CJI Gavai tells ED to stop proceedings in PMLA probe, says ‘crossed all limits’

May 22, 2025 by News Desk

The Supreme Court on Thursday sharply criticized the Enforcement Directorate (ED) for overstepping its bounds and violating federal principles in its investigation into alleged corruption in Tamil Nadu’s liquor licensing. The raids, which targeted state-run TASMAC outlets in March and again last week, were suspended by the court.

“You may investigate individuals, but not entire corporations. The ED is crossing all limits,” said a visibly displeased Chief Justice BR Gavai, who led the bench. The court issued a notice to the ED and stayed further proceedings until after the summer recess.

The Tamil Nadu government, run by the DMK, had approached the apex court to challenge a Madras High Court order from April 23 that had allowed ED action. The state contended that the ED’s raids on TASMAC — the Tamil Nadu State Marketing Corporation, which holds monopoly rights over liquor distribution — infringed on its administrative autonomy.

Senior advocate Kapil Sibal, appearing for the state, informed the court that the ED had seized and cloned several mobile phones during the March 14 and May 16 raids. He argued this amounted to invasive and unjustified action.

In March, the ED claimed it uncovered irregularities in TASMAC’s operations, including unaccounted cash amounting to ₹1,000 crore. The agency also cited “incriminating” evidence related to corporate appointments, liquor transport tenders, and inflated pricing — alleging surcharges of ₹10 to ₹30 per bottle were imposed with the involvement of TASMAC officials.

Ten more locations were searched under the Prevention of Money Laundering Act (PMLA) last week, with the ED claiming it found manipulated data indicating rigged tenders.

Tamil Nadu Excise Minister S Muthusamy hit back, accusing the ED of harassing officials as part of a politically motivated vendetta. He insisted the agency had uncovered no concrete proof of wrongdoing and reaffirmed the state government’s support for its officials.

The DMK welcomed the Supreme Court’s intervention. Former Rajya Sabha MP RS Bharathi told PTI the ruling was a “blow to the BJP’s attempts to malign the Tamil Nadu government.”

The political backdrop to the controversy is significant, with Assembly elections looming next year. The opposition BJP, whose ties with the AIADMK have fluctuated, has repeatedly accused the DMK of deep-rooted corruption. Former BJP state president K Annamalai called Minister V Senthil Balaji the “kingpin” of the alleged liquor scam, claiming corruption ran into ₹1,000 crore. Balaji has denied all allegations, maintaining that TASMAC’s operations are fully transparent and regulated.

“This is all based on procedure — we calculate purchase orders based on past averages. No special favors are given,” Balaji said in response to the allegations.