‘Something is wrong in Tasmac...’ Madras HC flags irregularities, quashes action against whistleblowers

Chennai: The Madurai Bench of the Madras High Court, in a notable judgment delivered by Justice B Pugazhendi, quashed disciplinary proceedings against three Tamil Nadu State Marketing Corporation (Tasmac) employees who had raised concerns about corruption within the liquor monopoly.

The court observed that official documents suggest “something is wrong within the entire Tasmac system,” hinting at entrenched irregularities.

The employees—Mayakannan, Murugan, and Ramasamy—had been penalised for speaking to the media about these issues. The High Court overturned the disciplinary action, stating that allowing corruption to persist in an organisation intended to curb illicit liquor is unacceptable.

Background: A monopoly under scrutiny

Tasmac, which operates around 7,000 liquor outlets in Tamil Nadu, has faced a barrage of corruption allegations, many originating from 41 FIRs filed by the Directorate of Vigilance and Anti-Corruption (DVAC) between 2014 and 2021. These include overpricing, irregular tenders, kickbacks from distilleries, and bribes for transfers and bar licenses.

Based on these FIRs, the Enforcement Directorate (ED) launched a money-laundering investigation into Tasmac. However, on May 22, the Supreme Court stayed the ED’s probe, calling its approach excessive. Chief Justice of India BR Gavai rebuked the agency, stating: “You are totally violating the federal structure of the country.”

PIL seeks CBI probe

In parallel, a public interest litigation (PIL) filed by advocate K Venkatachalapathy urged the Madras High Court to transfer the DVAC cases to the Central Bureau of Investigation (CBI), citing lack of transparency and the scale of corruption. On May 23, the court reiterated its order to the Tamil Nadu government to submit a status report on the investigations.

Political backdrop: Stalin defends DMK amid allegations

Reacting to political allegations tying his NITI Aayog meeting attendance to the ED raids, Tamil Nadu Chief Minister M K Stalin dismissed any suggestion of compromise. In a letter to DMK cadres on May 26, Stalin asserted that the ED’s actions targeted the DMK unfairly and were based on irregularities that occurred during the previous AIADMK regime.

He also claimed the Supreme Court’s stay confirmed that the ED's investigation violated federal norms. Dismissing AIADMK leader Edappadi K Palaniswami’s accusations, Stalin accused him of “mortgaging” his party to the Union government due to ED pressure.

Stalin emphasised that his participation in the May 24 NITI Aayog meeting was solely to represent Tamil Nadu’s economic interests and insisted that DMK will not compromise on the state's rights—reaffirming both federal integrity and national development priorities.

The High Court’s strong remarks and the Supreme Court’s stay have significantly altered the legal and political narrative around the Tasmac controversy. With growing judicial scrutiny and political tensions over federal overreach, the future of the corruption investigations—and the reputation of the state-run liquor monopoly—remains uncertain.