‘ED officials expanding their powers day by day': Madras HC says agency had no power to seal film producer Akash Bhaskaran's premises

Indian Express

19-06-2025

In a setback to the Enforcement Directorate (ED), the Madras High Court has questioned the agency's authority under the Prevention of Money Laundering Act (PMLA) to seal premises that were locked at the time of a search, and reserved orders on a batch of petitions filed by Tamil film producer Akash Bhaskaran and businessman Vikram Ravindran.
The ED had conducted a search and seizure operation on May 16 at multiple premises linked to Bhaskaran and Ravindran, in connection with the alleged Rs 1,000-crore TASMAC scam. The petitioners alleged that the agency sealed their office and residence illegally, even though they were not present during the raid.
A Division Bench comprising Justices M S Ramesh and V Lakshminarayanan expressed concern over the ED's evolving interpretation of its powers, observing, 'Courts often remark that the PMLA (Prevention of Money Laundering Act) is an evolving legislation. But we find that it is actually the Directorate of Enforcement officials who are evolving day by day by expanding their powers.'
During the hearing on Tuesday, Additional Solicitor General S V Raju, appearing for the ED, acknowledged that the agency did not have the legal power to seal a locked premise under Section 17 of the PMLA. 'The ED does not have power to seal. The lordship is right in that aspect,' Raju said.
He explained that while the law allows ED officers to break open locks during a search, they chose not to in this case to avoid escalating the situation.
Instead, the agency pasted notices outside the premises, stating that they 'shall not be opened' and instructing the occupants to contact the agency – an action the court said could wrongly imply that ED had the authority to prohibit entry. 'By saying ED would 'permit' them to enter, it presumes ED has power to prohibit,' the Bench said.
The court had earlier asked the ED to produce material that justified the raids. When the agency submitted its evidence in a sealed cover, the Bench pointed out that the documents did not align with the submissions made by the ED. 'There's a divorce between the note and the submission,' Justice Ramesh observed.
The ED later agreed to withdraw the notices and return the seized materials, including phones, laptops, and hard drives taken from Bhaskaran's Alwarpet residence. Orders on interim applications have been reserved, while the main petitions have been adjourned by four weeks.
Bhaskaran, a relatively new name in the Tamil film industry, is the producer behind Dawn Pictures and is currently helming three of Tamil cinema's most anticipated films – Idli Kadai starring Dhanush, Parashakti featuring Sivakarthikeyan, and Silambarasan TR's STR 49. Collectively, these projects are estimated to be worth between Rs 400 and Rs 550 crore.
His name came up on the ED's radar not just for the simultaneous high-value productions but also for the alleged proximity to DMK and Udhayanidhi Stalin.
Of particular interest is Parashakti. Directed by Sudha Kongara and produced with a reported Rs 200 crore budget, the film is said to be a powerful political period drama centred on the anti-Hindi agitation in Tamil Nadu, with Sivakarthikeyan and Ravi Mohan in pivotal roles. The film was expected to release before the 2026 assembly polls. Its timing, amid national discussions on federalism, linguistic identity, and central overreach, has only sharpened speculation that Bhaskaran's cinematic ventures may also be seen as political expressions.
The ED's operations came just months before Parashakti is expected to enter its final production phase.
In their petitions, Bhaskaran and Ravindran claimed that neither had been named as an accused in any ongoing money laundering case. Senior counsel for Bhaskaran argued that the producer had no links to the TASMAC scam and that the seizure of his personal digital equipment was illegal. Ravindran, a director at Dawn Pictures, filed two petitions challenging the ED's sealing of his office at Semmenchery and a rented apartment at Poes Garden, arguing that the agency lacked legal backing for such action.
The court, while granting the ED time to clarify its position, questioned whether notices barring entry into premises amounted to sealing. 'No sane person would ignore such a notice and walk in. That fear itself shows it is a de facto sealing,' said Justice Lakshminarayanan.
The ED's counsel insisted that the search was based on 'credible information' and reiterated that Bhaskaran and Ravindran were not accused, but had failed to cooperate despite repeated attempts by the agency to contact them.