"Something said in ED's favor hardly reported," ASG Raju before Supreme Court

The Supreme Court was told today by Additional Solicitor General SV Raju, appearing for the Enforcement Directorate that observations made by the court favoring the government agency are hardly reported in media.

"When something is said in our favour it is hardly reported..that's my grievance..", ASG Raju told a Chief Justice of India led bench which was hearing the petition filed by Tamil Nadu's plea challenging the Enforcement Directorate’s (ED) searches at the Tamil Nadu State Marketing Corporation (TASMAC) Headquarters.

Notably, this statement was made by the government law officer when the CJI said that on the last hearing he had said something, and it was reported everywhere.

It is to be noted that in August, referring to the Supreme Court's recent criticism of its actions, Enforcement Directorate had told the Supreme Court that the views expressed by it percolate through judiciary. On the ASG Raju's submission that he could convince court about ED's actions on the TASMAC searches, the CJI had remarked, "We do not hold anything against anyone...". Hearing this, ASG Raju had submitted, "I am sorry to say this, but the perception of this court percolates..not only media but also judiciary..".

ASG had made this statement with regard to Supreme Court recent observations made while staying ED proceedings against TASMAC, questioning the agency’s authority to initiate proceedings against a government-owned corporation. CJI Gavai had in May observed, “You may register against an individual, but a Corporation? How can you register? Your ED is passing all limits!” Additional Solicitor General Raju had then too defended the agency’s actions saying, “We have done nothing wrong. There was cash recovered. I will show. This is a Rs. 1000 crore fraud.”

The Bench, however, had questioned the very basis of the ED’s involvement. “Where is the predicate offence?” asked CJI Gavai, reiterating the requirement of a scheduled offence for ED’s jurisdiction under the Prevention of Money Laundering Act (PMLA). The Court has issued notice to the ED and directed the matter to be taken up after the summer vacation, with interim relief granted to Tamil Nadu through a stay on the proceedings.

Tamil Nadu filed an SLP through Advocate Misha Rohatgi after the impugned judgment was passed by Madras High Court on April 23, 2025, dismissing the petitions filed by the State government and Tamil Nadu State Marketing Corporation (Tasmac) challenging the Enforcement Directorate’s (ED) searches at its headquarters between March 6 and 8, 2025.

State government has alleged procedural violations and an attempt to malign the State’s image. However, the division bench of Justices S.M. Subramaniam and K. Rajasekar noted that in the present case, a mere search was conducted and the petitioners "with complete whimsical arguments" approached it seeking to declare the search itself as illegal.

High Court had stressed, "Can a few inconveniences which is product of ‘procedure established by law’ as embedded in Article 21 be equated against the economic rights of the people of this country. It is the mandate of the Constitution to secure to all its citizens Economic Justice. And legislations such as PMLA serve this object". High Court also rejected the state's argument that political motive was at play and search was based on political vendetta.

Three writ petitions were filed before the high court. The first, jointly submitted by the State government and Tasmac, sought a declaration that the ED’s search operations at the Tasmac headquarters in Chennai, were unconstitutional as they lacked the State’s consent, violating the principle of federalism. It also requested the ED to disclose a copy of the Enforcement Case Information Report (ECIR), which formed the basis of the search.

The other two petitions, filed solely by Tasmac, challenged the legality of the search and sought protection for its employees from alleged harassment under the guise of investigation. Tasmac also sought a court order directing the ED to furnish a copy of the search authorization issued by Joint Director Piyush Yadav and an interim injunction to prevent further intimidation of its officials.

The State government had argued before high court that since no cash was recovered during the search, there were no “proceeds of crime” involved, and the ED had no authority to invoke the PMLA. The Home Secretary further alleged that the ED was conducting a “roving inquiry” into Tasmac’s affairs without any reasonable basis or material evidence suggesting financial wrongdoing. He also accused the ED of attempting to malign the reputation of both Tasmac and the Tamil Nadu government by making baseless allegations and misrepresenting facts.

Case Title: The State of Tamil Nadu vs. Directorate of Enforcement

Hearing Date: October 14, 2025

Bench: CJI Gavai, Justice Chandran