Kerala HC dismisses CMRL appeal against ED probe linked to Veena Vijayan
Follow TNM’s WhatsApp channel for news updates and story links.The Kerala High Court, on Friday, June 5, rejected an appeal filed by Cochin Minerals and Rutile Limited (CMRL) seeking to quash the Enforcement Directorate (ED) case against it in connection with the alleged money laundering linked to Exalogic Solutions Pvt Ltd, a company owned by Veena Vijayan, daughter of former Kerala Chief Minister Pinarayi Vijayan.A Division Bench comprising Justices Raja Vijayaraghavan V and KV Jayakumar upheld the May 26 order of single judge Justice TR Ravi, who had refused to interfere with the ED proceedings.Pronouncing the verdict, the Bench said the case required it to determine the legal nature and status of an Enforcement Case Information Report (ECIR) vis-à-vis an FIR under the Code of Criminal Procedure, 1973, and whether such an ECIR could be quashed.The Court also examined whether the ED’s powers of inquiry under Section 50 of the Prevention of Money Laundering Act (PMLA), which allow the agency to summon persons, examine them on oath and call for documents, could be exercised without a prior FIR or complaint involving a scheduled offence.Another issue before the Bench was whether the initiation of civil action under Section 5 of the PMLA, which deals with the provisional attachment of properties suspected to be proceeds of crime, and the exercise of powers under Section 50 required the prior registration of a scheduled offence.Answering these questions against the appellants, the Court held: “We hold that the non-registration of an FIR or non-filing of a complaint in respect of a scheduled offence will not bar the ED from initiating civil action under the PMLA.”On the challenge to the ECIR, the Court held that the plea was unsustainable.“As regards the prayer to quash the ECIR, we hold that since ECIR is not a statutory document, and even the non-registration of the ECIR does not impede the commencement of civil action, said prayer cannot be granted,” the Bench said.The Court added that the single judge had rightly rejected the plea and found no reason to interfere with the earlier judgment. “Appeal is dismissed,” the Bench said.Following the pronouncement of the judgment, counsel appearing for CMRL sought protection from coercive action for two weeks to enable the appellants to approach the Supreme Court. The Division Bench, however, declined the request.The appeal arose from proceedings initiated by CMRL and four of its officials, who had approached the High Court in 2024 seeking to quash the ECIR registered by the ED, the summons issued to them and all subsequent proceedings.On May 26, Justice TR Ravi dismissed the petition, holding that it had been filed at a premature stage. The judge also took note of a complaint filed by the Serious Fraud Investigation Office (SFIO) alleging offences under the Companies Act, which constitute scheduled offences under the PMLA.The controversy stems from allegations that CMRL paid money to Exalogic Solutions, an IT firm linked to Veena Vijayan, between 2017-18 and 2018-19 under agreements for software development, management and consultancy services.According to the Income Tax Department, Exalogic received approximately Rs 1.72 crore from CMRL despite not rendering the contracted services. The department’s Interim Board of Settlement later described the transactions as “illegal payments”. Subsequent investigations by the ED and the SFIO examined whether the payments constituted proceeds of crime under the PMLA.Veena Vijayan and Exalogic have denied any wrongdoing and maintained that the payments were part of legitimate business arrangements. No court has convicted Veena Vijayan, Exalogic, CMRL or Pinarayi Vijayan so far.The High Court’s ruling clears the way for the ED to continue its investigation into the alleged transactions and related financial records.
Follow TNM’s WhatsApp channel for news updates and story links.
THE Kerala High Court, on Friday, June 5, rejected an appeal filed by Cochin Minerals and Rutile Limited (CMRL) seeking to quash the Enforcement Directorate (ED) case against it in connection with the alleged money laundering linked to Exalogic Solutions Pvt Ltd, a company owned by Veena Vijayan, daughter of former Kerala Chief Minister Pinarayi Vijayan.
A Division Bench comprising Justices Raja Vijayaraghavan V and KV Jayakumar upheld the May 26 order of single judge Justice TR Ravi, who had refused to interfere with the ED proceedings.
Pronouncing the verdict, the Bench said the case required it to determine the legal nature and status of an Enforcement Case Information Report (ECIR) vis-à-vis an FIR under the Code of Criminal Procedure, 1973, and whether such an ECIR could be quashed.
The Court also examined whether the ED’s powers of inquiry under Section 50 of the Prevention of Money Laundering Act (PMLA), which allow the agency to summon persons, examine them on oath and call for documents, could be exercised without a prior FIR or complaint involving a scheduled offence.
Another issue before the Bench was whether the initiation of civil action under Section 5 of the PMLA, which deals with the provisional attachment of properties suspected to be proceeds of crime, and the exercise of powers under Section 50 required the prior registration of a scheduled offence.
Answering these questions against the appellants, the Court held: “We hold that the non-registration of an FIR or non-filing of a complaint in respect of a scheduled offence will not bar the ED from initiating civil action under the PMLA.”
On the challenge to the ECIR, the Court held that the plea was unsustainable.
“As regards the prayer to quash the ECIR, we hold that since ECIR is not a statutory document, and even the non-registration of the ECIR does not impede the commencement of civil action, said prayer cannot be granted,” the Bench said.
The Court added that the single judge had rightly rejected the plea and found no reason to interfere with the earlier judgment. “Appeal is dismissed,” the Bench said.
Following the pronouncement of the judgment, counsel appearing for CMRL sought protection from coercive action for two weeks to enable the appellants to approach the Supreme Court. The Division Bench, however, declined the request.
The appeal arose from proceedings initiated by CMRL and four of its officials, who had approached the High Court in 2024 seeking to quash the ECIR registered by the ED, the summons issued to them and all subsequent proceedings.
On May 26, Justice TR Ravi dismissed the petition, holding that it had been filed at a premature stage. The judge also took note of a complaint filed by the Serious Fraud Investigation Office (SFIO) alleging offences under the Companies Act, which constitute scheduled offences under the PMLA.
The controversy stems from allegations that CMRL paid money to Exalogic Solutions, an IT firm linked to Veena Vijayan, between 2017-18 and 2018-19 under agreements for software development, management and consultancy services.
According to the Income Tax Department, Exalogic received approximately Rs 1.72 crore from CMRL despite not rendering the contracted services. The department’s Interim Board of Settlement later described the transactions as “illegal payments." Subsequent investigations by the ED and the SFIO examined whether the payments constituted proceeds of crime under the PMLA.
Veena Vijayan and Exalogic have denied any wrongdoing and maintained that the payments were part of legitimate business arrangements. No court has convicted Veena Vijayan, Exalogic, CMRL or Pinarayi Vijayan so far.
The High Court’s ruling clears the way for the ED to continue its investigation into the alleged transactions and related financial records.
