NEW DELHI: Supreme Court's stay on ED investigation against Tasmac, Tamil Nadu govt entity responsible for distribution of liquor in the state, has come as a setback and surprise for the agency which, validated by Madras high court order, had intensified its probe into the case leading to "discovery of evidence" of alleged collusion of distilleries and bottlers with officials in selling liquor above the maximum retail price as part of a scam.
SC faulted the agency for conducting searches on Tasmac when no 'predicate offence' had been registered against state govt undertaking. ED sources pointed out that Madras HC, in a detailed order, had struck down the challenge made on the same ground. In its order, HC had addressed the state govt's objection and held that a predicate offence, or FIR, was not mandatory to initiate an investigation under PMLA.
Sources also said the two-judge HC bench of Justices S M Subramaniam and K Rajasekar, in its April 23 order, had rejected Tamil Nadu govt's plea that ED, before carrying out any search and seizure operation on a state-owned entity, must take "prior consent" from state govt to maintain sanctity of the federal structure.
The bench had dismissed three writ petitions filed by TN govt and Tasmac seeking to stop ED investigation into the alleged liquor scam.
The HC bench had said the precondition of getting consent from the state before conducting search was "completely illogical and bereft of conscience". "How can a raid or search be conducted on a state-owned company in a surprise manner if permission is to be obtained beforehand? How can a search by an investigating agency even hold good if such absurd conditions are made?" the two judges had asked.
On Thursday, SC observed that the agency had transgressed the federal structure.
Sources said in searches at various premises of Tasmac on March 6, ED found "evidence" of manipulation in supply orders, payment of bribes for allowing sale of liquor above MRP, grant of bar licences and transfer and posting of officials. The documents seized during the raids also revealed collusion of officials where excess charges of Rs 10-30 per bottle was illegally levied at retail outlets, sources said.
SC faulted the agency for conducting searches on Tasmac when no 'predicate offence' had been registered against state govt undertaking. ED sources pointed out that Madras HC, in a detailed order, had struck down the challenge made on the same ground. In its order, HC had addressed the state govt's objection and held that a predicate offence, or FIR, was not mandatory to initiate an investigation under PMLA.
Sources also said the two-judge HC bench of Justices S M Subramaniam and K Rajasekar, in its April 23 order, had rejected Tamil Nadu govt's plea that ED, before carrying out any search and seizure operation on a state-owned entity, must take "prior consent" from state govt to maintain sanctity of the federal structure.
The bench had dismissed three writ petitions filed by TN govt and Tasmac seeking to stop ED investigation into the alleged liquor scam.
The HC bench had said the precondition of getting consent from the state before conducting search was "completely illogical and bereft of conscience". "How can a raid or search be conducted on a state-owned company in a surprise manner if permission is to be obtained beforehand? How can a search by an investigating agency even hold good if such absurd conditions are made?" the two judges had asked.
On Thursday, SC observed that the agency had transgressed the federal structure.
Sources said in searches at various premises of Tasmac on March 6, ED found "evidence" of manipulation in supply orders, payment of bribes for allowing sale of liquor above MRP, grant of bar licences and transfer and posting of officials. The documents seized during the raids also revealed collusion of officials where excess charges of Rs 10-30 per bottle was illegally levied at retail outlets, sources said.
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