SC Junks Businessman’s Plea Challenging Legality of ED Searches in TASMAC Case
The Supreme Court has dismissed a petition filed by Tamil Nadu businessman P.R. Rajesh Kumar challenging the legality of searches conducted by the Enforcement Directorate (ED) at his residence in connection with the alleged money laundering investigation linked to the Tamil Nadu State Marketing Corporation (TASMAC) liquor scam.
A Bench comprising Justice Surya Kant and Justice V. Mohana upheld the earlier order of the Madras High Court, which had declined to examine the legality of the search proceedings at that stage. The Court observed that the attachment proceedings under the Prevention of Money Laundering Act (PMLA) had already been confirmed and the matter was pending before the Appellate Tribunal.
Background of the Case
The ED conducted search and seizure operations at Rajesh Kumar’s residence in Adyar, Chennai, on May 16, 17, and 18, 2025, as part of its investigation into alleged money laundering connected to TASMAC. The investigation originates from multiple FIRs registered by the Tamil Nadu Directorate of Vigilance and Anti-Corruption (DVAC) alleging corruption in the state-run liquor corporation.
Rajesh Kumar challenged the searches, contending that the ED had failed to comply with the mandatory requirements of Section 17 of the PMLA governing search and seizure powers. He argued that he was neither named in the Enforcement Case Information Report (ECIR) nor in the predicate offences and that the searches lacked proper authorization.
Supreme Court’s View
The Supreme Court declined to interfere with the High Court’s order. The Bench noted that once the attachment had been confirmed under Section 8 of the PMLA and appellate proceedings were available, it was not necessary to separately examine the legality of the searches in the writ proceedings. The Court also refused the petitioner’s request to withdraw the case with liberty to pursue objections elsewhere, observing that the High Court had already preserved his right to raise all available grounds before the Appellate Tribunal.
TASMAC Money Laundering Probe
The ED’s case concerns allegations of corruption and irregularities involving TASMAC, the state-owned liquor retail corporation in Tamil Nadu. The agency is investigating claims that distillery companies and intermediaries generated unaccounted cash and engaged in transactions allegedly linked to the award of supply contracts and liquor sales. The investigation is based on dozens of FIRs registered by the DVAC.
The TASMAC matter has already generated significant litigation. In 2025, the Supreme Court had criticized the ED’s approach in certain aspects of the probe and stayed parts of the investigation against TASMAC itself, observing that the agency appeared to be “crossing all limits” while pursuing a state-owned corporation.
Legal Significance
The ruling does not decide whether the ED searches were lawful or unlawful. Instead, the Supreme Court held that the petitioner has an alternative statutory remedy before the PMLA appellate mechanism and therefore declined to entertain a separate challenge to the search proceedings. The decision reinforces the principle that courts may refuse to intervene when specialized statutory forums are available for adjudication of disputes arising under the PMLA.
The broader TASMAC money laundering investigation remains pending and continues to be one of the most closely watched financial-crime and federalism-related cases involving the ED and the Tamil Nadu Government.
