The Madras High Court has raised a significant query to the Tamil Nadu government regarding the Enforcement Directorate's (ED) searches at the headquarters of the Tamil Nadu State Marketing Corporation Ltd (TASMAC). During the hearing, the court orally asked:

"Does your government and police not conduct searches?"

This question was posed by the bench of Justice SM Subramaniam and Justice K Rajasekar to Advocate General (AG) PS Raman when he argued that the ED had conducted the searches late at night and had not allowed the officers to leave the premises.

When Justice Subramaniam observed that even State agencies conduct raids, AG Raman responded by stating that, unlike the ED, the State does not conduct searches during late hours.

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Recusal of Previous Bench

This case was initially placed before a bench consisting of Justice MS Ramesh and Justice N Senthilkumar. However, they recused themselves from hearing the matter last week. Before recusing, the bench had orally advised the ED on March 20 to halt its investigation until the next hearing. The bench also questioned whether the ED had the authority to detain an entire office based on materials against certain individuals. The court further pointed out that while the ED claimed to have enough evidence, TASMAC was not provided access to those materials.

During the latest hearing, AG Raman informed the court that the State had amended its petition in response to the earlier court's directives. In its amended plea, the Tamil Nadu government sought:

• The definition of "Persons" under the Prevention of Money Laundering Act (PMLA) to exclude any authority, regulator, or officer of the Central or State government.
• A declaration that State government officers are only required to assist the ED in enforcing the Act.
• A directive restricting the ED from summoning only those officers authorized under Section 54 to assist the agency.
• A direction preventing the ED from entering State-owned corporation offices for searches and seizures under Section 17 of the Act.
• A declaration that the ED search at TASMAC was unlawful.

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In its plea filed through the Additional Chief Secretary, the Tamil Nadu government contended that the ED was conducting a "roving inquiry" without possessing substantial material. It was argued that:

State’s Argument Against ED’s Actions:

• Despite extended searches, the ED failed to recover any "proceeds of crime" under the PMLA.
• There was no concrete evidence to indicate TASMAC's involvement in any offense under the PMLA.
• The search was conducted without following due legal procedures, as authorities were not given a copy of the search warrant.
• TASMAC officials were forced to acknowledge having read and understood the contents of the warrant/memo.
• The search violated the fundamental rights of TASMAC employees, including their right to life, liberty, and dignity.

The Enforcement Directorate firmly denied the allegations, stating that all legal procedures were followed during the searches. The ED argued that:

• The searches were not "roving inquiries" but were based on multiple FIRs registered by the Directorate of Vigilance and Anti-Corruption (DVAC) against TASMAC officers and employees.
• Since the offenses under investigation were scheduled offenses under PMLA, the ED had the authority to take cognizance.
• There was no statutory or legal obligation to provide a copy of the search warrant.
• The signatures of TASMAC officers on the search documents were not obtained under duress.

Two impleading petitions were filed—one by an activist and another by an advocate—opposing the Tamil Nadu government’s plea against the ED’s actions.

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The Tamil Nadu government requested additional time to respond to the ED’s counterarguments. Accepting this request, the court adjourned the hearing to April 8, directing all parties to complete their pleadings by April 7.

The case saw representation from:

• AG PS Raman for the Tamil Nadu government.
• Senior Advocate Vikram Chaudhari for TASMAC.
• ASG SV Raju, assisted by ED Special Counsel Zoheb Hussain, and ASG ARL Sundaresan, assisted by ED Prosecutor N Ramesh, for the ED.

Case Details:

Case Title: Tamil Nadu State Marketing Corporation Ltd (TASMAC) v. Directorate of Enforcement
Case No: WP 10348/2025