Supreme Court Dismisses Tamil Nadu Businessman's Challenge To ED Search In TASMAC Money Laundering Case

The Supreme Court today dismissed a plea filed by businessman PR Rajesh Kumar challenging the legality of searches conducted by the Enforcement Directorate (ED) at his residence in May 2025 in connection with the alleged money laundering probe linked to the Tamil Nadu State Marketing Corporation (TASMAC).A bench of Chief Justice of India Surya Kant and Justice V Mohana upheld an order of the Madras High Court that had declined to examine the legality of the search as the Adjudicating Authority had confirmed the attachment under Section 8 of the PMLA, and Rajesh Kumar had approached the Appellate Tribunal.The petitioner sought quashing of search and seizure proceedings conducted by the ED at his Adyar residence on May 16, 17 and 18, 2025.The High Court held that it was unnecessary at that stage to examine the validity of the search proceedings. It closed the plea, leaving open all grounds to be raised by the petitioner before the Appellate Tribunal. The petitioner challenged this order before the Supreme Court.During the hearing today, counsel for the petitioner argued that the core issue was whether the search was conducted in compliance with Section 17 of the Prevention of Money Laundering Act, 2002 (PMLA).He highlighted that a search under section 17 could have been conducted only after recording reasons to believe that the petitioner had committed money laundering, possessed proceeds of crime, or possessed records or property connected to money laundering, and obtaining authorisation in the prescribed form. He submitted that there was no valid authorisation for the search conducted at Rajesh Kumar's residence.He argued that Rajesh Kumar was neither named in the Enforcement Case Information Report (ECIR) nor in the predicate offence, and nothing was recovered from him except three mobile phones. He contended that the High Court should have examined whether the mandatory requirements of Section 17 had been complied with instead of relegating the petitioner to proceedings arising from confirmation of attachment. He argued that compliance with Section 17 was mandatory and the validity of a search could not become irrelevant merely because attachment proceedings had subsequently been confirmed.He further submitted that the issue was already pending before the Supreme Court in petitions filed by TASMAC arising out of the same ECIR and involving similar challenges to the legality of searches conducted by the ED. The counsel maintained that the scope of Section 17, which deals with search and seizure, and Section 8, which concerns adjudication and confirmation of attachment, was entirely different. He argued that the authorities could not be permitted to enter a person's premises and seize material without first satisfying the statutory safeguards prescribed under Section 17.After hearing the submissions briefly, the Court was not persuaded to interfere.“Thank you. No question. Dismissed,” the CJI said.The petitioner's counsel then sought permission to withdraw the matter with liberty to raise all objections before the Appellate Tribunal.Rejecting the request, the CJI observed that the Madras High Court's order already protected the petitioner's right to raise all available grounds before the Tribunal.“High Court order is very clear only. We are only upholding the High Court order. Please read the High Court order. It says so,” the CJI remarked.BackgroundThe ED's money laundering case is based on multiple FIRs registered by the Tamil Nadu Directorate of Vigilance and Anti-Corruption (DVAC) concerning alleged corruption in TASMAC, the State-run liquor retailer. The case pertains to an alleged Rs. 1000 Crores liquor scam alleged to have taken place in Tamil Nadu. ED conducted various raids in March, and alleged that distillery companies siphoned off the alleged amount in the form of unaccounted cash which was used to obtain more supply orders from TASMAC (a state-run liquor marketing body). While TASMAC senior officials were accused of corruption, its shops were alleged to be collecting amount in excess of actual MRP.ED registered a case based on 41 FIRs lodged by the Directorate of Vigilance and Anti-Corruption (DVAC) regarding corruption in TASMAC.The searches at the petitioner's residence formed part of the ED's investigation into the alleged money laundering linked to TASMAC. Similar searches were conducted at the premises of several individuals, including film producer Akash Bhaskaran.The Madras High Court recently closed Bhaskaran's challenge to the same search operation, noting that Rajesh Kumar's petition had already been disposed of and that parties could raise all objections before the appellate forum.In October 2025, the Supreme Court extended interim protection restraining the ED's investigation against TASMAC.Case no. – SLP(Crl) No. 11553/2026Case title – P.R. Rajesh Kumar v. Enforcement Directorate

Supreme Court Dismisses Tamil Nadu Businessman's Challenge To ED Search In TASMAC Money Laundering Case

Amisha Shrivastava

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Amisha Shrivastava

Supreme Court Dismisses Tamil Nadu Businessman's Challenge To ED Search In TASMAC Money Laundering Case

Amisha Shrivastava

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Amisha Shrivastava

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