The Enforcement Directorate (ED) told the Madras High Court on Wednesday that it had raided the headquarters of the Tamil Nadu government’s liquor distribution arm, TASMAC, last month since it had reasons to believe that proceeds of crime or records connected to such proceeds of crime were stored at the premises.
Additional Solicitor General SV Raju, who appeared for ED, told a bench of justices SM Subramaniam and K Rajasekar that there was no reason to question the central agency’s jurisdiction in the present case. Raju said that Section 17 of the Prevention of Money Laundering Act (PMLA) provided that ED can conduct a raid at any place even if it has a mere suspicion that proceeds of crime or their records are kept there.
“Suspicion alone can be used as a ground for search,” Raju said, adding that the court or the state government cannot question ED’s search locations.
The DMK-led government had earlier questioned the timing of the ED raids conducted in Chennai between March 6 and 8 this year.
On Wednesday, Tamil Nadu Advocate General PS Raman alleged before the Court that the central agency was conducting a politically motivated, roving inquiry, without any predicate offence under the Prevention of Corruption Act, as the state assembly elections were scheduled for next year.
The bench asked Raju, why ED raided the TASMAC headquarters in Chennai when the 41 FIRs, claimed to be the basis for its investigation into the alleged scam, were registered across Tamil Nadu for several individual offences of bribery, liquor price and inflation among others.
Raju, however, said ED had exercised its statutory power granted under Section 17 of the PMLA in conducting the search and seizures.
He added that these FIRs had been registered by state agencies themselves and indicated a broader pattern of alleged money laundering involving TASMAC officials. Raju maintained that the ED’s actions were based on legal provisions and credible information pointing to a multi-crore scam involving kickbacks, irregular procurement practices, and tender-related corruption across TASMAC.
Advocate General Raman however, reiterated that the ED’s probe and the raids were meant only to tarnish the image of the State and its officials.
