CMRL-Exalogic case: Kerala High Court upholds Single Bench order, refuses to quash ED probe

Kochi: The Kerala High Court on Friday dismissed an appeal filed by Cochin Minerals and Rutile Ltd (CMRL), challenging an earlier order that had refused to quash an Enforcement Directorate (ED) investigation. The case pertains to allegations of money laundering linked to Exalogic Pvt Ltd, a company associated with Veena Vijayan, daughter of former Kerala Chief Minister Pinarayi Vijayan.

The Division Bench comprising Justice Raja Vijayaraghavan V. and Justice K.V. Jayakumar upheld the Single Judge’s decision, which had declined to interfere with the ongoing probe at a preliminary stage.

The Bench rejected CMRL’s contention that registration of a predicate offence was essential for the ED to initiate proceedings. Bar and Bench report said the court held that such registration is a prerequisite only for criminal prosecution under Section 3 of the PMLA and not for civil actions such as attachment under Section 5 or for the exercise of inquiry powers under Section 15.

“The registration of a scheduled offence is a prerequisite only for penal prosecution under Section 3 and not for civil action of attachment under Section 5 or the exercise of inquiry powers under Section 15 of the PMLA,” the Court ruled, as per Bar and Bench.

The court also declined to entertain CMRL’s plea seeking quashing of the Enforcement Case Information Report (ECIR), holding that the ECIR is not a statutory document and that its non-registration does not impede the commencement of proceedings under the Act.

The court’s ruling effectively allows the Enforcement Directorate to continue its investigation under the Prevention of Money Laundering Act (PMLA), rejecting CMRL’s plea for judicial intervention at this stage of proceedings.

Single Bench had refused interim protection against ED probe

CMRL had earlier approached the High Court seeking a stay on the ED investigation into financial transactions between the company and Exalogic Pvt Ltd. However, the Single Judge refused to grant interim relief and permitted the probe to continue.

The matter was placed before the Division Bench after CMRL challenged that order. The appeal was heard on Monday, during which the court was urged to grant interim protection while the case was examined in detail.

On that occasion, the court had directed that no further coercive steps be taken until the matter was finally decided, effectively putting a temporary hold on certain actions. With Friday’s verdict, that interim arrangement now stands concluded.

ED searches across multiple locations, including former CM’s residence

As part of the ongoing investigation, the Enforcement Directorate had carried out searches last week at around 10 locations. One of the premises searched included the residence of former Chief Minister Pinarayi Vijayan, where Veena Vijayan resides.

The searches were conducted under the provisions of the PMLA, with the agency examining financial transactions under scrutiny between CMRL and Exalogic.

With the court declining to grant relief to the company, the ED retains authority to proceed with questioning, collection of evidence and other procedural steps as part of the ongoing inquiry.