The Kerala High Court on Friday dismissed an appeal by Cochin Minerals and Rutile Ltd (CMRL), clearing the way for the Enforcement Directorate (ED) to continue its money laundering investigation into the company’s financial transactions with Veena T, the daughter of former Chief Minister Pinarayi Vijayan.
A division bench consisting of Justice Raja Vijayaraghavan and Justice K V Jayakumar upheld a single-judge order from May 26, stating there was no reason to interfere with the prior decision. The bench also denied a request from CMRL’s legal counsel for a two-week stay on the order, which would have protected the company while it prepared an appeal to the Supreme Court.
Court Ruling on Agency Powers
In its decision to dismiss the appeal, the division bench clarified that the ED is not prevented from initiating civil actions under the Prevention of Money Laundering Act (PMLA) even in cases where a First Information Report (FIR) has not been registered or a formal complaint has not been filed regarding a scheduled offense.
The judges noted that the registration of a scheduled offense is a prerequisite only for initiating criminal prosecutions, rather than for exercising investigative powers or pursuing civil action under the PMLA. Based on this interpretation, the court rejected CMRL’s petition to invalidate the Enforcement Case Information Report (ECIR) registered by the ED.
This ruling supports the May 26 single-judge decision, which determined that the ED was legally permitted to proceed with its PMLA inquiry before the Serious Fraud Investigation Office (SFIO) filed a formal FIR or a final report.
Origins of the Investigation
Following the single-judge ruling, ED investigators conducted searches on May 27 at the residences of former Chief Minister Vijayan and several other individuals associated with the case.
The money laundering probe developed from earlier searches conducted by the Income Tax Department in January 2019 at CMRL’s offices and the private residences of its top executives. The SFIO subsequently initiated an investigation into the company’s financial transactions following a complaint lodged by BJP leader Shone George.
