The Supreme Court has dismissed a petition filed by Tamil Nadu businessman PR Rajesh Kumar challenging the legality of search and seizure operations conducted by the Enforcement Directorate (ED) at his residence in May 2025 in connection with the investigation under the Prevention of Money Laundering Act (PMLA), 2002, allegedly linked to the Tamil Nadu State Marketing Corporation (TASMAC).
The Bench of Chief Justice of India (CJI) Surya Kant and Justice V Mohana on Friday declined to interfere with an order of the Madras High Court, which had refused to examine the validity of the search proceedings after the Adjudicating Authority under PMLA confirmed the attachment and observed that the petitioner had already approached the Appellate Tribunal.
Kumar had sought quashing of the search and seizure proceedings carried out by the ED at his residence in Adyar, Chennai, on May 16, 17 and 18, 2025. The High Court had earlier closed the petition, observing that once the attachment proceedings had been confirmed under Section 8 of the PMLA, it was unnecessary at that stage to adjudicate upon the legality of the search. The High Court, however, had expressly preserved the petitioner’s right to raise all available grounds before the Appellate Tribunal.
Challenging that decision before the Supreme Court, the counsel for Kumar argued that the central issue concerned compliance with Section 17 of the PMLA, which governed search and seizure powers of the ED. It was submitted that a valid search under Section 17 could be undertaken only after the authorised officer recorded reasons to believe that a person was involved in money laundering, possessed proceeds of crime or held records or property connected with such activity, and after obtaining the requisite statutory authorisation.
The petitioner contended that no valid authorisation existed for the searches conducted at his residence. It was further argued that Rajesh Kumar was neither named in the Enforcement Case Information Report (ECIR) nor in the predicate offences forming the basis of the investigation. According to the petitioner, the ED recovered only three mobile phones during the search operation.
The petitioner maintained that the High Court ought to have independently examined whether the mandatory safeguards under Section 17 had been complied with, rather than relegating him to proceedings arising from the confirmation of attachment. It was argued that the legality of a search could not become irrelevant merely because attachment proceedings had subsequently progressed under Section 8 of the statute.
The counsel further submitted that similar questions concerning the legality of ED searches arising out of the same ECIR were already pending before the Supreme Court in petitions filed by TASMAC. Emphasising the distinction between the statutory scheme governing search and seizure under Section 17 and attachment adjudication under Section 8, the petitioner argued that investigative authorities could not be permitted to enter private premises and seize material without first satisfying the mandatory jurisdictional requirements prescribed by law.
After hearing the submissions, the Supreme Court declined to interfere with the High Court’s order and dismissed the petition. When the petitioner sought permission to withdraw the matter with liberty to pursue all objections before the Appellate Tribunal, the Bench refused the request, observing that the High Court had already protected the petitioner’s right to raise all available grounds before the appellate forum and that its order sufficiently safeguarded those remedies.
The ED investigation originates from multiple FIRs registered by the Directorate of Vigilance and Anti-Corruption (DVAC) concerning alleged corruption in TASMAC, the State-run liquor retail corporation. The agency is probing an alleged liquor scam estimated at around Rs 1,000 crore.
According to the ED, certain distillery companies allegedly siphoned off funds through unaccounted cash transactions that were purportedly used to secure supply orders from TASMAC. The investigation also involves allegations of corruption by senior TASMAC officials and claims that liquor outlets collected amounts exceeding the prescribed maximum retail price.
The money laundering case was registered on the basis of 41 FIRs lodged by the DVAC. The searches conducted at Rajesh Kumar’s residence formed part of the wider investigation into the alleged laundering of proceeds of crime linked to the TASMAC scam. Similar searches were also carried out at the premises of several other individuals, including film producer Akash Bhaskaran.
The Madras High Court had recently disposed of a similar challenge filed by Bhaskaran, observing that issues relating to the legality of the searches could be raised before the appropriate appellate forum. In October 2025, the Supreme Court had granted interim protection restraining certain aspects of the ED’s investigation against TASMAC, after which the proceedings continued under judicial scrutiny.
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