The Supreme Court on Thursday slammed the Enforcement Directorate (ED) for “crossing all limits” and violating the federal structure of governance, while staying its money laundering probe against Tamil Nadu’s state-run liquor retailer TASMAC.
A bench led by Chief Justice D.Y. Chandrachud and Justice Augustine George Masih issued notice to the ED on a petition filed by the Tamil Nadu government and TASMAC. The petition challenges the ED’s raids over alleged corruption in the allotment of liquor shop licences.
“Your ED is crossing all the limits,” the Chief Justice told Additional Solicitor General S.V. Raju, who was representing the ED. He further questioned, “How can you raid a state-run body like TASMAC?”
Senior advocates Kapil Sibal and Amit Anand Tiwari, appearing for the state and TASMAC, argued that the ED had no jurisdiction since TASMAC is not accused in any of the 41 FIRs registered between 2014 and 2021 regarding liquor licence irregularities. In many of those cases, TASMAC is the complainant, not the offender.
The petition also criticized the ED’s 60-hour raid on TASMAC’s Chennai headquarters in March 2025, stating it violated constitutional principles and amounted to a “fishing enquiry” without any solid grounds. It added that the ED failed to show the “reasons to believe” required for such action under the Prevention of Money Laundering Act (PMLA).
The ED defended its actions, saying the case involved over Rs 1,000 crore in corruption and insisted it was acting within its powers. However, the court stayed the probe for now.
This case adds to the growing criticism of the ED, which has been accused by opposition parties and several court benches of misusing the PMLA to target political rivals. The Tamil Nadu government argued that the raids represent a clear violation of federal principles and the state’s right to govern its institutions.
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