In a major relief to DMK leader and former Tamil Nadu minister V Senthil Balaji, the Supreme Court on Friday stayed his arrest in a corruption case linked to alleged irregularities in the functioning of the Tamil Nadu State Marketing Corporation (TASMAC), a day after the Madras High Court rejected his anticipatory bail plea.
A Bench led by Chief Justice Surya Kant granted interim protection from arrest while hearing Balaji's pre-arrest bail petition. However, the Court directed him to surrender his passport to the authorities.
Earlier in the day, Justice V Mohana recused herself from hearing the matter. The case was subsequently listed before a Bench comprising Chief Justice Surya Kant and Justice Joymalya Bagchi, which took it up at 1 pm on account of urgency.
The relief came after the Madras High Court dismissed Balaji's anticipatory bail application in a fresh case registered by the Directorate of Vigilance and Anti-Corruption (DVAC) in connection with the alleged TASMAC scam.
Following the High Court's order, senior advocates Kapil Sibal, Mukul Rohatgi and Amit Anand Tiwari urged the Supreme Court to hear the matter urgently, arguing that Balaji faced imminent coercive action.
The DVAC registered an FIR against Balaji and six others on Wednesday, alleging large-scale irregularities in liquor procurement, transport contracts, bar licence allotments and other administrative decisions within TASMAC between 2021 and 2025.
Balaji served as Tamil Nadu's Minister for Prohibition and Excise during part of the period covered by the allegations.
After registering the case, the agency carried out searches at over 40 locations across Tamil Nadu, including Balaji's residence in Karur and properties linked to his former associates and other accused persons.
The FIR also names former TASMAC Managing Director S. Visakan, former senior regional managers T. Ramadurai Murugan and R. Panneerselvam, Balaji's former personal assistant Bhaskar, alleged middleman Rathesh Raj Shanmugavel and S. Karthik.
'Karur Gang' and Alleged Scam
According to the DVAC, bar licence tenders were manipulated through cartelisation, proxy ownership and the use of consecutively numbered demand drafts.
The agency has alleged that Rathesh Raj exercised significant influence over TASMAC's functioning, including liquor brand approvals, transfer of officials and allocation of bar licences. Investigators claim that former Managing Director Visakan acted on Rathesh Raj's instructions, which allegedly originated from Balaji.
The FIR also refers to a network described by investigators as the "Karur Gang."
The agency further alleged that certain distilleries generated unaccounted cash by inflating invoices for used liquor bottles and paid kickbacks to TASMAC officials in exchange for favourable supply orders.
Additionally, the FIR claims that TASMAC outlets routinely charged customers above the maximum retail price, allegedly collecting between ₹10 and ₹100 extra on several liquor brands and as much as ₹500 more for foreign liquor.
Balaji Challenges FIR
Before the Supreme Court, Balaji argued that the DVAC FIR had substantially reproduced the contents of an affidavit and petition filed by the Enforcement Directorate (ED) in separate proceedings before the apex court.
His counsel, Amit Anand Tiwari, submitted that the FIR itself acknowledged that several portions were drawn from the ED's pleadings.
Arguing for anticipatory bail, Tiwari said Balaji was not a flight risk and that custodial interrogation was unnecessary. He also contended that TASMAC is an independent corporation and that Balaji's position as minister did not justify his arrest.
The defence further alleged that the FIR was politically motivated and amounted to interference with pending proceedings before the Supreme Court, noting that the apex court had already stayed aspects of the ED's investigation involving TASMAC and had directed that no coercive action be taken in those proceedings.
Balaji's plea also stated that the state's current position was contrary to the stand it had previously taken before the Supreme Court in the related litigation.
