A division bench comprising Justices Raja Vijayaraghavan V and K V Jayakumar directed the Enforcement Directorate not to initiate any fresh action against CMRL until the court delivers its verdict on Friday. The bench, however, clarified that the interim protection is limited solely to the company and does not extend to other accused individuals linked to the case.
The court specifically stated that proceedings against other accused persons, including Veena Thaikkandiyil, daughter of former Kerala Chief Minister Pinarayi Vijayan, may continue without restriction.
CMRL has been under the scrutiny of the Enforcement Directorate over allegations that it made illegal payments to Exalogic Solutions, an information technology company owned by Veena Thaikkandiyil. The company had approached the High Court in 2024 seeking to quash the money laundering investigation initiated by the agency.
The legal challenge suffered a setback on May 26 when a single judge dismissed the petition, observing that the plea had been filed at a premature stage. The court further noted that the Serious Fraud Investigation Office (SFIO) had already filed a complaint against CMRL under provisions of the Companies Act. The court observed that such offences could constitute predicate offences under the Prevention of Money Laundering Act, thereby providing a basis for the Enforcement Directorate’s investigation.
Following the dismissal of its petition, CMRL challenged the order before a division bench of the High Court. The appeal assumed greater significance as it came a day after the Enforcement Directorate conducted searches at the residence of former Chief Minister Pinarayi Vijayan and members of his family.
During the hearing, Senior Advocate Sidharth Luthra, appearing for CMRL, argued that the Enforcement Directorate lacked jurisdiction to initiate proceedings in the absence of a First Information Report concerning the alleged underlying offence. He contended that the agency could not proceed without such a foundational criminal case.
Opposing the plea, Additional Solicitor General A R L Sundaresan argued that the Enforcement Directorate is not legally required to wait for a pre-registered First Information Report before initiating action under the Prevention of Money Laundering Act. He submitted that the summons issued by the agency were intended to collect material and determine whether further investigation was necessary.
Special Counsel Zoheb Hossain also informed the court that the original summons issued in April 2024, which formed the basis of CMRL’s challenge, had ceased to be operative due to the passage of time.
After hearing detailed arguments from both sides, the division bench reserved its verdict and scheduled the matter for pronouncement on June 5. The forthcoming ruling is expected to be significant in determining the scope of the Enforcement Directorate’s authority to pursue money laundering investigations linked to alleged corporate and financial irregularities, while also shaping the future course of the high-profile case involving CMRL and individuals connected to it.
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