New Delhi,  The Supreme Court on Monday issued notice to Kerala government on a plea filed by the Enforcement Directorate seeking transfer of the trial in the gold smuggling case from the state to Karnataka.

The ED has alleged that "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.

A bench headed by Chief Justice U.U. Lalit and Justice S. Ravindra Bhat scheduled the matter for further hearing next week and allowed the application filed by the Kerala government seeking impleadment in the ED's petition and issued notice to the state government.

During the hearing, Solicitor General Tushar Mehta, representing the ED, referred to the averments made by Kerala government in its impleading application that the statements of accused Swapna Suresh regarding the involvement of those holding high political offices created riots in the state. He alleged that these statements are enough to conclude that free and fair trial is impossible in Kerala.

Mehta submitted that Kerala Police lodged an FIR against ED alleging fabrication of evidence, which was quashed by the Kerala High Court, and also cited allegations made by accused Swapna Suresh and other accused regarding pressure exerted by the state police.

After hearing the matter, the top court allowed the Kerala government to file its reply by the end of this week and said it will dispose of the matter on the next hearing.

The Kerala government, in its impleadment application, said: "It is submitted that if the transfer is allowed on the allegations now raised, it will have an adverse effect on the governance of the state. The State of Kerala is, therefore a proper and necessary party to this transfer petition. In so far as the transfer will have a bearing on the proposed 340 Cr PC enquiry before the special court, the state and its officers were necessary parties to the transfer petition."

The state government contended that nothing has been placed on record nor was it possible to allege that the whole of the state of Kerala cannot ensure a free, fair, and impartial trial.

"The Enforcement Directorate has not substantiated with evidence that the investigation carried on by them for more than one and half years has been hindered. There has not been a single incident in which Investigating Officers of the Enforcement Directorate were prevented from discharging their duties. They have been freely summoning witnesses and examining them. These include public servants holding important positions," added the state government, opposing ED's plea to transfer the case to Karnataka.