In a state already bruised by bureaucratic corruption allegations and centre-state frictions, Tamil Nadu’s Tasmac liquor investigation has now collided head-on with constitutional limits. What began as a money trail through inflated liquor contracts has become a legal crossroads—one that questions the very conduct of India’s premier investigative agency, the Enforcement Directorate (ED).
On June 17, the Madras High Court delivered a sharp and necessary message: coercive power cannot be disguised as procedure.
The Core of the Contention
The case concerns the ED’s high-profile actions against film producer Akash Baskaran and businessman Vikram Ravindran, whose residences and offices in Chennai were subjected to “sealing” during a series of ED raids in May 2024. But instead of formal seizure under the Prevention of Money Laundering Act (PMLA), the ED merely pasted notices on locked premises—without entering, without inventory, and crucially, without documented justification under Section 17 of the PMLA.
The agency claimed this was procedural necessity, citing the occupants’ absence and inaccessibility. The court wasn’t persuaded.
Court’s Rebuke: Procedure Cannot Trump Law
The High Court bench, led by Justice M. S. Ramesh, asked pointedly: “Under what legal authority can the ED seal residences or offices by just pasting notices?”
The ruling clarified that such notices do not constitute lawful sealing under the PMLA. Section 17 of the Act requires specific conditions to be fulfilled: a reasoned belief, recorded in writing, that proceeds of crime are involved, and a due seizure process based on that belief. None of this, the court said, was established in the ED’s actions.
The bench warned that loosely worded notices, unbacked by statutory authority, amount to an adverse impact on individual rights. For the petitioners—neither of whom had been formally designated as accused—the consequences were severe: disrupted livelihoods, reputational damage, and legal limbo.
ED’s Deadline: Clarify or Correct
The High Court has now ordered the ED to file a detailed written explanation clearly stating:
Under which provision of PMLA or allied law the notices were pasted
What documentary evidence or grounds justified such preventive action
This, the court emphasized, is not procedural nitpicking. It is a matter of constitutional propriety.
The ED’s previous argument—that the premises were inaccessible and the individuals untraceable for a month—was summarily dismissed. The court reminded the agency that due process is not optional. Especially not when actions can restrict access to property and cast a shadow on the legal status of individuals.
The Larger Case: Still Unfolding
The sealing episode is just one chapter in a broader investigation into what is alleged to be a ₹1,000 crore scam in the Tamil Nadu State Marketing Corporation (Tasmac). The ED, acting on older DVAC FIRs filed between 2016 and 2021, has accused officials of manipulating tenders and inflating liquor procurement prices.
The key figure under scrutiny remains S. Visakan (IAS), Managing Director of Tasmac. His properties have been raided and devices seized. But the ED’s reach has since expanded to private individuals like Baskaran and Ravindran—neither of whom, it must be underscored, have been charged.
While raids are not uncommon, the scale and aggression of ED action in this case have drawn judicial intervention at multiple levels. The Supreme Court, on May 22, raised questions about the ED’s jurisdiction over a state-run entity like Tasmac, noting that such moves risk infringing on federal balance.
The Madras High Court’s June 17 judgment has now deepened that scrutiny. By questioning the legal architecture of ED’s sealing methods, the court has sent a clear message: you cannot claim urgency at the cost of legality.
Due Process Is the Real Test
The Tasmac case has triggered a vital debate—not about whether the ED should investigate, but about how it investigates. Can it seal properties by pasting a printed notice without formal seizure? Can it restrict access without formally naming someone an accused? Can suspicion, in effect, replace evidence?
These are not technicalities. These are pillars of justice.
When institutions bend the rules, citing national interest or procedural convenience, the slippery slope is not far. And in a democracy, investigative zeal must not come at the cost of constitutional restraint.
The High Court verdict is not just a judicial rebuke. It is a reminder—sharp and timely—that investigative power, however grave the allegations, must walk hand in hand with statutory discipline.
Because in India’s complex federal order, where the boundaries between state autonomy and central authority are already frayed, overreach in the name of enforcement cannot be the new norm.
The ED has until the next hearing to clarify. But one thing is already clear: if investigative might must hold power accountable, it must first hold itself to account.
