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The Madras High Court, on Thursday, July 30, dismissed the anticipatory bail plea filed by former Tamil Nadu minister and DMK MLA V Senthil Balaji in connection with the Directorate of Vigilance and Anti-Corruption's (DVAC) investigation into alleged large-scale irregularities in the functioning of the Tamil Nadu State Marketing Corporation (TASMAC), holding that custodial interrogation was necessary in the case.
Justice GK Ilanthiraiyan rejected the plea after considering the nature of the allegations and the prosecution's contention that a detailed custodial interrogation was required to probe the alleged corruption.
The court observed that custodial interrogation was "very much necessary" in the case and took note of allegations that the accused had abused their official positions, entered into a criminal conspiracy and caused large-scale loss to the State exchequer.
Justice Ilanthiraiyan observed that "all the officials, who were close associates of Accused-1 Senthil Balaji, abused their official position and entered into a criminal conspiracy and committed the offences. By various means of manipulation, they obtained undue advantage and caused huge loss to the public exchequer."
The DVAC registered the FIR on July 28 against Balaji and six others over alleged irregularities in TASMAC's functioning between 2021 and 2025, when Balaji held the portfolios of Electricity and Prohibition & Excise.
The FIR names former TASMAC Managing Director S Visakan, former senior regional managers T Ramadurai Murugan and R. Panneerselvam, Balaji's former personal assistant Bhaskar, and associates Rathesh Raj Shanmugavel and S Karthik among the accused.
The investigation pertains to alleged manipulation of liquor procurement, transport contracts, bar licence tenders and other administrative decisions within TASMAC. The DVAC has alleged that bar licence tenders were manipulated through cartelisation, proxy ownership and consecutively numbered demand drafts.
The agency has further alleged that Rathesh Raj Shanmugavel functioned as an unauthorised power broker who exercised influence over liquor brand approvals, transfers of officials and allotment of bar licences, while former TASMAC Managing Director Visakan allegedly acted on his directions, which investigators claim originated from Balaji.
The FIR also alleges irregularities in transport tenders across 45 TASMAC depots, misuse of earnest money deposit demand drafts, and a systematic kickback mechanism involving inflated invoices raised by bottle supply companies. The DVAC further alleged that TASMAC retail outlets routinely collected amounts above the Maximum Retail Price, charging customers between Rs 10 and Rs 100 extra for regular liquor brands and up to Rs 500 for foreign liquor.
The prosecution alleged that the irregularities resulted in significant losses to the State exchequer and involved organised manipulation of procurement, tendering and licensing processes.
Opposing the anticipatory bail plea, State Public Prosecutor John Sathyan argued that the amount of Rs 17 crore currently identified was only "the tip of the iceberg" and that the overall loss to the exchequer could exceed Rs 100 crore.
The prosecutor submitted, "The previous regime tried to curtail all this. This needs elaborate custodial interrogation. Ample materials available. Huge amount of money involved and we don't know to what extent it'll go."
Senior Advocate NR Elango, appearing for Senthil Balaji, contended that there was no specific material directly implicating his client and stated that TASMAC functioned as an independent body in whose tendering process the minister had no role. "TASMAC is an independent body. The Minister does not have any role in it. The bottle companies among themselves have taken money. That is the allegation. Registration of FIR itself is not proper," he said.
Senthil Balaji also argued that the case was politically motivated and maintained that omnibus allegations had been levelled against him without furnishing details of specific tenders or contracts.
Meanwhile, the Supreme Court agreed to urgently hear on July 31 an appeal filed by Senthil Balaji challenging the High Court's refusal to grant anticipatory bail. During an oral mention before Chief Justice of India Surya Kant, senior advocates Kapil Sibal, Mukul Rohaatgi and Amit Anand Tiwari submitted that the FIR was based on allegations earlier referred to in an Enforcement Directorate affidavit filed before the apex court in separate proceedings.
