The Supreme Court on Tuesday once again questioned the Enforcement Directorate (ED) for its actions relating to the alleged ₹1,000 crore scam in Tamil Nadu State Marketing Corporation (TASMAC), asking whether the central agency was not encroaching upon the rights of the State police in the matter.

In May, the top court had slammed the ED for its raids at the headquarters of TASMAC and stayed the money laundering probe in the alleged scam. It had made the intervention on Tamil Nadu government's petition challenging the Madras High Court decision to allow the ED probe to proceed with the money laundering probe.

During a resumed hearing today, the bench of Chief Justice of India (CJI) BR Gavai and Justice Vinod Chandran asked whether the local police could not look into the matter.

"What happens to federal structure ? Who controls law and order," CJI Gavai asked.

As the hearing progressed, CJI Gavai, however, refrained from adversely commenting about the ED's approach in investigations.

"In the last 6 years, I have seen many cases of ED. But I do not want to say something, else it will again be reported (in media)," the Court said.

Additional Solicitor General (ASG) SV Raju, appearing for ED, said that media does not usually report in favour of the central agency.

"Anything in our favour is hardly reported and that is my grievance," the counsel for ED said.

Senior Advocate Kapil Sibal, appearing for the State, earlier questioned how a government company can be raided when it was the TASMAC itself which had ordered the action.

"The managing directors are raided. Once FIR is there, ECIR is there, this matter can be closed in no time at all. We have to decide what to do and what not. What is ED doing? ED has seized computers etc. This is shocking," Sibal said.

ASG Raju said there were large scale irregularities in the TASMAC.

"There are 47 FIRs there is large scale irregularities.. we are on predicate offences and are on scheduled offences..for all these officers, there is a conduit of how money is flowing," Raju said.

Sibal responded that the ED can share any information with the State police in accordance with the provisions of Prevention of Money Laundering Act (PMLA). He also said that a majority of the First Information Reports (FIRs) stand closed.

Raju again submitted that there was large-scale corruption in TASMAC and that it was not a simple question of law and order. However, CJI Gavai said,

"Is it not encroaching upon the right of the State to probe a case? Whenever you have a doubt that State is not probing, you will go there?"

The Court also pointed to the PMLA provisions that allow ED to share relevant information with other agencies. At this, Raju pointed to State government's role in the matter,

"There are actually 47 FIRs and corruption is rampant in liquor shops and liquor distribution shops. This is a different thing that they are protected by the State," he said.

However, the Court again asked about the concept of federal structure.

"We do not want a debate competition. He [Sibal] is on the federal structure," the Court said.

Senior Advocate Mukul Rohatgi, appearing for the Tamil Nadu government, pointed to seizing of private mobile phones by ED.

"Can you take someone's phone and extract data? Is it not violation of Article 21 and such pleas are pending before the court. My phone will have all kind of information," Rohatgi said.

In response, ASG Raju said that those individuals "whose so called privacy is at stake" are not before the Court. Pointing to the prayers in the State government's petition, Raju argued that allowing the same would exempt the government servants from PMLA.

He then referred to the allegations and the evidence collected.

"We did not ransack any office. You can see from the panch witness statements as well. Though it is another thing that ED offices were indeed ransacked by the State police. Now evidence also there for money laundering and district managers etc. of TASMAC were involved," Raju added.

CJI Gavai said the State is not silent in the matter. On this, ASG Raju said the State action was limited to predicate offence.

"It is a case of rampant corruption," he said.

Raju also submitted that ED had acted in accordance with norms.

"Nobody was threatened or coerced. Everything was carried out in an orderly manner," he said.

The hearing in the matter is ongoing.

The case concerns raids conducted by the ED from March 6 to March 8 at the TASMAC's headquarters on allegations that TASMAC officials had been engaging in overpricing of liquor bottles, tender manipulation and bribery, leading to financial irregularities of over ₹1,000 crores.

The ED suspected money laundering based on allegations contained in around 41-46 first information reports (FIRs) registered by the State government or the TASMAC against TASMAC officials over years.

The DMK-led State government and the TASMAC have, however, accused the ED of overreach of its powers and termed the March raids illegal.

They proceeded to challenge the legality of the ED's raids before the Madras High Court, which dismissed the plea. The matter then reached the top court.

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