The Enforcement Directorate (ED) has defended its decision to conduct a search at the Tamil Nadu State Marketing Corporation (TASMAC) head office, stating that it had valid "grounds to believe" that evidence related to the proceeds of crime was present at the premises. This statement was made before the Madras High Court on Wednesday by Additional Solicitor General (ASG) SV Raju, who appeared on behalf of the central agency.
The case came before a division bench comprising Justices SM Subramaniam and K Rajasekaran, after the petitioners argued that the ED's search operation was carried out with the intention of damaging the reputation of certain influential individuals connected to the case, especially as the Tamil Nadu state elections were approaching.
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During the hearing, ASG SV Raju clarified that the search was not arbitrary but was based on several First Information Reports (FIRs) filed by the Tamil Nadu police. These FIRs highlighted serious allegations against TASMAC officials, including accepting bribes, inflating the marked prices of liquor bottles, and manipulating the postings and transfers of employees. He pointed out that these were not mere rumors but formal complaints recorded by the state police.
The court questioned why the ED chose to search the TASMAC headquarters specifically, even though the complaints were reported from various other locations. In response, the ASG explained that the nature of these complaints was such that material evidence related to the financial irregularities was likely to be found at the head office itself.
"The ED is empowered under Section 17 of the Prevention of Money Laundering Act (PMLA) to conduct searches if it has reasons to believe that the proceeds of crime or material connected to the crime are present at a particular place."
He further submitted that the success or failure of a search in terms of recovery does not determine the legality of the search. According to him, even if no material is ultimately found, it cannot be assumed that the search was unwarranted. He highlighted that in this particular case, the ED’s investigation at TASMAC’s head office had revealed irregularities amounting to nearly Rs 1,000 crore.
"Suspicion alone is enough to justify a search. The court does not have the authority to intervene or scrutinise the choice of location for the search," the ASG emphasized.
On the other hand, Advocate General PS Raman, representing the Tamil Nadu government, raised concerns regarding the ED’s approach. He pointed out that the state was not informed about the searches in advance. Furthermore, he stated that the FIRs, which the ED cited as the basis for the search, were never shared with the state authorities, not even in a redacted form.
The Advocate General also highlighted the treatment of employees during the search operation. According to him, staff members, including women, were kept waiting in the office for long hours without explanation. He added that female employees were questioned without the presence of female officers from the ED, which raised further concerns.
After hearing the arguments from both sides, the court decided to adjourn the matter. The hearing is scheduled to continue tomorrow, April 17.
