Supreme Court Expresses Inclination To Transfer Gold Smuggling Case Trial From Kerala To Karnataka

The Supreme Court on Thursday(March 20) orally expressed a prima facie inclination to transfer the trial of the money laundering case related to the 2020 gold smuggling case from Kerala to Karnataka.

The Court orally observed that since the prima facie allegations are "serious", the plea of the Enforcement Directorate (ED) to transfer the trial should not be opposed.

A bench of Justice M.M. Sundresh and Justice Rajesh Bindal was hearing the transfer petition filed by the Enforcement Directorate (ED) in 2022 seeking to transfer the trial of the Prevention of Money Laundering Act (PMLA) case, at present before the Special PMLA Court at Ernakulam, to a Special Court for PMLA cases in Karnataka.

When the matter was taken up Justice Sundresh orally remarked,"allegations are serious and why does the [ED] not go for transfer".

This was orally stated after the State of Kerala sought a passover since Senior Advocate Kapil Sibal, for the State, was busy in another Court. 

When Senior Advocate Jayant Muthuraj, appearing for some accused, submitted that notice has to be served on the additional accused added in the case through the supplementary complaint, Justice Sundresh said: "In all fairness, you should not even oppose this(transfer petition)."

When the matter was taken up again, Sibal opposed the need for transfer. He submitted that the ED's allegations were that the State was influencing the investigation. However, since the investigation is now over and charges have been framed, there was no need to transfer, Sibal said.

Sibal also pointed out that the ED initially sought transfer to Karnataka, but now they do not want to transfer the matter to Karnataka. He implied that this was because a non-BJP government came to power in Karnataka in 2023.

"Why did they need Karnataka then and why do they don't need it now?," Sibal asked.

The bench told Advocate Kanu Agarwal, appearing for the ED, that the notice has to be issued to the newly added accused persons as well so as to avoid arguments of prejudice raised by them in the future. The bench reiterated its prima facie view that the matter needed to be transferred.

"Once you make other accused also parties, they also need to be heard. Otherwise, it will be a technical problem. Though prima facie we feel...(matter has to be transferred)," Justice Sundresh observed.

"Now they don't want Karnataka," Sibal reiterated.

"We can have Karnataka," Justice Sundresh said, indicating that the matter can be transferred to Karnataka. "I have no problem with Karnataka," Sibal replied. Justice Sundresh then told the ED's counsel that the matter can be transferred to Karnataka if the ED was sticking on to its origial stand.

"Now the senior counsel for the respondent(State of Kerala) is saying that he has no objection to your original stand (transfer to Karnataka). If you stick on to this...," Justice Sundresh said.

Sibal then questioned the need for transfer at all, when all the accused persons were in Kerala and the investigation was over. Advocate Krishna Raj, appearing online for accused 1 & 2, said that it was curious to see the State opposing the transfer when his clients were not objecting to it. Krishan Raj also contested Sibal's claim that the investigation was over, saying that his client had given a S.164 CrPC statement.

Ultimately, the matter was adjourned by two weeks to enable the ED to implead the newly added accused in the transfer petition.

The smuggling came to light after the Customs Commissionerate (Preventive), seized gold worth ₹14.82 crore at the Trivandrum International Airport in July 2020. The contraband was carried in the diplomatic baggage addressed to the consulate of the United Arab Emirates (UAE) at Thiruvananthapuram.

As per the transfer petition, the ED claims that a "free and fair trial" of the case is not possible in Kerala due to the close nexus between the accused and top officials and functionaries in the Kerala Government. The agency has said that the four accused persons in the case are highly influential and have close nexus with the top officials in the Kerala Government. One among the accused is M Sivasankar, an IAS officer of Kerala cadre who was the Principal Secretary to the Chief Minister of Kerala. The other accused persons are PS Sarith, Swapna Suresh and Sandeep Nair.

The ED alleges that the State Police, at the behest of highly influential persons, is trying to derail the trial in the case and is pressurising the accused persons to retract their statements recorded under Section 50 of the PMLA.  

It is said that accused Swapna Suresh, while she was under custody, had filed an application for protection stating that certain officials were threatening her against disclosing the names of persons in high positions. Another accused, Sandeep Nair, after getting bail in the case, filed a complaint alleging that the ED investigating officer had coerced him to name the Chief Minister and other Ministers in the case.

The Kerala Police registered an FIR against the ED officials alleging fabrication of evidence and the Kerala High Court stayed the FIR proceedings. The Kerala Government also constituted a judicial commission against the ED investigation. However, the Kerala High Court stayed the functioning of the Commission.

Case Details: DIRECTORATE OF ENFORCEMENT v. SARITH P.S. AND ORS|T.P.(Crl.) No. 449/2022