Authority: High Court of Judicature at Madras

Order Date: 28-08-2026

Case Overview

  • Parties: Petitioner S. Karthick @ Mulanoor Karthick, son of Shanmugavel, residing at No.304, Annai Apartments, Erode Road, Karur; Respondent: The State represented by the Inspector of Police Special Investigation Cell, Directorate of Vigilance and Anti‑Corruption, Chennai.
  • Nature of Proceeding: Application for bail (CRL OP No. 23636 of 2026) by the seventh accused (A7) in Crime No. 5 of 2026, investigated by the Vigilance and Anti‑Corruption (V&AC) Directorate.
  • Arrest & Custody: Petitioner arrested on 30‑07‑2026; police custody from 07‑08‑2026 to 10‑08‑2026; earlier custody on 30‑06‑2026 in unrelated Crime No. 205 of 2026.
  • Background of FIR: FIR registered on 28‑07‑2026 based on two petitions (dated 18‑05‑2023 and 03‑01‑2025) and a counter‑affidavit filed by the Enforcement Directorate in SLP (Criminal) No. 7958 of 2025. The FIR alleges corruption in TASMAC bar tendering.
  • TASMAC Data: 5,380 liquor‑selling retail shops and 3,240 TASMAC bars operate in Tamil Nadu. In 2021, public tenders were called for 857 bars in Coimbatore, Nilgiris, Tiruppur, Erode, Namakkal and Karur districts.
  • Alleged Violations: District Managers allegedly violated tender rules; tenderers formed a cartel, submitting Earnest Money Deposits and Demand Drafts from the same bank. Of the 857 bars, 284 were “closed on paper” but operated without licence.
  • Specific Allegations Involving Petitioner:
  • In Sivaganga district, a person deposited Rs.25,00,000 and 42 Demand Drafts for bar tender applications, allegedly on petitioner’s direction.
  • In Karur district, petitioner and associates formed a syndicate called “Karur Gang”, running all bars and pressurising TASMAC officials to allot bars to their nominees.
  • Petitioner and associates allegedly collected party funds from bar owners.
  • Rathesh Raj Shanmugavel acted as a power broker, directing the then Managing Director of TASMAC (referred to as A2) and influencing liquor brand approvals, tender outcomes and official transfers, in collusion with Mr. Bhaskar, PA to the first accused.
  • Legal Provisions Invoked: Offences under IPC §§ 120‑B, 167, 409, 420, 109; BNS §§ 61(2), 201, 316(5) (2023); Prevention of Corruption Act, 1988 §§ 13(2) read with 13(1)(a), 7(c) read with 12.
  • Counsel Submissions: Senior Counsel Mr. N.R. Elango argued petitioner’s innocence, lack of depositor details in FIR, that FIR stemmed from ED’s counter‑affidavit, and that TASMAC audits showed no financial irregularities. He cited a Supreme Court stay against coercive action on TASMAC officials and highlighted that petitioner had already secured bail in Crime No. 205 of 2026 but remained detained.
  • Prosecution Submissions: Public Prosecutor Mr. John Sathyan contended the case rests on two petitions, not merely the ED affidavit, detailing a conspiracy causing loss of several hundred crores of state revenue. He described the modus operandi of using dummy licence holders and parallel bar operations, and stressed the need to interrogate both petitioner (A7) and the missing sixth accused (A6).
  • Judicial Reasoning:
  • The court found serious corruption allegations with substantial revenue loss.
  • Investigation had been underway for less than a month; granting bail at this stage could jeopardise evidence collection and witness testimony.
  • Contact details on petitioner’s mobile linked him to former minister Senthil Balaji (Accused 1) and TASMAC officials, indicating close association.
  • Cited Supreme Court precedents (e.g., State of Andhra Pradesh v. Suda Suresh Veera Venkata Naga Raju SLP (Cri.) No. 12344 of 2026; P. Chidambaram v. Directorate of Enforcement 2019; Rohit Tandon v. Enforcement Directorate AIR 2017 SC 5309) emphasizing the need to protect investigation in economic offences.
  • Applied Justice V.R. Krishna Iyer’s test (nature of accusation, evidence, severity of punishment, surety independence) and Justice Pardiwala’s view that public justice may outweigh individual liberty in corruption cases.
  • Missing Accused: The sixth accused (A6) is at large; interrogation of both A6 and petitioner deemed essential to unravel the conspiracy.

Final Outcome

  • The bail petition filed under CRL OP No. 23636 of 2026 is dismissed. The petitioner remains in custody pending further investigation.

Topics: Court Bail Decision, TASMAC Bar Tender Corruption