The case related to alleged financial transactions between Cochin Minerals and Rutile Limited (CMRL) and now-defunct Exalogic Solutions Pvt. Ltd., a company formerly owned by Vijayan's daughter, T. Veena.

Former Kerala Chief Minister and Leader of the Opposition Pinarayi Vijayan has approached the Supreme Court challenging a Kerala High Court order directing the registration of an FIR in the alleged financial transactions between Cochin Minerals and Rutile Limited (CMRL) and now-defunct Exalogic Solutions Pvt. Ltd., a company formerly owned by his daughter, T. Veena.

The move comes a day after a Division Bench of the Kerala High Court dismissed applications filed by Vijayan, Veena and her husband, former minister P.A. Mohamed Riyas, seeking permission to appeal against the Single Judge's October 9 order directing the registration of an FIR in the case.

The Division Bench, comprising Justices K. Natarajan and Johnson John, held that the applicants had not established a prima facie or arguable case for granting leave to appeal. It also observed that the Single Judge's order did not prevent them from pursuing appropriate constitutional or statutory remedies against the registration of the FIR.

What did the division bench say?

Rejecting the applicants' contention that they had not been given an opportunity to present their case before the Single Judge passed the order, the Division Bench observed that an accused in a corruption case has no legal right to be heard before an FIR is registered.

The Court also held that a preliminary inquiry was not necessary where the information furnished under Section 66(2) of the Prevention of Money Laundering Act (PMLA) was accompanied by sufficient material disclosing the commission of cognisable offences.

The applicants had argued that the Single Judge's direction effectively foreclosed their options to challenge the registration of an FIR. They also sought an interim stay, contending that any delay in granting relief would render their appeals ineffective.

The Division Bench, however, declined to grant them leave to appeal, while clarifying that they could pursue appropriate remedies against the FIR.

Background Of The CMRL-Exalogic Case

The controversy arose from information shared by the Enforcement Directorate (ED) with the Kerala Police Chief under Section 66(2) of the PMLA, recommending the registration of a vigilance case against Vijayan and others over alleged financial transactions involving CMRL and Exalogic Solutions.

The ED alleged that CMRL paid approximately ₹3.28 crore to Exalogic Solutions, a company formerly owned by Veena, purportedly towards IT consultancy services.

It was alleged that Vijayan entered into a criminal conspiracy with the others, abusing his official position and adopting corrupt means to obtain illicit pecuniary benefits for himself, his daughter and her company between 2016 and 2020.

Mr. Riyas and Ms. Veena were also accused of involvement in hawala transactions and transferring illicit cash to foreign countries through intermediaries.

The Kerala government had earlier constituted a Special Investigation Team (SIT) to conduct a preliminary inquiry into the information supplied by the ED.

A Single Judge of the Kerala High Court, hearing a petition filed by political activist K.M. Shajahan, set aside the government's decision to constitute the SIT and directed the Vigilance Director to register an FIR.

The single judge had opined that forming an SIT without first registering an FIR is illegal.

The court had clarified that the Vigilance department can proceed with the investigation by registering an FIR as it prima facie opined that there is sufficient evidence to warrant an immediate case under the Prevention of Corruption Act.

The Single Judge's order prompted Vijayan, Veena and Riyas, who were not parties to the original proceedings, to seek permission to challenge it before a Division Bench.

The State had argued that the preliminary inquiry was intended to determine whether the ED's information disclosed a cognisable offence. It also maintained that the State had the discretion to decide whether to register an FIR or conduct a preliminary inquiry.

The Division Bench rejected the applications seeking leave to appeal, noting that the applicants remained free to pursue appropriate legal remedies against the FIR.

Case Title: Pinarayi Vijayan v. KM Shajahan And Ors