The Enforcement Directorate (ED) has conceded before the Madras High Court that it does not possess the power to seal premises, particularly those found locked during search operations conducted under the Prevention of Money Laundering Act (PMLA). This submission was made by Additional Solicitor General (ASG) S.V. Raju during a hearing involving petitions filed by film producer Akash Baskaran and businessman Vikram Ravindran.

The case arose from a search and seizure operation conducted by the ED on May 16 at multiple locations linked to Bhaskaran and Ravindran, concerning an alleged Rs 1,000-crore scam. The petitioners challenged the legality of the ED's actions, arguing that the agency had illegally sealed their office and residence, even though they were not present during the raids. Notices were also pasted on the premises, warning that no one should enter without the ED's permission.

A division bench of Justices M.S. Ramesh and V. Lakshminarayanan raised concerns about the ED's interpretation of its powers. Justice Ramesh remarked that while the PMLA is often described as an "evolving legislation," it is the ED officials who are "evolving day by day by expanding their powers." The court questioned under which provision of the PMLA the ED was authorized to prevent people from accessing their properties by affixing such notices.

In response, ASG Raju clarified that while Section 17 of the PMLA empowers ED officials to break open locks for conducting searches, the agency chose not to do so in this instance to avoid escalating the situation. Instead, they opted to paste notices outside the premises. However, the court pointed out that these notices effectively amounted to a virtual sealing of the premises, as they deterred anyone from entering without the ED's explicit consent. Justice Lakshminarayanan noted that "No sane person would ignore such a notice and walk in. That fear itself shows it is a de facto sealing." The bench further stated that "By saying ED would 'permit' them to enter, it presumes ED has power to prohibit".

Acknowledging the court's concerns, ASG Raju assured the bench that the ED would withdraw the notices and return any seized materials. He also stated that he would instruct ED officials to refrain from such actions in the future. The court then reserved orders on the interim applications and adjourned the hearing on the main petitions by four weeks, giving the ED time to file a counter-affidavit.