The Madras High Court clarified that it has not passed any order restraining the Enforcement Directorate (ED) from taking action in the case involving the Tamil Nadu State Marketing Corporation Ltd (TASMAC). This clarification came during a hearing before a division bench comprising Justice S.M. Subramaniam and Justice K. Rajasekar.
The issue was raised by Special Public Prosecutor for the ED, Advocate N. Ramesh. He sought clarity on whether an earlier oral direction given by Justice M.S. Ramesh and Justice N. Senthilkumar was still in effect. The bench responded, stating clearly:
“We have to go by whatever is there in the order.”
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This remark came after the Advocate General (AG) raised objections, stating that an oral undertaking had been given by the respondents not to proceed with the investigation. According to the AG, this undertaking was not just until the next hearing but extended throughout the proceedings. However, the court emphasized that what mattered was the content of the written order, not verbal assurances.
The court has scheduled the matter for further arguments on the next day.
The bench also addressed a significant concern about being kept uninformed about the transfer petitions filed by the State and TASMAC before the Supreme Court. The court expressed its displeasure, stating that such actions appeared to undermine the authority of the High Court. It was later informed that the transfer petitions had been withdrawn. TASMAC indicated that it would now continue to pursue the case before the High Court.
However, the Advocate General requested more time to get instructions from the State government on whether it intended to withdraw the petition entirely or continue pursuing it.
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Senior Advocate Vikram Chaudhari, representing TASMAC, argued that although no arrests had been made in the case, the provisions related to search and seizure under Section 17 of the Prevention of Money Laundering Act (PMLA) had not been followed.
He focused on the legal principle of “reason to believe” which, according to various Supreme Court decisions, must be based on tangible material and not on assumptions. He stressed that any such belief must be recorded in writing and properly communicated.
“Reasonable belief cannot be on whims and fancies of the officers. Search can result in a great humiliation. You're scarred. You live in a society. If the search is not reasonable, your right under Article 21 is affected,”
— Senior Advocate Vikram Chaudhari“If there is even an iota of doubt in the process, the court’s power of judicial review comes into play,” he added.
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Chaudhari further pointed out that if these procedural safeguards were not followed properly, it could raise serious constitutional issues. In such a case, the court had the right to exercise judicial review.
The matter concerns a petition filed by TASMAC against the Directorate of Enforcement.
Case Title: Tamil Nadu State Marketing Corporation Ltd (TASMAC) v. Directorate of Enforcement
Case Number: WP 10348/2025
