The Madras High Court on April 23, 2025, upheld the Enforcement Directorate’s (ED) search operations at TASMAC’s headquarters, ruling that procedural inconvenience cannot override the mandate of economic justice. The court dismissed pleas filed by the Tamil Nadu government and TASMAC challenging the legality of ED’s search under the Prevention of Money Laundering Act (PMLA), 2002.
Key Highlights of the Judgment
1. Court Validates ED’s Search Authority
- The ED’s search under Section 17 of the PMLA was held valid and within jurisdiction.
- “Reasons to believe” were recorded in writing and verified by the court.
2. No Prior State Consent Needed
- The court rejected the state’s argument that ED requires prior consent from the State Government.
- Federalism was not seen as a barrier in matters affecting national economic interests.
3. Corruption Allegations in TASMAC
- Multiple FIRs had been registered against TASMAC officials for collecting excess amounts, bribery, and illegal transfers.
- These FIRs were the predicate offences under the PMLA.
4. No Violation of Privacy or Liberty
- The right to privacy was not deemed absolute.
- Search operations followed due procedure; no unlawful detention or coercion was proven.
Legal Standpoints Considered
| Issue Raised by Petitioners | Court’s Ruling |
|---|---|
| Search without State consent violates federalism | Rejected – PMLA is a central law with pan-India jurisdiction |
| Officers detained unlawfully | No evidence of harassment or coercion found |
| No FIR before search | Not required post-2019 amendment to Section 17 of PMLA |
| Women’s safety violated | Allegation denied by ED and unsupported by evidence |
Key Legal References
- Section 17 of PMLA – Search and seizure powers
- Vijay Madanlal Choudhary v. Union of India – Landmark SC case upholding ED powers
- KS Puttaswamy v. Union of India – Privacy not absolute; subject to reasonable restrictions
Why This Verdict Matters
“This verdict reinforces the autonomy of central agencies in probing financial crimes, especially in government-linked institutions. It also clarifies that search operations—when backed by proper procedure—can’t be challenged solely on bureaucratic inconvenience.”
FAQs
Q1: Can ED search government offices without state consent?
Yes. Under PMLA, central agencies don’t need state approval.
Q2: Does this ruling impact other state-run corporations?
It sets a precedent affirming that all government corporations are within ED’s investigative reach if money laundering is suspected.
Q3: Was there any illegality in the search process?
The court found no violation of law or procedure. The panchnamas were valid, and witnesses confirmed fair conduct.
