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Reserves Verdict on Mandatory FIR from ED Report Against Pinarayi Vijayan
The on Tuesday reserved its verdict on a critical plea seeking a direction to register a First Information Report (FIR) under the against Leader of Opposition Pinarayi Vijayan, his daughter T Veena, and son-in-law P A Mohammad Riyas. The case, arising from the CMRL Exalogic pay-off controversy, centers on whether the state police are bound to register an FIR upon receiving a report from the under , or whether a preliminary inquiry is permissible.
Justice A. Badharudeen, presiding over the matter, heard detailed submissions from petitioner’s counsel , Advocate General , and the standing counsel for the ED. The court also perused a from the ED containing its findings against the former Chief Minister and his family members. The verdict, now awaited, will have significant implications for the interplay between the PMLA and the PC Act, as well as the obligations of investigating agencies when confronted with intelligence from specialized bodies.
Background: The CMRL Exalogic Pay-Off Case
The CMRL Exalogic case involves allegations of hawala transactions amounting to crores of rupees, allegedly routed to benefit Pinarayi Vijayan, his daughter Veena, and her husband Riyas. The ED, which has been investigating the money laundering angle under the PMLA, claimed to have gathered evidence of these illicit financial flows. In a press release dated , the ED stated that it had identified and that the accused had committed offences under the PMLA.
Subsequently, on , the ED sent a formal letter to the recommending the registration of an FIR under the PC Act against the three individuals. However, instead of acting on that recommendation, the state government, through the Home Secretary, directed the DGP to entrust the matter to the and to constitute a for a . This decision triggered the present petition, filed by activist K M Shajahan, who argued that the police had no legal basis to conduct a preliminary inquiry when the ED had already provided a credible report.
The Core Legal Question: Mandatory FIR or ?
During the hearing, Justice Badharudeen grappled with the pivotal issue: whether information furnished by the ED under Section 66(2) of the PMLA obligates the state police to register an FIR without any further verification. The court observed that while registration of FIR is generally mandatory upon receipt of information disclosing a , an exception exists where the agency feels a need for more clarification.
“This is the law. Registration of FIR is mandatory. But whether it is mandatory is to be decided on the facts involved in each case. In a case, which would show that another to go for more clarification is necessary, such a course of action is not fully prohibited. That is an exception. But the general principle is a report or an information given by the ED under Section 66(2) is a to find that there are truth in allegation which would require investigation by registering FIR. This is the law,” the court remarked.
This nuanced stance suggests that the court leans towards recognizing the ED’s report as a sufficient basis for initiating a criminal investigation, but leaves room for case-specific assessments. The judge further clarified that the decision would be made after examining the contents of the and the arguments of all parties.
Arguments of the Petitioner and the ED
The petitioner, represented by Advocate , contended that the formation of the SIT was itself illegal. He pointed out that the SIT did not include any member from the , which is the designated agency for PC Act offences. Moreover, he argued that constituting such a team without a cabinet decision was , as a government secretary could not override the established hierarchy. “You are pointing this out because they have formed an SIT? Is there any prohibition for forming an SIT even in the presence of a vigilance dept?...So, according to you, formation of an SIT without a Cabinet decision is also wrong,” the court queried, indicating that it was weighing this argument.
The ED, supporting the petitioner, submitted that when an receives credible information from another agency, it must register an FIR as a fundamental step in criminal investigation. The ED’s counsel argued that there was no scope for a preliminary inquiry in this case, as the ED had already conducted a thorough probe and forwarded its findings.
The State’s Defense and Court’s Observations
Advocate General opposed the petition on multiple grounds, including maintainability and prematurity. He contended that the petitioner had filed a representation to the vigilance director only two days before approaching the court, and that the state had not had adequate time to respond. “The petition is premature,” he argued.
However, the petitioner countered that the state’s order for a preliminary inquiry was issued the day after his complaint, effectively preempting any possibility of an FIR. The court noted this timeline but did not immediately rule on maintainability.
On the substantive issue, the AG argued that if the feels some verification is required, a preliminary inquiry is desirable. He also characterized the ED as an “” rather than a full-fledged like the police. This drew a sharp response from the bench: “Then how can they file a report for PMLA Act offences? That way, ED is also ...We cannot say that they are not at all . If so, what they have been doing, and the registration of cognizance for PMLA offences on their volition deemed to be illegal per se. Cannot be done...if so, their status as investigating officers cannot be said to be an absolute no. Maybe, their powers maybe limited. Because, If they don't have a power to go for a wider investigation, as provided u/S 165 CrPC and their power is under the PMLA alone. That way, it may be correct.”
This exchange underscores the court’s view that the ED does possess investigative powers, albeit limited to PMLA offences, and that its report carries evidentiary weight.
Scrutiny of the SIT and Its Capabilities
The court also expressed dissatisfaction with the composition and competence of the SIT. During the hearing, Justice Badharudeen orally observed that a member of the SIT did not even know how to interpret the penal provisions of the PC Act, and had applied the wrong provision in a previous case—a mistake that had drawn adverse remarks six months earlier. The petitioner questioned whether such a team was capable of conducting a fair preliminary inquiry, especially when it lacked a vigilance department representative. The court’s comments suggest that the SIT’s formation may have been procedurally flawed, and that its ability to handle PC Act offences is suspect.
Implications and What Lies Ahead
The reserved verdict will clarify the legal obligations of state police when the ED forwards a recommendation under Section 66(2) PMLA. If the court holds that an FIR must be registered immediately, it could streamline the process for similar cases where parallel investigations under PMLA and PC Act arise. Conversely, if it upholds the state’s power to conduct a preliminary inquiry, it may provide a check on automatic prosecutions based solely on ED reports, but could also invite allegations of delay and political interference.
The case also highlights the tension between the state’s police powers and the ED’s authority under central legislation. The court’s observations on the ED’s status as an may have far-reaching effects on how PMLA reports are treated by state law enforcement.
Legal professionals will be watching closely for the final order, which is expected to address not only the mandatory FIR question but also the legality of the SIT’s formation and the scope of judicial review in such matters. Until then, the CMRL Exalogic case remains a high-stakes legal and political drama, with the poised to deliver a landmark ruling.
