Kerala High Court affirms stay on judicial enquiry ordered by State into ED

The Kerala High Court on Friday upheld the stay on the judicial inquiry ordered by the State government to investigate alleged attempts by central agencies, including the Enforcement Directorate (ED) and Customs, to implicate Chief Minister Pinarayi Vijayan and other political leaders in the UAE gold smuggling case. [State of Kerala and Ors. v Enforcement Directorate & Anr.]

The Division bench of Justices Sushrut Arvind Dharmadhikari and Syam Kumar VM dismissed the State government's appeal against a 2021 interim order passed by a single-judge which had stayed the judicial inquiry.

"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. We have upheld it. Writ Appeal is dismissed," the Court said.

The single judge's order had temporarily stayed the judicial inquiry commission set up in May 2021 under the Commissions of Inquiry Act, 1952, (COI Act) through a government notification, with retired Justice VK Mohanan as its chairperson.

The Justice VK Mohanan Commission was tasked to examine alleged jurisdictional overreach and political bias by central agencies, particularly the ED, in attempting to link the Chief Minister and other State officials to the gold smuggling case.

The gold smuggling case can be traced back to July 2020, when the ED investigated large scale gold smuggling and money laundering in Kerala which was operated through diplomatic channels.

The ED arrested several suspects including Swapna Suresh and Sandeep Nair. A voice clip of Suresh which surfaced online and a letter sent by Sandeep to the sessions judge in Ernakulam suggested that they were coerced by ED officials to implicate the then Principal Secretary to the Chief Minister and the Home Minister.

The State thus established the VK Mohanan Commission to probe these allegations.

The ED subsequently moved the High Court seeking to quash the State's notification constituting the Commission, contending that such exercise of power by the State was malafide and against the principles of federalism

Finding merit in the ED's contention, the single-judge issued an interim order staying the notification. That interim order was upheld by the Division Bench today.

Advocate Jaishankar V Nair appeared for Enforcement Directorate while advocate Suvin R Menon appeared for the Central government.