ED crossed all limits with raid on T.N. govt. body: SC, Pg1

Key Highlights:

• The Supreme Court sharply criticised the Enforcement Directorate (ED) for "crossing all limits" during its raids on Tamil Nadu State Marketing Corporation (TASMAC).
• CJI B.R. Gavai questioned the legal basis of targeting a state-run corporation, stating it may constitute a violation of India’s federal structure.
• The Court stayed the ED investigation and raised concerns over jurisdictional overreach by a Central agency.

Background of the Case:

• TASMAC, the liquor distribution monopoly in Tamil Nadu, was subjected to ED raids despite multiple FIRs already filed by the State Police.
• ED raided TASMAC headquarters in 2025, allegedly seizing cloned phones and devices from officials.
• Tamil Nadu government challenged these actions in Madras High Court, seeking to quash the ED's probe and its jurisdiction over state entities.

Court’s Observations:

• The CJI observed: "How can a corporation commit a criminal offence? The ED is crossing all limits."
• Questioned the necessity of ED involvement when the state was already investigating the matter through 41 FIRs against liquor operators.
• Noted that the ED failed to justify the predicate offence required under the PMLA (Prevention of Money Laundering Act) for it to initiate a probe.

Federal Structure Concerns:

• The SC reiterated that India’s Constitution mandates a federal division of powers.
• Interference by central agencies in state-administered sectors without due cause can undermine cooperative federalism.
• The Court sought to reinforce the autonomy of state institutions unless clear procedural grounds exist for central intervention.

Key Concepts:

• PMLA (2002): ED can investigate only if there’s a predicate offence registered under other laws.
• Cooperative Federalism: Both Centre and States must work in harmony while respecting jurisdiction.
• Jurisdictional Overreach: When an agency acts outside the legal boundaries of its mandate.

Significance:

• Raises critical questions about the balance of power between Centre and States.
• Highlights the need to define boundaries for investigative agencies to prevent political misuse and uphold institutional integrity.
• Could lead to a constitutional clarification on the scope of ED's powers vis-à-vis state-run entities.

Mains Mock Question:

The Supreme Court’s rebuke of the ED in the TASMAC case highlights growing concerns about federal overreach. Examine the legal and constitutional safeguards needed to uphold federalism while ensuring accountability of public institutions.