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Supreme Court Rejects ED's Plea To Stay Kerala HC Judgment Granting Bail To M Sivasankar IAS In Gold Smuggling Case; Issues Notice

LIVELAW NEWS NETWORK
5 March 2021 6:35 AM GMT
Supreme Court Rejects EDs Plea To Stay Kerala HC Judgment Granting Bail To M Sivasankar IAS In Gold Smuggling Case; Issues Notice
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The Supreme Court on Friday issued notice on the petition filed by the Enforcement Directorate challenging the bail granted to M Sivasankar IAS, former Principal Secretary to the Chief Minister of Kerala, by the Kerala High Court in the gold smuggling case.Although Additional Solicitor General SV Raju, appearing for the ED, sought for a stay of the judgment, the bench comprising Justices...

The Supreme Court on Friday issued notice on the petition filed by the Enforcement Directorate challenging the bail granted to M Sivasankar IAS, former Principal Secretary to the Chief Minister of Kerala, by the Kerala High Court in the gold smuggling case.

Although Additional Solicitor General SV Raju, appearing for the ED, sought for a stay of the judgment, the bench comprising Justices Ashok Bhushan and R Subhash Reddy refused.

The Additional Solicitor General submitted that bail was granted by the High Court despite the finding that there were prima facie reasons to believe that the accused was involved in the offence.

The ASG said that the HC erred while granting bail on the ground that there was no likelihood of accused committing the offence while on bail. He argued that Section 45(1) of the Prevention of Money Laundering Act barred the grant of bail if there are reasons to believe that the accused is guilty.

At this point, Justice Ashok Bhushan asked if the proviso to Section 45 will not apply in the case as the accused is sick and the money involved in less than Rs one crores.

ASG Raju replied that Sivasankar was "faking sickness". He further said the amount involved is more than Rupees one crores. According to the ASG, the entire amount involved in the gold smuggling case should be considered and not just the amount to Rs 64 lakhs seized from the bank lockers

"What is the allegation against him?", Justice Bhushan asked.

"He was the Principal Chief Secretary of Kerala. He was involved in the conspiracy behind gold smuggling. He put the money in the locker", the ASG said.

"Some persons were involved in the smuggling of the gold. But he was not involved in the smuggling", Justice Bhushan remarked.

The ASG asserted that Sivasankar was involved in the conspiracy.

"He(Sivasankar) spoke to the customs officers for the release of consignment", ASG said.

Senior Advocate Jaideep Gupta, appearing for Sivasankar, refuted this submission of the ASG.

"This a very harsh case. They are going after this gentleman. They have not found anything against him. The ASG is making an incorrect statement that he has spoken to the customs officers", Gupta submitted.

"But it is said in the trial court order", Justice Bhushan replied in reference to the allegation of Sivasankar speaking to customs officers.

"In their(ED's) own affidavit in High Court, they have said that he has not spoken to Customs", Gupta said.

"Are you out on bail?", Justice Bhushan asked.

Gupta replied in the affirmavite.

"Alright. We are just issuing notice. Not putting you in jail", Justice Bhushan said.

At this point, the ASG made a request for stay of the judgment.

"Your lordships may stay the judgment", the ASG requested.

"No, No. He is already out", Justice Bhushan replied.

The matter will be listed next after six weeks.


It was on January 25 that the Kerala High Court granted bail to Sivasankar, after noting that Sivasankar had been under custody since October 28, 2020. The High Court also took into account the serious ailments of the civil servant. The HC observed that illnesses are an exemption from the rigour of Section 45.

"The fact that the applicant is suffering from various illness would also come to his benefit as the proviso to Section 45 exempts a sick person from the rigours of the Section.", the court observed.

The court also noted that he has been in custody since 28/10/2020 and was subjected to interrogation including custodial interrogation in a number of times.

"The present pandemic times also does not encourage incarceration of an accused indefinitely. I find no rationale for continuing the applicant's judicial custody as an under trial in this case The applicant is therefore, entitled to be released on regular bail on stringent condition.", Justice Ashok Menon said while directed his release on bail on execution of bond for 5,00,000/-with two solvent ₹ sureties for like amount each to the satisfaction of the Jurisdictional court.

The order passed by Justice Menon stated :

"There is no doubt about the complicity of the applicant and there are no reasonable grounds to believe that he is not guilty. However, it should also be considered whether there is a likelihood of the applicant committing any offence while on bail. I am afraid that the prosecution has not been able to establish this fact. Going by the allegations made by the ED, the applicant was indulged in laundering of 64 lakhs which was seized from the SBI locker. ₹ There is no indication that the applicant had anything to do with the locker belonging to A2 in Federal Bank. Thus the proviso to Section 45 (1) of the PMLA would operate in view of the fact that the money allegedly laundered is less than rupees one crore. The fact that the applicant is suffering from various illness would also come to his benefit as the proviso to Section 45 exempts a sick person from the rigours of the Section"

On October 28, the High Court had dismissed Sivasankar's anticipatory bail plea in the ED case observing that there were circumstances suggesting that he might be involved in money laundering with Swapna Suresh. The case relates to the seizure of 30 kg of 24 carat gold worth ₹14.82 crore at Thiruvananthapuram airport on July 5 by the Customs (Preventive) Commissionerate, Kochi, which was sought to be brought through the diplomatic consignment sent to UAE consulate at the State capital.

The case relates to the seizure of 30 kg of 24 carat gold worth ₹14.82 crore at Thiruvananthapuram airport on July 5 by the Customs (Preventive) Commissionerate, Kochi, which was sought to be brought through the diplomatic consignment sent to UAE consulate at the State capital.

Sivasankar came under the cloud of suspicion on account of his connections with the prime accused in the gold smuggling case, Swapna Suresh and P R Sarith. After the reports about gold smuggling surfaced in media, the state government suspended him from service last July for alleged violations of conduct rules.



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