A Madras High Court bench, consisting of Justices M. S. Ramesh and N. Senthilkumar, recused themselves on Tuesday from hearing the case concerning the Enforcement Directorate (ED) raids on the Tamil Nadu State Marketing Corporation (TASMAC).
At the outset of the day's proceedings, the bench declared its decision to step away from the matter.
"We are recusing ourselves from the TASMAC matter. We have our reasons. We had initially scheduled the hearing for tomorrow but had already signed the order posting it for today. Later, we realised we could not proceed with this matter. It will be placed before an alternate bench," the judges said.
The case revolves around ED raids conducted at TASMAC’s premises between March 6 and 8.
TASMAC, the state-run liquor distribution corporation, challenged the raids in the High Court, arguing that they were excessive and beyond the agency's jurisdiction.
On March 20, the same bench strongly criticized the manner in which the raids were carried out. The judges took issue with reports that ED officials restrained TASMAC employees and failed to provide reasons for the searches. The court subsequently directed the ED to submit a response to petitions filed by both the State and TASMAC. Additionally, it orally instructed the agency not to take any coercive action against TASMAC officials in the interim.
TASMAC’s petition accused the ED of infringing upon employees' rights, including privacy violations, by seizing their mobile phones during the operation. The ED had reportedly searched the TASMAC headquarters in Chennai, along with several distilleries and bottling units across Tamil Nadu.
However, the ED has alleged large-scale financial irregularities amounting to over ₹1,000 crore. According to the agency, these include tender manipulation, unaccounted cash transactions, and systematic overpricing of liquor at retail outlets.
The ED claimed that TASMAC stores were charging ₹10 to ₹30 more per bottle than the printed MRP, indicating a widespread overpricing scheme.
Furthermore, the agency asserted that distilleries colluded with TASMAC officials to artificially inflate operational costs and document fictitious purchases. This allegedly facilitated the diversion of unaccounted funds, which were purportedly used to bribe TASMAC officials for securing favorable supply orders.
The ED also flagged irregularities in the allocation of transport and bar license tenders under TASMAC’s purview.
The case has sparked political controversy in Tamil Nadu. The ruling Dravida Munnetra Kazhagam (DMK) accused the Central government of using investigative agencies like the ED to target state-run institutions for political gain. In contrast, the Bharatiya Janata Party (BJP) rejected these claims, asserting that corruption charges must be thoroughly investigated for accountability.
In its plea, TASMAC sought legal protection for its employees and urged the court to prevent the ED from "harassing" them under the pretext of an investigation. With the bench recusing itself from the case, the matter is now expected to be reassigned to another bench of the Madras High Court for further proceedings