Madras High Court Bench Which Questioned ED Action Recuses From Hearing Plea Against TASMAC Raids

Two judges of the Madras High Court have recused from hearing the petitions filed by the Tamil Nadu Government and the TASMAC against the searches conducted by the Enforcement Directorate in the latter's headquarters on March 6th and March 8th this year.

On Tuesday (25th March) division bench of Justice MS Ramesh and Justice N Senthilkumar informed that it was recusing from hearing the petitions. The matter is likely to be posted before the bench of Justice SM Subramaniam Justice K Rajasekar tomorrow.  

"We are recusing ourselves. We're not taking it up. We have some reasons. We wanted it to be posted tomorrow, but we had already signed the order for posting. But we found that we cannot take this matter. So it'll be posted before an alternative bench," the bench said. 

On March 20, while hearing the petitions, the bench had orally asked the ED to not proceed with the investigation till the next hearing. The bench  wondered if the ED had the power to detain the entire office based on materials available against some persons. The court also pointed out that while the ED argued that it had enough materials, the TASMAC's grievance was that such materials were not made available to them.

In its plea filed through the Additional Chief Secretary, the State argued that the ED was conducting a roving enquiry without having materials. It was submitted that even after conducting searches for prolonged hours, ED was unable to recover any “proceeds of crime” under the PMLA and thus there was no material to show that TASMAC was involved in the commission of offences under the PMLA.

It was submitted that the search itself was without following due procedure as the authorities were not given a copy of the search warrant but were forced to acknowledge of having read and understood the content of the warrant/memo. It was submitted that the search was conducted in blatant disregard to the fundamental rights of life liberty and dignity of the TASMAC employees.

The state submitted that ED's coercive tactics demonstrated a shocking disregard for the rule of law and the fundamental rights of the employees. It was submitted that ED's actions were arbitrary, without any jurisdiction and violative of Articles 14 and 21 of the Constitution.

The state argued that Ed had been misusing its powers and had been engaging in a pick-and-choose approach in violation to the principles of federalism. The state contended that ED's action amounted to usurping the power of the State in contravention to the constitutional limits prescribed.

During the last hearing, Senior Advocate Vikram Chaudhri appearing for TASMAC questioned the manner in which the search and seizure was conducted by the ED. He argued that as per Section 17(1) of the Prevention of Money Laundering Act, the Director or any other officer not below the rank of Deputy Director was to proceed with the search on the basis of information in his possession and should have reason to believe that an offence under the Act was committed. He pointed out that the Section mandated that such reasons should be recorded in writing. Emphasising on the requirement of these procedures, he submitted that the ED had failed to follow the procedures in the present case.

Case Title: Tamil Nadu State Marketing Corporation Ltd TASMAC v. Directorate of Enforcement

Case No: WP 10348/ 2025