'Don't meddle with powers of other agencies': Supreme Court to ED in case against Pinarayi Vijayan

The Supreme Court temporarily stopped further investigation in the CMRL-Exalogic case involving former Kerala chief minister Pinarayi Vijayan, his daughter, his son-in-law and others. The pause lasts seven days. The court also set aside the Kerala High Court division bench’s October 15 decision and allowed the petitioners to pursue their appeals against the single judge’s October 9 order.

The court made an important distinction. It did not stop the FIR registered by the state on October 12. Instead, it stopped investigators from taking further steps while the high court considers whether a cognisable offence was made out and whether the investigation could legally continue. The bench said the petitioners needed to be heard.

The judges also warned the Enforcement Directorate not to exceed its statutory powers or interfere with other agencies. The ED’s proceedings, including a fresh ECIR, were left untouched. The high court division bench must now reconsider the interim relief and related legal questions.

The CMRL-Exalogic payoff case concerns alleged payments by state-owned Cochin Minerals and Rutile, or CMRL, to Exalogic Solutions Pvt Ltd. Exalogic was wholly owned by Veena T, the daughter of former Kerala chief minister Pinarayi Vijayan. The allegation is that CMRL paid the company without receiving services in return.

CMRL engaged Veena as an IT and marketing consultant in January 2017 on a retainership basis. However, tax assessments submitted by CMRL for 2013-14 to 2019-20 reportedly showed additional payments to Exalogic. The assessments allegedly indicated that no services had been rendered for those payments.

The Kerala High Court directed registration of a criminal case after the ED disclosed a cognisable offence to the state police. The Supreme Court paused further investigation for seven days so the petitioners could challenge the process. The ED also filed a fresh ECIR alleging money laundering from the same allegations.

The central figure in the case is more than ₹2.78 crore. That is the amount the state-owned CMRL allegedly paid to Exalogic Solutions Pvt Ltd, a company wholly owned by Veena T, Pinarayi Vijayan’s daughter. The allegation is that CMRL received no services in return.

The article states that CMRL made the payments to Exalogic between 2017 and 2020. It also says CMRL engaged Veena as an IT and marketing consultant in January 2017, on a retainership basis. Tax assessments covering 2013-14 to 2019-20 reportedly revealed additional payments for which no services had been rendered.

Those figures and dates form the factual basis of the payoff allegations. The ED informed the state police that the material disclosed a cognisable offence. The state then registered an FIR on October 12, but the Supreme Court stayed further investigation for seven days while the legal challenges proceed.

The Enforcement Directorate and Kerala police have different roles in the case. The ED told the court that it had performed its statutory duty after identifying a scheduled offence and filing a complaint for prosecution. It later filed a fresh Enforcement Case Information Report, or ECIR, alleging money laundering arising from the same allegations.

The Kerala police, acting after information from the ED, registered the FIR on October 12 and began the state investigation. The high court had directed registration of a criminal case after finding that the ED communication disclosed a cognisable offence. The Supreme Court said the state must perform its own statutory duty, while the ED must stay within its legal limits.

The court paused further investigation by the state, not the FIR itself. It left the ED’s proceedings untouched. It also asked whether information supplied under Section 66(2) was a mandate and highlighted Section 17A safeguards under the Prevention of Corruption Act.

Registering an FIR starts the formal criminal process by recording information about a suspected cognisable offence. Continuing an investigation is different. It involves steps such as gathering evidence, questioning people and developing the case. An FIR can therefore exist even when investigative action is temporarily halted.

Here, Kerala registered the FIR on October 12 after the ED sent information to the state police. The Supreme Court expressly refused to stay that registration. Instead, it directed that further investigation remain stayed for one week. The bench said the petitioners needed to be heard on whether a cognisable offence was established and whether the investigation could legally continue.

The pause protects the petitioners’ opportunity to challenge the high court’s process before more investigative steps occur. It does not decide the case’s merits. The court also said its order was not an opinion on the interim relief that the high court division bench should later fashion.

A scheduled offence is an underlying offence listed in the schedule to the Prevention of Money Laundering Act. It matters because alleged laundering must be connected to criminal proceeds from such an offence. An Enforcement Case Information Report, or ECIR, is the ED’s internal record that it has opened a money-laundering investigation. It is not the same document as a police FIR.

In this case, the ED told the Supreme Court that it had a scheduled offence, filed a complaint and could pursue prosecution. After the state registered a fresh FIR, the ED filed a fresh ECIR alleging money laundering from the same set of allegations. Vijayan was summoned for questioning on October 23.

The Supreme Court did not rule on the validity of that ECIR. It left the issue open for an independent proceeding by the petitioner. The court stayed only further state investigation for seven days and left the ED’s proceedings untouched.

Section 17A of the Prevention of Corruption Act requires prior approval from the competent authority before investigating certain acts by a public servant. The safeguard applies to decisions or recommendations made while performing official duties, where the law’s conditions are met. Its purpose is to ensure that official decision-making is not investigated without the required preliminary approval.

The Supreme Court raised this issue because the Kerala FIR was registered after the state received information from the ED. The bench noted that the FIR had not originated from the state’s own initiative. It said the court needed to examine whether Section 17A’s statutory safeguard applied before the investigation could proceed.

The judges did not finally decide whether approval was required in this case. They asked the high court division bench to apply its mind to that question, along with whether information received from the ED under Section 66(2) was a mandate. Further state investigation was paused for seven days.