In a setback for both Cochin Minerals and Rutile Limited (CMRL) and Veena Thaikandiyil aka Veena Vijayan, daughter of former Chief Minister Pinarayi Vijayan, the Kerala High Court on Friday dismissed an appeal filed by the company against a single-judge verdict allowing the ED to continue its money laundering probe.
The Kerala High Court has earlier rejected CMRL’s request to cancel the ED probe into Veena Vijayan’s firm, Exalogic Solutions Pvt. Ltd., for carrying out illegal financial transactions.
In its directive on Friday, the Bench of Justices Raja Vijayaraghavan V and K V Jayakumar passed the order on an appeal filed by the CMRL challenging a single judge's refusal to quash the ED's investigation into its activities.
Though the petitioner argued that registration of a predicate offence (an underlying criminal offence which generates illegal money and which is required to charge a person with a money laundering offence) is essential for ED to initiate a probe, the court observed that it was a prerequisite only for criminal prosecution and not for civil action like attachment or for inquiry under the Prevention of Money Laundering Act (PMLA).
"Non-registration of an FIR or non-filing of a complaint in respect of a scheduled offence will not bar the ED from initiating civil action under the Prevention of Money Laundering Act (PMLA). Registration of a scheduled offence is a pre-requisite only for a criminal prosecution and not for civil action or for exercise of inquiry powers under the Act," it observed.
The court also rejected the company's plea to quash the Enforcement Case Information Report (ECIR) registered by the Enforcement Directorate (ED). The Division Bench held that since the ECIR is not a statutory document, even the non-registration of ECIR does not impede the commencement of civil action.
The High Court also declined the request by the lawyer for Cochin Minerals and Rutile Ltd (CMRL) to protect it for two weeks so that it can move an appeal before the Supreme Court.
The May 26 single-judge verdict had held that the ED could proceed with its investigation under the PMLA even before the Serious Fraud Investigation Office filed a formal FIR or final report. Following this, the ED had conducted inspections at locations linked to Veena Vijayan, which ended in violence and mob violence.
The case stems from Income Tax searches conducted at the company's offices and the residences of its senior executives in January 2019. It was later investigated by the SFIO following a complaint filed by BJP leader Shone George.
