority to launch a criminal probe against a state-run government body. “How can this offence be against the corporation? Your ED is crossing all limits,” remarked CJI Gavai during the hearing.

The Supreme Court issued notice to the ED in response to a petition filed by the Tamil Nadu government challenging the Madras High Court’s order that had permitted the continuation of the ED’s investigation.

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Supreme Court Questions Predicate Offence

Granting an interim stay on ED’s proceedings, the apex court demanded clarification from the central agency regarding the predicate offence that justified the initiation of the money laundering probe.

“Where is the predicate offence? When there are FIRs against individual officers, why is the ED investigating the corporation?” asked the Court, instructing the ED to submit an affidavit.

Background: ED Raids on TASMAC Headquarters

The controversy stems from raids conducted by the ED from March 6 to March 8, 2025, at TASMAC’s Chennai headquarters. The central agency alleged that TASMAC officials were involved in liquor overpricing, tender manipulation, and bribery, resulting in financial irregularities exceeding ₹1,000 crores.

The ED claimed it acted based on over 40 FIRs registered by the state government or TASMAC itself against various officials dating back to 2014.

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Tamil Nadu Government and TASMAC Cry Foul

The DMK-led Tamil Nadu government and TASMAC argued that the ED’s actions were unconstitutional and a violation of the federal structure. Representing the state, Senior Advocate Kapil Sibal pointed out that the State itself had taken legal action through multiple FIRs and questioned the ED’s delayed intervention in 2025.

Sibal also criticized the ED’s handling of digital privacy, claiming, “Phones were taken… everything taken. This is an issue of privacy.”

Phones Wiped Out, Says Rohatgi

Senior Counsel Mukul Rohatgi, appearing for TASMAC, added that all confiscated phones had been “wiped out”, raising concerns over privacy and procedural violations. “Is there something such as privacy anymore?” Rohatgi asked the Court.

Next Steps: ED Asked to Respond

The Supreme Court has now granted a stay on the ED’s proceedings and asked the agency to submit a detailed response justifying its investigation. The matter will be taken up again after the ED files its affidavit.

ASG SV Raju and Special Counsel Zoheb Hossain appeared on behalf of the ED, while Senior Counsel Rohatgi and Advocate Mishra Rohatgi represented TASMAC.