The Supreme Court has recently voiced strong criticism against the Enforcement Directorate (ED), stating that the agency is "crossing all limits" and "totally violating the federal structure of the country." This rebuke came as the court stayed the ED's investigation into the Tamil Nadu State Marketing Corporation (TASMAC), a government-run liquor retailer, over an alleged ₹1,000 crore liquor scam.
A bench headed by Chief Justice of India (CJI) B.R. Gavai and Justice A.G. Masih was hearing a plea filed by the Tamil Nadu government challenging the ED's searches at the TASMAC headquarters. Senior Advocate Kapil Sibal, representing the state, argued that the state itself had filed 41 FIRs between 2014 and 2021 against individuals found to be taking cash related to liquor outlets. He questioned the ED's intervention in 2025, raiding the corporation's head office when the cases were already being pursued against individuals.
CJI Gavai questioned the Additional Solicitor General S.V. Raju, who appeared for the ED, "How can (there be) an offence against corporation?... You may register against individuals. How corporation in criminal matter?" The CJI further added, "Your ED is crossing all limits, Mr. Raju," and directed the ED to file a reply within two weeks.
The court's strong stance underscores growing concerns about the ED's alleged misuse of power and its encroachment upon the federal structure of India. The DMK-led Tamil Nadu government and TASMAC had approached the Supreme Court against the ED's searches on the corporation's premises, arguing that the agency's actions were a violation of constitutional rights and the principles of federalism. The state government argued that the ED was exceeding its remit and attempting to usurp the state's right to investigate offences occurring within its jurisdiction. They also questioned the timing of the searches, pointing out the delay in action since the last FIR was registered in 2021.
The Supreme Court also addressed the ED's actions of seizing employees' phones and cloning data during the raids. Senior Advocates Kapil Sibal and Mukul Rohatgi, representing TASMAC, urged the court to direct the ED not to use the collected data, raising concerns about privacy.
The ED's probe is based on over 40 FIRs registered by the Tamil Nadu Vigilance Department regarding alleged corruption in the granting of wine shop licenses. The central agency alleges a fraud of ₹1,000 crore involving politicians. However, the Supreme Court's intervention suggests a need for greater scrutiny of the ED's methods and adherence to constitutional principles.
This isn't the first time the ED has faced criticism for allegedly overstepping its authority. Opposition parties have frequently accused the agency of being used as a tool to target political opponents. The Supreme Court's recent remarks in the TASMAC case add weight to these concerns and raise questions about the ED's independence and impartiality.
The Supreme Court's decision to stay the ED's probe into TASMAC and its strong condemnation of the agency's actions highlight the importance of safeguarding the federal structure of India and ensuring that investigative agencies operate within the bounds of the Constitution. The case also brings to the forefront the debate on the extent of the ED’s powers and the need for checks and balances to prevent potential abuse.
