Extending the stay on investigation into the money laundering cases registered by Enforcement Directorate (ED) against Tamil Nadu State Marketing Corporation (TASMAC) in connection with an alleged liquor retail scam, the Supreme Court Tuesday asked, “Would it (ED probe) not amount to encroachment upon the right of the State to investigate?” Admitting the petitions filed by TASMAC and Tamil Nadu government, a bench of CJI B R Gavai and Justice Vinod Chandran directed that the matter be taken up after the review petitions challenging the top court’s 2022 judgment in Vijay Madanlal Choudhary vs Union of India is decided. In that case, the SC had held that “supply of ECIR (Enforcement Case Information Report) in every case to the person concerned is not mandatory”. TASMAC contended it was not given a copy of the ECIR in the ED cases. During the hearing, the CJI asked Additional Solicitor General S V Raju, appearing for the ED, “Would it (ED probe) not amount to encroachment upon the right of the State to investigate? In every case, when you find that the state is not investigating the matter, you will go and do it yourself. What happens to section 66(2)?” The Madras HC had refused to stay the probe, but after appeal, the SC stayed it on May 22, 2025. Appearing for TASMAC, Senior Advocate Kapil Sibal said the state vigilance had filed 47 FIRs in connection with the alleged corruption spanning 2014-21. Referring to the ED raids at the TASMAC headquarters in 2015, Sibal said, “How can you raid government corporate offices? What happens to the federal structures of this country?” Citing Section 66(2) of the PMLA, Sibal said it requires ED to share the information regarding the offences with the state agencies probing the matter, but this was not done. He added that the ED is also investigating the corruption angle. Raju said there was large-scale corruption and that the ED was only probing the money laundering aspect. The ASG added that the predicate offence, existence of which is necessary for the ED, is made out by the prima facie FIRs registered by the state itself. He claimed the agency had found incriminating evidence. The CJI asked, “What happens to federal structure? Law and order has to be worked within its own domain.” Raju said that “corruption is sought to be concealed with the arguments on federalism”. After the bench said that the state was filing FIRs, the ASG said, “They have also closed 37 FIRs in a short time. Predicate offence goes, ED goes. They are trying to cut off the ED by closing the FIRs.”
