CMRL-Exalogic case: Kerala HC to decide if ED referral requires FIR
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Kochi: The Kerala High Court on Saturday questioned whether the state government could order a preliminary enquiry instead of registering an FIR after the Enforcement Directorate referred information to the State Police under the Prevention of Corruption Act in the CMRL-Exalogic case involving former Chief Minister and Leader of Opposition Pinarayi Vijayan, his daughter Veena Vijayan, her husband and former minister P.A. Mohammed Riyas, who is currently an MLA.
Justice A. Badharudeen said the court would examine whether the State Police had the discretion to conduct a preliminary enquiry after receiving information from the ED under Section 66(2) of the Prevention of Money Laundering Act (PMLA), or whether it was legally required to register an FIR.
The court directed the ED to submit, in a sealed cover, the communication it had sent to the State Police Chief and posted the matter for detailed hearing on September 29.
The ED strongly opposed the delay in registering an FIR. Its counsel told the court that the agency had shared information about the alleged commission of offences with the State Police Chief during its investigation and that the material disclosed offences requiring investigation by the State Police or the Vigilance and Anti-Corruption Bureau.
The agency maintained that the State Police had no discretion to conduct a preliminary enquiry after receiving such information and was required to register an FIR.
The court specifically asked whether the State Police had any option other than registering an FIR when information under Section 66(2) of the PMLA was forwarded to it.
Advocate General K. Jaju Babu defended the government's decision to order a preliminary enquiry, arguing that an FIR need not be registered immediately and that the police could first verify the information.
He also questioned the maintainability of the petition, arguing that it resembled a public interest litigation but had been filed with a vested interest.
The petitioner, meanwhile, argued that the Crime Branch Special Investigation Team constituted by the state government did not include the Vigilance and Anti-Corruption Bureau, despite the ED alleging offences under the Prevention of Corruption Act.
The ED said its investigation had uncovered transactions that required examination as possible predicate offences. It subsequently wrote to the State Police Chief under Section 66(2) of the PMLA, seeking action under the Prevention of Corruption Act.
After obtaining legal advice, the state government ordered a 30-day preliminary enquiry by a nine-member Crime Branch SIT. The government has maintained that Supreme Court rulings permit a preliminary enquiry in appropriate cases before an FIR is registered.
The High Court also referred to the requirement of a predicate offence for proceedings under the PMLA and questioned the ED about the legal basis for its action.
The ED explained that the Serious Fraud Investigation Office had initially registered proceedings over alleged offences under the Companies Act. During its investigation, the ED said, it came across material indicating possible offences under the Prevention of Corruption Act.
The case assumes significance as the High Court had in June allowed the ED's PMLA investigation into the CMRL-Exalogic transactions to continue, holding that the absence of an FIR relating to a scheduled offence did not prevent the agency from exercising its inquiry powers under the PMLA.
The latest hearing has brought the legality of the state government's decision to conduct a preliminary enquiry before registering an FIR to the centre of the dispute.
With IANS inputs