Kerala High Court Upholds Stay On Judicial Commission Inquiry Into ED's Probe In Gold Smuggling Case

The Kerala High Court on Friday (September 26) upheld a Single Judge's interim order staying the State-appointed Inquiry Commission to probe if the Enforcement Directorate and other central agencies are falsely implicating political leaders in the State, including its CM Pinarayi Vijayan, in the gold smuggling case.

The gold smuggling case involved seizure of 30 Kgs gold worth Rs.14.82 Crores at the Thiruvananthapuram International Airport on July 6, 2020. It was allegedly marked as 'Diplomatic Baggage' being sent to the UAE Consulate.

During the course of investigation, offences under the Unlawful Activities (Prevention) Act, 1967 (UAPA) and Prevention of Money Laundering Act, 2002 (PMLA) also came to light. Thereupon, the National Investigation Agency (NIA) and ED also registered cases.

Prime accused in the case, Swapna Suresh and Sandeep Nair were allegedly forced by the ED to sign statements implicating the CPI(M) backed Chief Minister.

The ED had filed a writ petition challenging the notification of the Inquiry Commission, headed by former HC judge Justice V.K. Mohanan. The Single Judge had then stayed the same, stating,

"Coming to the merits of the matter, as noted, the inquiry is ordered into the question whether the contents of a voice clip and a letter stated to have been issued by the accused persons in a gold smuggling case investigated by the various central agencies including Directorate of Enforcement in terms of the provisions of the PML Act would reveal any conspiracy to falsely implicate the leaders of the political front of the State. As held by this Court in Ext.P2 judgment, the question of conspiracy in a case of this nature is one to be examined by the Special Court supervising the investigation. If parallel investigations and inquiries are conducted into questions of the said nature, I am of the prima facie view that the same would impede and derail the investigation and would ultimately go to the benefit of the accused, defeating the object of the legislation under which the accused are booked. In the said view of the matter, I am inclined to admit the writ petition and pass an interim order as prayed for in the matter. Ordered accordingly." 

The Division Bench of Justice Sushrut Arvind Dharmadhikari and Justice Syam Kumar V.M. today upheld the stay. In pronounced in open Court, "We have affirmed the interim order passed by the learned single judge whereby it has been held that Enforcement Directorate is amenable to writ jurisdiction. Writ Appeal is dismissed."

The Single Judge had also considered the question whether ED can prefer a writ petition. It had held thus:

"Insofar as the Directorate of Enforcement is a statutory body, the contention that it is only a Department of the Central Government is only to be rejected. The proposition that a statutory body is entitled to file a writ petition invoking Article 226 of the Constitution cannot be doubted. In other words, the Directorate of Enforcement is certainly entitled to institute a writ petition in its name...Deputy Director of Enforcement is a statutory authority under the PML Act and in that capacity, he is certainly entitled to file a writ petition. As such, even assuming that the Directorate of Enforcement is not entitled to institute a writ petition in its name, it cannot be said that the Deputy Director of Enforcement has no locus standi to institute the writ petition." 

Case No: WA 1532/ 2021 in WP(C) No. 13112/2021

Case Title: State of Kerala v. Enforcement Directorate

Citation: 2025 LiveLaw (Ker) 604

Click to Read/Download Judgment

Click to Read/Download Interim Order In WP(C) NO. 13112 of 2021

Click to Read/Download Judgment in W.P(C).Nos. 7641 and 8920 of 2021