High court cancels plea, asks ED to probe in Pinarayi Vijayan daughter case

The Kerala High Court on Friday dismissed an appeal filed by Cochin Minerals and Rutile Limited (CMRL), refusing to interfere with the Enforcement Directorate's (ED) investigation into the company in a case linked to allegations involving former Kerala Chief Minister Pinarayi Vijayan's daughter, Veena Thaikkandiyil.

Division Bench comprising Justices Raja Vijayaraghavan V and KV Jayakumar upheld an earlier order of a single judge that had declined to quash the ED probe into the company's affairs.

As per a Bar and Bench report, CMRL had argued that the ED could not initiate proceedings under the Prevention of Money Laundering Act (PMLA) without the registration of a predicate or scheduled offence. The company also sought quashing of the Enforcement Case Information Report (ECIR), which forms the basis of the agency's investigation.

Rejecting the contention, the High Court observed that the existence of a scheduled offence is necessary only for criminal prosecution under the PMLA and not for the ED's civil powers of inquiry and attachment.

In its order, the Bench said, "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 further added, "As regards the prayer to quash the ECIR, we hold that since the ECIR is not a statutory document and even the non-registration of ECIR does not impede the commencement of civil action, the prayer to quash ECIR cannot be granted in this case."

WHAT IS THE CMRL ISSUE?

CMRL, a Kerala-based public limited company engaged in the manufacture of synthetic rutile and other industrial chemicals, has been under scrutiny over allegations that it made illegal payments to Exalogic Solutions Pvt Ltd, an IT company owned by Veena Thaikkandiyil. The matter is also being investigated by the Serious Fraud Investigation Office (SFIO).

The appeal challenged a May 26 order of Justice TR Ravi, who had dismissed the company's petition on the ground that it was premature and noted that the SFIO had already filed a complaint alleging offences under the Companies Act that qualify as scheduled offences under the PMLA.

CMRL also argued before the Division Bench that it had suffered prejudice due to delays in the proceedings and because the single judge relied on material submitted by the ED after the matter had initially been reserved for judgment. The company contended that it was denied an adequate opportunity to respond to those submissions.

However, the Division Bench declined to accept the challenge, clearing the way for the ED to continue its investigation into the allegations.

- Ends