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Orders FIR Against Ex-CM Pinarayi Vijayan Based on ED's Recommendation Under PMLA
In a significant legal development, the on Friday directed the Director of the to register a first information report (FIR) against former Chief Minister Pinarayi Vijayan, his daughter Veena Thaikkandiyil, son-in-law and former minister P A Mohammed Riyas, and others in connection with the CMRL-Exalogic corruption case. The single bench of Justice A Badharudeen allowed a petition filed by activist-lawyer , setting aside the state government's earlier decision to form a for a instead of immediately registering a case. The court held that the information forwarded by the under contained disclosing under the , making it obligatory for the to register an FIR.
Background: The CMRL-Exalogic Pay-Off Allegations
The case revolves around alleged financial irregularities between and , a company owned by Veena Thaikkandiyil. According to the ED's investigation, CMRL paid Rs 2.78 crore to Exalogic under the guise of IT consultancy fees despite the firm allegedly providing no corresponding services. The payments were made during Vijayan's first term as Chief Minister (2016-2021). The initially unearthed the transactions, prompting the ED to launch a money-laundering probe under the PMLA.
In May this year, the ED conducted searches at Vijayan's residence and eight other premises linked to local leaders in Kozhikode district, claiming to have found evidence of money transfers through hawala routes. The ED's subsequent report to the alleged that Vijayan received Rs 3.28 crore from CMRL as a bribe through his daughter, with Riyas facilitating the transfer of funds to Dubai. The ED also sought an FIR against senior employees of Exalogic Solutions. Vijayan has consistently denied the allegations, asserting that his hands are clean and that the case is politically motivated.
The Petition and the State's Response
Advocate , who served as Additional Private Secretary to the late former Chief Minister V S Achuthanandan when he was Leader of Opposition, filed the challenging the state government's failure to register an FIR despite the ED's communication. The ED had forwarded its findings to the Chief on , under Section 66(2) of the PMLA, which mandates that information received by the ED may be forwarded to any other authority competent to investigate the . Instead of acting on this information, the ordered a by a headed by Additional Director General of Police H Venkatesh, with a decision on to be taken after the inquiry.
Shajahan argued that this approach defeated the purpose of the ED's recommendation and that the VACB, being the competent authority for Prevention of Corruption Act offences, should have immediately registered a case. He also submitted complaints to the and VACB Director on , but received no response. The ED, represented by standing counsel , supported the petitioner, submitting that its investigation had uncovered material indicating possible offences under the PC Act and other laws, and that no further was warranted.
Court's Reasoning: Obligation to Register FIR
Justice A Badharudeen delivered a detailed judgment emphasizing the mandatory nature of Section 66(2) PMLA. The court observed that when the ED forwards information disclosing the commission of a for which the is the competent authority, it is obligatory for the to register an FIR based on that information. The court rejected the state government's argument that the investigating agency could conduct a before registering an FIR. Citing precedents, the court held:
"In a nutshell, when an information under Section 66(2) of the PMLA is forwarded for registering FIR based on the inputs in the investigation initiated by the E.D. disclosing commission of a
or offences for which
is only having competence to register FIR, it is
for the
to register FIR for the offences disclosed in the information passed under Section 66(2) of the PMLA."
The court further examined the content of the ED's communication, which it said contained "
" disclosing
under the PC Act against the persons referred to. The court noted that the ED's information included detailed accounts of the alleged corporate fraud, making further enquiry unnecessary.
"When the information furnished by the
, under Section 66(2) of the PMLA, vide communication dated
, bearing F.No. ECIR/KCZO/11/2024, is considered in its entirety, it contains
disclosing, the commission of
under the PC Act by the persons referred to in the information....Thus, in the facts and circumstances of this case,
in the instant case and the matters disclosed in the information under Section 66(2) of the PMLA make it obligatory for the
to register the FIR, rulling out the scope of any other enquiry,"
the court held.
The court also addressed the preliminary objection raised by regarding the maintainability of the petition. The state argued that the petition, though portrayed as , was essentially a private and that the petitioner lacked . However, the court found that Shajahan, as a citizen of India and a who had brought serious corruption allegations to light, had the necessary standing.
Legal Implications: A Precedent for ED Recommendations
The judgment carries significant weight for the interplay between the PMLA and the Prevention of Corruption Act. By holding that an ED recommendation under Section 66(2) creates a on the to register an FIR, the court has clarified the procedure for handling cross-border corruption probes. This ruling may impact similar cases where the ED uncovers during money-laundering investigations and seeks to have them investigated by competent authorities.
The court's direction to the VACB Director to register an FIR
"based on the information furnished by ED under Section 66(2) of the PMLA for the offences disclosed in the said communication against all suspected persons"
underscores that the ED's findings are not merely advisory but carry
sufficient to trigger a criminal investigation. The court also ordered the DGP or the head of the SIT to hand over the ED's information to the VACB Director forthwith, and directed the ED to forward all necessary documents to the VACB.
Political and Practical Ramifications
This is not the first time Pinarayi Vijayan has faced a corruption probe. He was previously investigated by the in the SNC-Lavalin case, where he was discharged by a special court and the due to lack of evidence of personal financial gain. That case remains pending in the Supreme Court on a review petition. However, the current case arises from a different set of allegations and involves the ED, which has been particularly active in pursuing corruption cases against political figures across the country.
The ruling is politically significant as it brings a senior Politburo member directly under criminal investigation based on findings from an ED probe. The has vowed to fight both legally and politically, with plans to organize a seminar on the ED's "high-handedness" involving leaders from other opposition parties. The , which had initially opted for a , now has legal backing to proceed with the FIR, avoiding accusations of political collusion with the .
For legal practitioners, the case highlights the importance of Section 66(2) PMLA as a tool for . The court's insistence on immediate without a may be cited in future cases where ED recommendations are met with resistance from forces. The judgment also reinforces the VACB's jurisdiction over Prevention of Corruption Act offences, even when the initial probe is conducted by a central agency.
Conclusion: Next Steps
The has directed the VACB Director to register the FIR and . The state government has not yet indicated whether it will appeal the single-bench order before a division bench. Given the political sensitivity, a challenge is possible, but for now, the direction stands. The registration of an FIR does not amount to a finding of guilt; the allegations must still be investigated and proved. However, the order marks a critical juncture in the CMRL-Exalogic case, ensuring that the ED's findings will be subjected to a full criminal investigation under the Prevention of Corruption Act.
Legal observers will be watching closely to see how the investigation unfolds, particularly whether the VACB will take into account the ED's detailed findings or conduct an independent probe. The case also raises questions about the balance between autonomy and central agency directives—a recurring theme in India's federal criminal justice framework.
