The Supreme Court today, though stayed the money laundering investigation against the Tamil Nadu State Marketing Corporation (TASMAC) by the Enforcement Directorate (ED) in connection with alleged irregularities in the grant of liquor shop licences, it declined to stay the use of data cloned from phones of employees seized during the raid by the ED.

A Bench of Chief Justice of India B.R. Gavai and Justice Augustine George Masih observed, “We have already granted you stay... We have protected you. We can't grant you more than what you have prayed for. We have stayed the proceedings”, declining any further relief.

Appearing for the State of Tamil Nadu, Senior Advocate Kapil Sibal contended that the stay is only a stay of proceedings, but the ED may use the phones seized.

At the outset, Sibal submitted, "This is a corporation that sells liquor. The State filed 41 FIRs between 2014-21. ED came into picture in 2025. It raids the corporation." He added, "All phones taken, everything cloned."

Taking strong exception to this, the CJI asked the ED, "You may register against an individual, but Corporation? How can you register? Your ED is crossing all limits!"

The Bench issued notice to the ED and stayed further proceedings in the matter.

Senior Advocate Mukul Rohatgi, also appearing for Tamil Nadu, added, "All employees' phones cloned." Sibal interjected, "There is something called privacy... This is an issue of privacy. They are ED, they should be investigating matters".

Sibal and Rohatgi also submitted that the Court has, in many cases in past, granted interim relief for the protection of privacy in the context of seized mobile phones.

Additional Solicitor General S.V. Raju, appearing for the ED, defended its action, arguing, “We have done nothing wrong. There was cash recovered. I will show.”

To this, the CJI responded, "We will hear you when you file the reply." Raju submitted, "It is a Rs. 1000 crore fraud."

The CJI, however, pressed further, asking, "Where is the predicate offence?? ED is crossing all limits."

While the Court stayed the ED’s ongoing probe against TASMAC, it declined to stay the use of data cloned from employees’ phones, stating that the matter would be considered after the agency files its reply.

The petitions challenge the April 23 Madras High Court order, which permitted the ED to proceed under the PMLA.

Cause Title: State of Tamil Nadu v. Enforcement Directorate (SLP(Crl) No. 7958/2025)

Chief Justice of India B. R. GavaiJustice Augustine George Masih

Namrata Banerjee

Supreme Court Correspondent

Namrata is a Correspondent covering the Supreme Court of India. She has previously practiced law and worked in-house with a Public Sector Undertaking.