Kochi, 05 June (H.S.):
In a major boost to the Directorate of Enforcement (ED), the Kerala High Court on Friday dismissed an appeal filed by Cochin Minerals and Rutile Limited (CMRL) challenging the agency’s money laundering probe under the Prevention of Money Laundering Act (PMLA).
A Division Bench comprising Justice Raja Vijayaraghavan and Justice K.V. Jayakumar upheld an earlier Single Bench order permitting the ED investigation to continue. The court ruled that summons issued by the ED under Section 50 of the PMLA to CMRL office-bearers were legally maintainable and declined to quash the Enforcement Case Information Report (ECIR), which forms the basis of the agency’s investigation.
Citing the Supreme Court’s landmark judgment in Vijay Madanlal Choudhary vs Union of India, the High Court observed that the ECIR is not a statutory document and that there is no legal requirement under the PMLA to furnish a copy of it to the accused. The court noted that the ECIR may contain sensitive operational details, the disclosure of which could jeopardise investigations and frustrate efforts to trace and attach proceeds of crime.
Rejecting CMRL’s argument that the ED cannot initiate proceedings without a prior FIR or complaint involving a scheduled offence, the Bench clarified that the agency is empowered to begin an inquiry whenever information suggests the existence of proceeds of crime. It said such inquiries are foundational to gathering evidence and are distinct from criminal prosecution.
The court further observed that registration of a scheduled offence is a prerequisite only for criminal prosecution under Section 3 of the PMLA and not for civil actions such as attachment of assets under Section 5 or the exercise of inquiry powers under Section 50.
The High Court also declined CMRL’s request to stay further proceedings to enable it to approach the Supreme Court.
The verdict is expected to provide fresh momentum to the ED’s investigation into alleged financial irregularities involving CMRL and Exalogic Solutions Pvt. Ltd., owned by Veena T., daughter of former Chief Minister Pinarayi Vijayan. The agency had conducted searches at multiple locations across Kerala and Bengaluru on May 27 after securing a favourable Single Bench ruling.
The ED probe centres on alleged fictitious cash expenses of ₹182 crore over a 15-year period, suspected to have been used for illicit payments. The case gained further significance after the Serious Fraud Investigation Office (SFIO) filed a prosecution complaint in April 2025 against 12 individuals, including Veena T., alleging corporate fraud and offences falling under the ambit of the PMLA.
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Hindusthan Samachar / Arun Lakshman
