MADRAS HIGH COURT
S.M. Subramaniam and K. Rajasekar, JJ.
Tamil Nadu State Marketing Corporation Limited, (TASMAC) and Anr. – Petitioners
versus
Directorate of Enforcement – Respondent
W.P. Nos.10348, 10352 & 10355 of 2025 and W.M.P. Nos.11654, 11655, 11657 to 11659 & 1 2695 of 2025
Decided on 23.4.2025

IMPORTANT POINTS
(1) Money Laundering Act, 2002 – Sufficiency or adequacy of information cannot be gone into by Court at this stage of search and seizure which involves collection and gathering of evidence.
(2) Seizure of mobile phone is directly and inextricably related to investigation and search under PMLA for the purpose of collection of evidence for gathering material to unearth offence of money laundering and prosecute offenders.
(3) Raid or a search by an investigating agency must be discreetly planned and executed to ensure that offenders are caught off guard.
(4) Offence of money laundering is a crime against people of our Nation – Eventually, what matters most is ‘Will of the People’.
(5) Privacy right is a personal right and cannot be asserted vicariously by a company or Government on behalf of its employees.

Headnote:

(A) Prevention of Money Laundering Act, 2002 – Section 17 – Constitution of India – Article 226 – Petition for protective order – Search conducted by Directorate of Enforcement (ED) – Condition precedent for launch of investigation under PMLA is primarily presence of scheduled offence – Multiple F.I.Rs have been registered by Tamil Nadu Department of Vigilance and Anti-Corruption on the issue that TASMAC shops are collecting excess amount than actual Market Retail Price (MRP) and staff are selling some foreign liquors which rarely come in market at exorbitant prices – Enforcement Directorate had conducted search and seizure at TASMAC Headquarters and other connected locations by invoking Section 17 of PMLA. The search and seizure procedures are well contemplated within the ambit of Prevention of Money Laundering Act, 2002 – Sufficiency or adequacy of information cannot be gone into by Court at this stage of search and seizure which involves collection and gathering of evidence – Merits of subjective satisfaction arrived at by authorising officer cannot be gone into by Courts – Courts cannot substitute their own belief with that of an investigating officer – Judicial review powers of Courts is limited only to the extent as to whether reasons to believe is recorded in writing before conducting search – Scope of Judicial review is limited to this alone and cannot go beyond or examine subjective satisfaction of investigating officer. (Paras 11,20, 28 and 30)

(B) Prevention of Money Laundering Act, 2002 – Section 17 – Prevention of Money laundering (Forms, Search and Seizure or Freezing and Manner of Forwarding Reasons and Materials to Adjudicating Authority, Impounding and Custody of Records and Period of Retention) Rules, 2005 – Rule 3(4) – Constitution of India – Articled 21 and 226 – Petition for protective order – In Section 17, there is no explicit procedure stipulated that copy of reasons to believe must be served on person on whom search is conducted – Search is a preliminary stage and is not as serious as arrest as in case of arrest there is curb on right to personal liberty – ECIR cannot be equated with FIR and supply of ECIR in every case to person concerned is not mandatory – String of allegations levelled out of no viable basis or material has caused an illusionary scenario – Petitioner have nowhere disputed credibility of Panch witness in Panchnama – Court cannot take a vague allegation against a Central investigating agency – Gender of public officials should not be used as an excuse to prevent a lawful agency from doing its duty – Right to privacy under Article 21 is subject to reasonable restrictions – PMLA being statute in force, it is well within its ambit to conduct search and Directorate of Enforcement derives search and seizure power from Section 17 of Act – This cannot be termed as breach of privacy – Privacy right is a personal right and cannot be asserted vicariously by a company or Government on behalf of its employees. (Paras 36, 39, 46, 49, 55, 67 and 71)

(C) Prevention of Money Laundering Act, 2002 – Section 17 – Constitution of India – Articled 21 and 226 – Petition for protective order – Action of conducting search under constitutionally valid provisions of PMLA and for the purpose of collection of evidence to detect and prosecute offence of money laundering amounts to a reasonable restriction on right to privacy – Seizure of mobile phone is directly and inextricably related to investigation and search under PMLA for the purpose of collection of evidence for gathering material to unearth offence of money laundering and prosecute offenders – On commission of any crime, search is conducted to gather evidence and other relevant materials viable for investigation to progress – Similarly in cases involving PMLA offences, there is offence of money laundering involved and searches have to be conducted to seize digital evidences and other records in pursuit of offence – Raid or a search by an investigating agency must be discreetly planned and executed to ensure that offenders are caught off guard – Any reasonable man would know that if employees are allowed to go, there is high chance of destruction or concealment of evidence, which would defeat very purpose of such a search – It is a due process of law which is well within ambit of Article 21 that employees be detained to prevent any untoward methods that may be aimed to sabotage investigation – This cannot be termed as harassment – It is impractical to expect a highly comfortable and pleasant ambience for anybody who has to comply with laws of a country – Laws are made to ensure an order in a society and prevent chaos – Offence of money laundering is a crime against people of our Nation – Eventually, what matters most is ‘Will of the People’ – Directorate of Enforcement given liberty to proceed with all further actions under PMLA. (Paras 72, 73, 90, 92, 93, 95, 96 and 97)

Result: Writ Petitions dismissed.