Chennai, March 20 The Madras High Court has orally directed the Enforcement Directorate (ED) to refrain from proceeding with its investigation into the Tamil Nadu State Marketing Corporation (TASMAC) in an alleged money laundering case until the next hearing on March 25.
A division bench comprising Justice M.S. Ramesh and Justice N. Senthilkumar issued the directive on Thursday while hearing a petition filed by TASMAC, challenging the ED’s recent searches at its headquarters.
The court also instructed the ED to submit a counter to TASMAC’s petition.
In addition to TASMAC’s petition, the Tamil Nadu government has also approached the court, seeking a declaration that the ED’s power to investigate money laundering offences within the state without its consent violates the principles of federalism and the separation of powers. However, the court noted that the relief sought was too broad and directed the state to modify its request.
Advocate General P.S. Raman assured the bench that the state would revise its plea accordingly.
During the proceedings, Senior Advocate Vikram Chaudhri, representing TASMAC, questioned the manner in which the ED conducted the search and seizure operations.
Citing Section 17(1) of the Prevention of Money Laundering Act (PMLA), he argued that any such search must be based on written records justifying the reasons for the action. He contended that the ED had failed to comply with these procedural requirements in this case.
Chaudhri further alleged that the ED’s actions amounted to an invasion of privacy, as officers entered TASMAC’s premises, seized documents, and confiscated employees’ mobile phones. He emphasised that the ED did not have the authority to indiscriminately take documents from the office. Moreover, he argued that the extent of the seizure should be proportionate to the alleged offence.
Highlighting the impact on TASMAC employees, he informed the court that staff members were made to sit for 60 hours and that women officers were sent home late at night, disregarding their rights and well-being.
The division bench asked whether the ED had the authority to detain the entire office based on materials linked to only a few individuals.
It also noted that while the ED claimed to have sufficient evidence, TASMAC was aggrieved that such materials were not shared with them.
Additional Solicitor General A.R.L. Sundaresan, representing the ED, denied the allegations. He asserted that the ED had permitted employees to leave and that it had enough material to justify the seizures.
Both the Tamil Nadu government and TASMAC had earlier moved the Madras High Court against the searches conducted by the ED at the TASMAC headquarters between March 6 and March 8. The case has now been adjourned to March 25, when further arguments will be heard.
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