CHENNAI: The Madras High Court bench, comprising Justices M. S. Ramesh and N. Senthilkumar, on Tuesday recused themselves from hearing the case related to the Enforcement Directorate (ED) raids on the Tamil Nadu State Marketing Corporation (TASMAC).
The bench announced this at the start of the day's proceedings, saying it would not hear the matter.
"We are recusing ourselves from the TASMAC matter. We have our reasons. We had initially scheduled the hearing for tomorrow but had already signed the order posting it for today. Later, we realised we could not proceed with this matter. It will be placed before an alternate bench, " the judges said.
The case pertains to ED raids at TASMAC's premises between March 6-8.
TASMAC, the state-run liquor distribution corporation, had filed a petition in the High Court, contending that the raids were excessive and conducted beyond the agency's jurisdiction.
On March 20, the same bench strongly disapproved of how the ED raids were conducted.
The judges objected to reports that the ED restrained TASMAC employees and failed to communicate the reasons for the search operations. The court had then directed the ED to file its response to the petitions submitted by both the State and TASMAC.
It had also orally instructed the agency not to take any coercive action against TASMAC officials in the meantime.
TASMAC's petition accused the ED of violating employees' rights, including privacy, by seizing their mobile phones during the raids. The agency had reportedly entered the TASMAC headquarters in Chennai and searched several distilleries and bottling units across Tamil Nadu.
However, the ED has alleged large-scale financial irregularities amounting to over Rs 1, 000 crore.
According to the agency, the irregularities included tender manipulation, unaccounted cash transactions, and the systematic overpricing of liquor at retail outlets.
The ED claimed that TASMAC stores were allegedly charging customers Rs 10 to Rs 30 more per bottle than the printed maximum retail price (MRP), pointing to a widespread overpricing strategy.
Furthermore, the ED claimed to have uncovered substantial evidence of collusion between distilleries and TASMAC officials.
The agency alleged that distilleries worked with bottling companies to artificially inflate operational costs and document fictitious purchases. These activities reportedly helped divert large amounts of unaccounted funds, which were allegedly used to bribe TASMAC officials to secure favourable supply orders.
The ED also raised concerns about irregularities in the allocation of transport and bar license tenders, which are under TASMAC's purview.
The developments have triggered political controversy in Tamil Nadu.
The ruling Dravida Munnetra Kazhagam (DMK) accused the Central government of misusing investigative agencies like the ED to target state-run institutions and to pursue political vendettas.
The Bharatiya Janata Party (BJP) dismissed these allegations and insisted that the corruption charges should be thoroughly investigated to ensure accountability.
TASMAC, in its plea, sought legal protection for its employees and urged the court to prevent the ED from "harassing" them under the guise of conducting an investigation.
With the bench's decision to recuse itself, the case is now expected to be reallocated to another bench of the Madras High Court for further hearing.