{"id":362085,"date":"2025-09-30T11:00:13","date_gmt":"2025-09-30T05:30:13","guid":{"rendered":"https:\/\/www.scconline.com\/blog\/?p=362085"},"modified":"2025-10-06T09:41:39","modified_gmt":"2025-10-06T04:11:39","slug":"ker-hc-affirms-stay-on-state-ordered-judicial-enquiry-into-ed-uae-gold-smuggling","status":"publish","type":"post","link":"https:\/\/www.scconline.com\/blog\/post\/2025\/09\/30\/ker-hc-affirms-stay-on-state-ordered-judicial-enquiry-into-ed-uae-gold-smuggling\/","title":{"rendered":"\u2018Commission would interfere with PMLA investigations\u2019, Kerala HC affirms stay on State-ordered judicial inquiry into ED in UAE Gold Smuggling Case"},"content":{"rendered":"
\n

Kerala High Court:<\/span> The present intra-Court appeal assailed the interim order dated 11-08-2021, passed by the Single Judge, wherein the judicial inquiry ordered by the State of Kerala (‘State Government’), to investigate the involvement of the officers of the Enforcement Directorate (‘ED’) in implicating the Chief Minister Pinarayi Vijayan and other political leaders in the UAE Gold Smuggling case, was stayed.<\/p>\n

The Division Bench of Sushrut Arvind Dharmadhikari*<\/span> and Syam Kumar V.M., JJ., dismissed the State Government’s appeal observing that the Commission of Inquiry was only a fact-finding body and it would derail the course of justice to permit it to run parallel to the pending Prevention of Money Laundering Act, 2002<\/a> (‘PMLA’) proceedings.<\/p>\n

The Court upheld the stay on the judicial inquiry ordered by the State government to investigate alleged attempts by central agencies, including the ED and Customs, to implicate Chief Minister Pinarayi Vijayan and other political leaders in the UAE gold smuggling case.<\/p>\n

Background:<\/h3>\n

The State Government had constituted a Commission of Inquiry via a Notification, to investigate into an audio clip and a letter, alleging coercion of officers of the ED to implicate the Chief Minister, Pinarayi Vijayan, and other political leaders in the UAE gold smuggling case. The said Notification was challenged by the ED in a writ petition, contending that the constitution of the Commission was ultra vires<\/span> the provisions of the Commission of Inquiry Act, 1952 (‘Act of 1952’), since the subject matter pertained to investigations under the PMLA and Unlawful Activities (Prevention) Act, 1967<\/a> (‘UAPA’). Both were central legislation, and the subject matter of the inquiry was one related to the entries enumerated in List-I of the Seventh Schedule to the Constitution and therefore, the State Government was incompetent to order an inquiry into the same. The ED prayed for the stay of the Notification and for declaring that the Central Government would be the appropriate government to initiate any inquiry into the facts and material stated in the Notification. The Single Judge held that the ED had the locus<\/span> to file the writ petition and granted an interim stay of the Notification. Being aggrieved by the same, the State Government filed the present writ appeal.<\/p>\n

The State Government contended that the Single Judge erred in overlooking the fact that the ED was not a juristic person or a body corporate entitled to sue or liable to be sued in its name, thereby maintaining such a writ petition. The Single Judge also overlooked that no Statute conferred any authority on the ED to be treated as a body corporate, entitled to sue and liable to be sued under its name. It was also contended that the ED was only a department of the Central Government and, as such, it could not file a writ petition. The State Government’s objection regarding the maintainability of the writ petition was that if the Central Government was aggrieved by the impugned Notification, the only remedy available was under Article 131<\/a> of the Constitution<\/a> and thus, the Single Judge’s order deserved to be set aside.<\/p>\n

However, ED’s counsel submitted the writ petition was filed in the name of ‘Directorate of Enforcement represented by the Deputy Director’, which was in substance by a statutory authority empowered under the law. It was further submitted that the State Government could not, under the guise of ‘public importance’, trench upon a matter exclusively within the Union List. The doctrine of pith and substance required the Court to examine the true nature of the inquiry, which, in this case, was integrally bound to central investigations pending before the special investigating Courts.<\/p>\n

Analysis and Decision:<\/h3>\n

The Court opined that it was a settled legal position that writ appeals against an interim order were not maintainable and they would be maintainable only under certain circumstances where the interim relief granted was in the nature of a final order affecting the rights of the parties. The Court noted that in the present case, taking into consideration the controversy involved, the Single Judge concluded that the writ petition was maintainable and, with a view to avoiding creation of complications in the matter, had stayed the operation of the Notification.<\/p>\n

The Court further noted that the State Government’s objection as to the locus standi<\/span> was without any substance because the ED was a statutory body constituted under Section 36<\/a> of the Foreign Exchange Management Act, 1999<\/a> (‘FEMA’), and its officers were designated as statutory authorities under Sections 48 and 49 of the PMLA. The Court observed that the Single Judge was right to conclude that the writ petition filed through the Deputy Director was maintainable. The argument of non-juristic personality was a matter of form and not substance, and therefore, it could not defeat the statutory right of recourse under Article 226<\/a> of the Constitution<\/a>.<\/p>\n

Regarding the order of staying the Notification, the Court observed that the Single Judge took into consideration the fact that the continuation of the Commission would run parallel to and interfere with criminal investigations and prosecutions pending before the Special Court under Section 44 of the PMLA, and permitting the Commission at this stage to inquire into such matters would prejudice the accused, derail the course of justice, and was impermissible under the settled law that a Commission of Inquiry was only a fact-finding body without any adjudicatory powers.<\/p>\n

Consequently, the Court, while dismissing the writ appeal, affirmed the interim order passed by the Single Judge. The Court also pointed out that so far as the legislative competence of the State Government in issuing the Notification was concerned, the same should be decided by the Single Judge while finally hearing the writ petition.<\/p>\n

[State of Kerala v. Enforcement Directorate, 2025 SCC OnLine Ker 8944<\/a>, decided on 26-09-2025<\/span>]<\/p>\n

*Judgment authored by: Justice Sushrut Arvind Dharmadhikari<\/span><\/strong><\/p>\n\n

Advocates who appeared in this case :<\/p>\n

For the Appellants:<\/span> K. Gopalakrishna Kurup (Advocate General), V. Manu (Senior G.P.), T.B. Hood (Spl. G.P. To A.G), Government Pleader, V. Manu (Spl. G.P. To A.G).<\/p>\n

For the Respondents:<\/span> O.M. Shalina (Deputy Solicitor General of India), Suvin R. Menon (Senior Panel Counsel), Government Pleader, Jaishankar V. Nair, SC, Enforcement Directorate.<\/p>\n

Buy Constitution of India  HERE<\/a><\/h3>\n

\"Constitution<\/a><\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

“The audio clip and letter found, alleged coercion of ED officers to implicated CM Pinarayi Vijayan and other political leaders in a case involving seizure of 30 kg of gold worth Rs 14.82 crore at the Thiruvananthapuram International Airport on 06-07-2020, which was allegedly marked as ‘Diplomatic Baggage’ and was being sent to the UAE Consulate.”<\/p>\n","protected":false},"author":67011,"featured_media":362091,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[3,10],"tags":[33811,90048,35267,45033,63878,88950,2523,52444,34694,90047,44382,34504],"class_list":["post-362085","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-casebriefs","category-highcourts","tag-commission-of-inquiry","tag-commission-of-inquiry-act-1952","tag-enforcement-directorate","tag-judicial-inquiry","tag-justice-sushrut-arvind-dharmadhikari","tag-justice-syam-kumar-v-m","tag-Kerala_High_Court","tag-pinarayi-vijayan","tag-prevention-of-money-laundering-act-2002","tag-uae-gold-smuggling-case","tag-union-list","tag-unlawful-activities-prevention-act-1967"],"yoast_head":"\nUAE Gold Smuggling: Ker HC upholds stay on State ordered judicial inquiry into ED | SCC 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