Pinarayi Vijayan Gets 10-Day Relief From Supreme Court In CMRL-Exalogic Case; FIRs Intact, Probe Paused

The Bench of Justices Joymalya Bagchi and V. Mohana found that their requests for leave to appeal "were incorrectly turned down" and restored the appeals to the Division Bench's file.

So that the appellants could seek interim relief before the High Court, the Court directed that "the investigation in the impugned FIRs shall remain stayed for a period of ten days" from 21 October. The FIRs themselves were not quashed.

The order, signed on 21 October during the Dussehra vacation, disposed of four appeals arising from the Division Bench's judgment of 15 October 2026.

The case began with an investigation by the Serious Fraud Investigation Office (SFIO) under Section 447 of the Companies Act, 2013.

Senior Advocate Zoheb Hossain, for the Enforcement Directorate (ED), told the Court that the SFIO had looked into the affairs of M/s CMRL and M/s Exalogic, the latter "being a wholly owned company of Veena T., daughter of the former Chief Minister".

During the course of that investigation, he said, "various materials transpired, including transfer of funds to foreign shores by Veena T. and her husband". On the basis of material gathered under the PMLA, the ED then shared information with the State Government under Section 66(2) "for necessary action as per law".

The Director General of Police responded by constituting a nine-member Special Investigation Team to conduct a preliminary enquiry. The order records that K.M. Shajahan, the writ petitioner before the High Court, "being dissatisfied with such dilatory tactics to avoid registration of FIR and commencement of investigation against the former public servants and others", approached the High Court.

A Single Judge quashed the State's decision to hold a preliminary enquiry. The Director of the Vigilance and Anti-Corruption Bureau, Thiruvananthapuram, was "specifically directed to register FIR based on the information furnished under Section 66(2) of the PMLA for the offences disclosed therein under the PC Act, against the suspected persons specifically mentioned therein, forthwith, without any delay, and to investigate the allegations through competent officers of the Vigilance and Anti-Corruption Bureau and file the final report, without much delay."

Senior Advocate Ramesh Babu, for the State, told the Supreme Court that two FIRs, VC 6/2026/SIU-1 and VC 7/2026/SIU-1, had been registered at PS SIU-1, Thiruvananthapuram on 12 October 2026, and that the investigation had begun as the Single Judge directed.

None of the appellants had been a party to the writ proceedings. Their applications for leave to appeal were dismissed by a Division Bench, which held that "the accused in a corruption case has no legal right to be heard before registering the FIR and the accused persons are also not entitled to demand a preliminary inquiry before registering an FIR in a corruption case." It also found that the Single Judge's judgment "has not affected the right of the applicants to pursue their constitutional or statutory remedy against the registration of the FIR".

Senior Advocates Sidharth Luthra and N. Hariharan, for the appellants, argued that the Division Bench had erred in law in refusing leave to appeal against the order directing registration of the FIR and investigation against their clients.

Advocate Koshy John, for Shajahan, relied on Vijay Madanlal Choudhary v. Union of India. He contended that the State was obliged to register an FIR on the ED's communication under Section 66(2), and that the appellants, as accused persons, had no right to be heard at the time of registration.

The Bench did not accept this. It distinguished a registration by the State on its own from one brought about by the Court: "This is not a case where, on receipt of communication under Section 66(2), the State had registered a case on its own. On the contrary, the registration of the FIR and commencement of investigation thereon was pursuant to a judicial order passed by the High Court."

The Court said the Single Judge had observed that the ED's material disclosed a cognizable offence and that it was therefore obligatory for the State to register an FIR. It held that this finding would bind the appellants if it went unchallenged, "If the appellants are not permitted to assail such finding in the appellate proceedings, the same shall come in their way, if an independent proceeding is initiated, assailing the First Information Report as per law."

The Bench also pointed to the change in the law on court-directed registration of FIRs. Under Section 156(3) of the old Code of Criminal Procedure, it noted, a Magistrate could direct registration without any participation by the public servant or their superior. Section 175(4) of the Bharatiya Nagarik Suraksha Sanhita, 2023 now makes an order of investigation on a complaint against a public servant subject to a report from the officer superior to them and to consideration of the public servant's own account of the incident.

Hossain argued that this requirement is limited to offences committed by a public servant in the discharge of official duty, and would not apply to former public servants in corruption cases. The Bench clarified that it had referred to the provision "not in reference to the merits of the case before us, but to elucidate the expansive jurisdiction envisaged in the new law with regard to participation of a potential accused prior to registration of FIR."

The Court then separated the direction to register the FIR from the further directions the Single Judge had issued, "…the Single Judge has not only directed registration of an FIR, which is the mandate in Vijay Madanlal Choudhary (supra), but also directed commencement of investigation and filing of final report, which may require consideration of other statutory requirements under the special law including sanction under Section 17A thereof."

The point was argued at length during the hearing. According to our live coverage, the Bench asked counsel how an investigation against a former Chief Minister could begin without first addressing the sanction requirement under Section 17A of the Prevention of Corruption Act.

Justice Bagchi also remarked during the hearing, "We are relearning advocacy in the Supreme Court." These oral exchanges do not appear in the written order.

Reading these circumstances together, the Bench concluded that "these facts clearly show the appellants had locus to prefer appeal against the impugned judgment and order and their prayer for leave to appeal were incorrectly turned down."

The Supreme Court set aside the Division Bench's judgment and permitted the appellants to pursue their appeals, which were restored to file. It made clear that its observations were "limited to the issue at hand, that is, the locus of the appellants to prefer the appeal, and not an expression of opinion on merits", and granted the appellants liberty to seek interim relief in accordance with law.

The ten-day stay of investigation, the Bench said, "shall not be treated as a conclusive opinion expressed on interim relief, and the Division Bench shall be entitled to fashion independently such relief in accordance with law."

The Court was also told that the ED had registered an Enforcement Case Information Report (ECIR) in respect of the impugned FIRs. It said, "We express no opinion with regard to its validity and keep it open to be agitated in appropriate proceedings, if instituted in accordance with law."