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The Kerala High Court on Monday, October 26, stayed the Vigilance FIR and further investigation against former Chief Minister Pinarayi Vijayan, his daughter Veena T and former minister PA Mohamed Riyas in the CMRL-Exalogic case. The Division Bench also put on hold the single judge’s order that had directed the registration of the case.
A Bench comprising Justices K Natarajan and Johnson John admitted the appeals filed by the three and scheduled them for final hearing after three weeks. The interim order came after the court heard arguments from the appellants, the state government, the Directorate of Enforcement (ED) and the lawyer who initiated the writ proceedings.
On October 21, the Supreme Court had set aside the order that had prevented them from pursuing the appeals and directed that the division bench of the High Court should consider the matter.
The case concerns allegations surrounding payments made by Cochin Minerals and Rutile Limited (CMRL) and its associate concern to Exalogic Solutions Pvt Ltd, a company founded by Veena. The allegations include possible corruption and the use of financial transactions to confer undue benefits. They remain allegations and have not been established through a criminal trial.
As per reports the appeals challenge a single judge’s decision directing the Vigilance and Anti-Corruption Bureau (VACB) to register an FIR under the Prevention of Corruption Act based on information supplied by the ED. The judge had also invalidated the state government’s decision to conduct a preliminary inquiry through a Special Investigation Team (SIT).
Senior Advocate N Hariharan, appearing for the appellants, argued that the original petitioner, advocate K M Shajahan, should have first pursued the procedure available under Section 175 of the Bharatiya Nagarik Suraksha Sanhita (BNSS), rather than approaching the High Court directly.
Hariharan questioned the single judge’s authority to direct the registration of an FIR, contending that decisions on initiating a criminal investigation fall within the responsibilities of the executive and investigating agencies. He further argued that the petition raised issues resembling public interest litigation but had not followed the applicable procedural requirements.
Another central issue raised by the appellants was the ongoing controversy over the jurisdiction of the Serious Fraud Investigation Office (SFIO). Hariharan argued that the transactions had been assigned to the SFIO and invoked Section 212 of the Companies Act to contend that another agency could not investigate the same transactions while the statutory restrictions applied.
The appellants also disputed whether the information forwarded by the ED disclosed a cognisable offence under the Prevention of Corruption Act. Their counsel argued that the alleged payments to Veena’s company, by themselves, did not establish that Pinarayi Vijayan or Riyas had received an unlawful benefit.
Senior Advocate Sidharth Luthra, also appearing for the appellants, argued that neither the SFIO nor the affected parties had been included in the original proceedings. He submitted that the prescribed statutory process, if followed, would have allowed the investigating authorities or a magistrate to assess whether the information justified criminal proceedings.
Luthra also referred to the Supreme Court’s intervention in the case and challenged the reasoning adopted by the single judge on the state's obligation to register an FIR following information received under Section 66 of the Prevention of Money Laundering Act (PMLA).
Appearing for the state, Advocate General K Jaju Babu said the government had initially opted for a preliminary inquiry after receiving information from the ED. The government subsequently constituted an SIT to examine the material before deciding on further action.
The Advocate General said the government had accepted the single judge’s direction and proceeded to register the FIR after the court examined the ED’s material and concluded that a criminal case was warranted. He opposed the stay.
Additional Solicitor General P Sreekumar, appearing for the ED, argued that state authorities were required to register an FIR when information received by them disclosed a cognisable offence. He maintained that the single judge was justified in directing the registration of the case.
The ED also disputed the appellants’ reliance on the Companies Act, arguing that the restrictions concerning SFIO investigations did not automatically prevent proceedings under the PMLA. The agency sought permission for the investigation to continue.
Advocate V Sethunath, representing Shajahan, argued that approaching the magistrate was not an adequate alternative in the circumstances of the case. He maintained that he had already brought the information to the attention of the state police chief and had grounds to seek judicial intervention because of the state’s response.
The writ petitioner also challenged the legality of the state government’s decision to constitute the SIT and defended his right to initiate the proceedings.
