The Madras High Court, on April 23, dismissed a series of writ petitions filed by the Tamil Nadu State Marketing Corporation (TASMAC) and the State Government challenging the Enforcement Directorate's (ED) search operations conducted at the TASMAC headquarters in March 2025. The Division Bench comprising Justice S.M. Subramaniam and Justice K. Rajasekar emphasized that procedural inconveniences in money laundering cases must yield to the broader goal of economic justice.
The search operations, which took place from March 6 to March 8, 2025, targeted the TASMAC headquarters located in Egmore, Chennai. ED officers acted under Section 17 of the Prevention of Money Laundering Act (PMLA), 2002, based on multiple FIRs registered by the Tamil Nadu Department of Vigilance and Anti-Corruption alleging widespread corruption among TASMAC officials.
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The court rejected TASMAC’s argument that the ED acted without jurisdiction and politically motivated the search due to upcoming elections. “Not duty of court of law... Right place to place this submission is before the people. Eventually what matters most is will of the people,” the Bench remarked, reinforcing that political motives cannot be judicially assessed in such cases.
TASMAC had contended that the ED lacked original jurisdiction under PMLA as no scheduled offence had been conclusively established at the time of the search. It was argued that ED acted on assumptions without concrete evidence and failed to provide ‘reasons to believe’ as required under the Act. The court, however, concluded that Section 17 permits searches based on suspicion and need not meet the higher threshold required for arrests under Section 19.
The court noted that, according to the ED, “the search authorization dated 05.03.2025 was on the basis of written reasons to believe,” and this satisfied the procedural requirement under Section 17(1) of PMLA. The court further emphasized that the adequacy or sufficiency of the material forming the basis of ‘reasons to believe’ is not subject to judicial review at the stage of investigation.
The judges dismissed arguments equating the procedural standards of search with those of arrest, stating, “Arrest is deprivation of one’s right to personal liberty, whereas search and seizure relates to right to privacy and freedom of movement.”
The court also addressed allegations made by TASMAC officials that they were coerced or detained unlawfully during the search. It held that no formal complaints were made by the officers and noted that the Panchnama, signed by TASMAC officials and independent witnesses, stated the search was conducted peacefully. “No coercion, threat, inducement, or any other external influence was used against the inmates,” the Panchnama recorded.
Regarding affidavits filed by certain TASMAC officers alleging harassment and denial of basic necessities, the court found no credible evidence to support these claims. It emphasized that such accusations, if genuine, should have been pursued through separate individual petitions supported by formal complaints.
Addressing the argument that ED’s failure to share the Enforcement Case Information Report (ECIR) amounted to a violation of rights, the court relied on the Supreme Court’s decision in Vijay Madanlal Choudhary v. Union of India, stating that the ECIR is an internal document and not required to be shared at the stage of investigation.
The bench was particularly critical of the attempt by a government entity to seek a blanket exemption from the ED’s search powers under PMLA. “Such a prayer implies that the petitioners are in essence seeking a declaration from a Court of Law that the Government of Tamil Nadu alone be exempted from PML Act,” the court observed, calling it unjustifiable and without legal merit.
The court strongly refuted the claim that female officers were treated inhumanely or detained during the night without safety precautions. It cited the Panchnama and ED’s submission that women were allowed to leave at night and adequate care was taken. “Gender of public officials should not be used as an excuse to prevent a lawful agency from doing its duty,” the court remarked.
In conclusion, the Madras High Court validated the ED’s actions as being within the bounds of law and procedure. It held that the investigation could proceed without interference and dismissed all the petitions filed by TASMAC and the State Government. The court reaffirmed that upholding the rule of law and investigating corruption in public offices remains paramount.
