In a major setback for the ruling DMK, particularly Prohibition and Excise Minister V Senthil Balaji, the Madras High Court on Wednesday dismissed petitions challenging the recent ED raids on the headquarters of the Tamil Nadu State Marketing Corporation (TASMAC), the state-owned monopoly IMFL retailer.

A division bench of the court permitted the ED to go ahead with the enquiry.

Advertisement

The raids were carried out on March 6 and March 8 on TASMAC headquarters in Chennai and on bottling companies as well as liquor manufacturing firms and the ED had claimed to have unearthed a scam involving over Rs 1,000 crore.

Rejecting the state’s contention that the searches were politically motivated since the assembly elections are due early next year, the division bench of Justices SM Subramaniam and K Rajasekar, made it clear that the Court could not go into verify such allegations.

Further, the bench observed that economic justice outweighed the inconveniences caused to the officials and staff during the raid in connection with money laundering cases.

“Whether a court can go and examine if political forces are at play or be a partaker in the political game? Definitely not. That is not the duty of the court of law. The right place to place this is before the people since eventually what matters is the will of the people,” it was observed.

Further, the Bench said the court could only examine the material before it and the offence committed.

Stating that money laundering is a crime against the nation and its people, the court said few inconveniences of employees being sent home at odd hours could not be a ground to strike down the searches, held for the benefit of the nation.

Legislations such as the PMLA serve economic justice and hence the few inconveniences could not be held as disproportionate, the Bench reasoned.

The case first came up before a Bench of Justices MS Ramesh and N Senthilkumar which orally directed the ED to pause the inquiry but recused itself at the next hearing. Then it was posted before the present Bench.

However, in the meantime, the TN Government and TASMAC approached the Supreme Court, seeking transfer of the case from Madras High Court to another Court. With the apex court declining to transfer the case the Bench also expressed its displeasure over the state moving the apex court while keeping it in the dark.

Earlier, on Monday, the Bench reserved orders in the case after marathon hearings from senior counsel Vikram  Chaudhary, Vikas Singh and Advocate General PS Raman who appeared for TASMAC and Addl. SG SV Raju and Addl.SG ARL Sundaresan and ED’s special prosecutor N Ramesh.

The TN Government as well as TASMAC charged the ED with conducting a roving and fishing inquiry without any material.  TASMAC argued that the ED had concealed the reasons for the raids, an essential requirement under the PMLA and alleged that the ED searches were intended to tarnish its image with an eye on the upcoming assembly election.

It was also argued that the ED doesn’t have original jurisdiction to investigate a case as it could launch a probe only when a scheduled offence is committed.

ED could not start a probe in the hope of an FIR being filed, it was submitted.

Countering the state and TASMAC, ED argued that the search at TASMAC was a follow up of various FIRs pertaining to involvement of TASMAC officials in taking bribes, manipulating records and inflating prices of bottles besides irregularities in transfers and postings.