Read Time: 07 minutes

Synopsis

Challenging the Enforcement Directorate’s (ED) recent searches at Tamil Nadu State Marketing Corporation (Tasmac) headquarters, the State government and Tasmac have jointly approached the Madras High Court, alleging procedural violations and an attempt to malign the State’s image.

A division bench of Justices M.S. Ramesh and N. Senthilkumar, on Wednesday, agreed to expedite the hearing of the case after State Government Pleader Edwin Prabakar sought an urgent listing of the matter. The bench indicated that the writ petitions would be heard on Thursday, subject to their formal numbering.

Three writ petitions were filed. The first, jointly submitted by the State government and Tasmac, sought a declaration that the ED’s search operations, conducted between March 6 and March 8 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.

In an affidavit supporting the petitions, Tamil Nadu Home Secretary Dheeraj Kumar stated that Tasmac, which operates 43 depots and 4,829 retail liquor shops across the State, was subjected to an unjustified search operation. The ED officials entered Tasmac’s headquarters at Egmore on March 6 at 11:54 a.m. and continued their search until 11 p.m. on March 8, lasting nearly 60 hours.

He claimed that the search began with a procedural illegality, as Tasmac officials were not given a copy of the search authorization but were only shown the document and forced to acknowledge its contents. During the operation, ED officials allegedly recorded statements from Tasmac Managing Director S. Visakan, General Manager (Administration and Wholesale) Sangeetha, and Deputy General Manager (Purchase and Sale) M. Jothi Shankar. The three were allegedly subjected to prolonged detention and forced to answer nearly 100 questions on topics such as liquor procurement, price fixation, and bar licensing.

The affidavit further alleged that Tasmac officials were coerced into making statements under duress, which would render them legally invalid. Documents related to Tasmac’s bar tenders, transport tenders, and tenderers’ details from the last four years were seized arbitrarily. The ED allegedly conducted the search in a high-handed manner, detaining multiple employees for long hours and depriving them of basic necessities.

The ED officials also recorded panchanamas detailing the data they obtained. This included information from three mobile phones and three Gmail accounts used by Mr. Visakan, one mobile phone and one Gmail account used by Ms. Sangeetha, and data from an Oracle server. The agency also retrieved data from Mr. Shankar’s mobile phone and Gmail, along with information from four desktops at Tasmac headquarters. All the data was transferred to a hard disk.

The State government has argued 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.