The Madras High Court on Wednesday dismissed the petitions filed by the State and the Tamil Nadu State Marketing Corporation (TASMAC), challenging the searches conducted by the Directorate of Enforcement at TASMAC headquarters on March 6 and 8.
The Division Bench of Justice SM Subramaniam and Justice K Rajasekar observed that in money laundering cases, economic justice prevailed over inconveniences in the procedure.
The Apex Court further rejected the state government’s allegations that the searches were politically-motivated, in view of the upcoming Assembly elections.
Noting that examining such allegations was not the duty of the court of law, the Bench told the Counsel appearing for the state that the right place to place this submission was before the people.
What eventually mattered the most was the will of the people, it pointed out, while allowing the national agency to proceed with the raids.
Earlier on April 21, the Bench had reserved its verdict following marathon hearings with arguments advanced by Senior Advocate Vikram Chaudhary, Senior Advocate Vikas Singh and Advocate General PS Raman (for TASMAC), ED Special Prosecutor N Ramesh (for the ED), and ASG SV Raju.
The matter was initially listed before the Bench of Justice MS Ramesh and Justice N Senthilkumar. Though the Bench orally asked the ED to halt the probe, it recused itself at the next hearing. Following this, the petitions were listed before the present Bench.
The state government and TASMAC also moved the Supreme Court seeking the transfer of pleas from the Madras High Court, which refused to grant them relief. The matter continued to be heard by the High Court.
Expressing its strong displeasure at being kept in the dark about the transfer petitions, the High Court reprimanded the state government and TASMAC for disrespecting the court.
TASMAC accused the ED of conducting a roving and fishing inquiry without any material. Under the Act, the authorities could not prosecute someone on the notion or assumption that a scheduled offence has been conducted.
TASMAC further contended that ED had concealed data by not providing the ‘reasons to believe,’ which were essential under the Act. The Counsel appearing for ED submitted that ED’s searches at TASMAC headquarters seemed to be to get details of the scheduled offence.
TASMAC added that ED could have also chosen to seek the assistance of the officers under Section 54 of the Act, but the agency chose to search the premises under Section 17 instead.
It further argued that the action was in connection with the upcoming Tamil Nadu elections, as ED wanted to tarnish the image of people involved in the election.
The Counsel appearing for TASMAC stressed that ED’s powers were circumscribed by law as it could conduct search and seizure only upon the existence of a scheduled offence, which was a pre-requisite under the Act.
He contended that ED did not have original jurisdiction to investigate a case and its jurisdiction would start only if a scheduled offence under the PMLA was committed. Singh emphasised that the ED could not start the investigation in the hope that there may be an FIR.
The Counsel representing ED argued that the search at the TASMAC head office had only taken place due to various FIRs regarding involvement of TASMAC officials in taking bribes, inflating marked prices on liqour bottles and manipulating postings and transfers of employees had surfaced.
He pointed out that these complaints had been registered by the state police itself.
alone can be used as a ground for search and that the court did not have the authority to intervene at this stage or to question the location for search chosen by the agency.
The ASG also submitted that TASMAC had raised the allegations of harassment for the first time in the petitions. Raju said that the Panchnama, which was accepted and signed by officials of TASMAC, clearly states that the officers were allowed to go home at night and that the search proceedings were paused during the night.
ED submitted that the petitioners had tried to bypass the statutory framework by approaching the court directly instead of going to the Adjudicating authority. He said it was for the adjudicating authority to decide if the information of the search was immediately forwarded to the adjudicating authority, within a reasonable time under Section 17(2) of PMLA. In the present case, the delay was cogent and there was a reasonable explanation, he added.
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