The Kerala High Court on Friday refused to interfere with the Enforcement Directorate’s (ED) investigation against Cochin Minerals and Rutile Limited (CMRL), holding that the registration of a scheduled or predicate offence was not a prerequisite for the agency to initiate civil action under the Prevention of Money Laundering Act (PMLA), 2002.
The Division Bench of Justice Raja Vijayaraghavan V and Justice KV Jayakumar dismissed an appeal filed by CMRL and its officials, challenging an earlier decision of a single judge Bench refusing to quash the ED proceedings.
The counsel appearing for CMRL contended that in the absence of a registered predicate offence, the ED lacked jurisdiction to initiate proceedings under the PMLA.
Rejecting the argument, the Division Bench clarified that the existence of a scheduled offence was necessary only for launching criminal prosecution for the offence of money laundering under Section 3 of the PMLA. The Court held that such a requirement did not apply to civil measures such as provisional attachment under Section 5 of the Act or to the exercise of inquiry and investigative powers available to the ED.
The Bench further observed that registration of a scheduled offence was a condition precedent only for penal prosecution and not for civil action or inquiries undertaken under the statutory framework of the PMLA.
The High Court also declined to quash the Enforcement Case Information Report (ECIR) registered by the ED. It noted that an ECIR was not a statutory document under the PMLA and that even the absence of an ECIR would not prevent the ED from initiating civil proceedings. In view of this legal position, the Court held that no case was made out for quashing the ECIR.
CMRL, a Kerala-based public limited company engaged in the manufacturing of synthetic rutile and other industrial chemicals, has been under investigation following allegations of financial irregularities and suspected money laundering transactions.
The controversy primarily relates to allegations that CMRL made illegal payments to Exalogic Solutions Private Limited, an information technology company owned by Veena Thaikkandiyil, the daughter of former Kerala Chief Minister Pinarayi Vijayan. Apart from the ED, the matter is also under investigation by the Serious Fraud Investigation Office (SFIO).
On May 26, Justice TR Ravi dismissed a petition filed by CMRL and four of its officials seeking the quashing of ED proceedings. The single judge Bench observed that the challenge was premature, as it was filed immediately after the issuance of summons by the ED.
The High Court also took note of the fact that the SFIO had filed a complaint alleging violations of provisions of the Companies Act by CMRL. According to the Court, those alleged offences constituted scheduled offences under the PMLA and could not be ignored while examining the legality of the ED investigation.
Following the single-judge Bench verdict, the ED conducted searches at multiple locations, including the residence of former Chief Minister Pinarayi Vijayan and members of his family, as part of its ongoing investigation.
Before the Division Bench, CMRL also raised objections regarding the manner in which the writ proceedings had been handled by the single judge. It was pointed out that the original petition had been filed in 2024 and, after extensive hearings, judgment had been reserved on August 7, 2024.
While the matter remained reserved, the ED filed an additional affidavit in May 2025 stating that it had received further information from the SFIO. The case was thereafter relisted in July 2025 for additional hearings. CMRL objected to the filing of fresh material after the matter had already been reserved for judgment and argued that such a course caused serious prejudice to its defence.
The appellants further contended that the judgment was delivered nearly two years after it was initially reserved and that reliance had been placed on material arising from the SFIO investigation during the intervening period. According to CMRL, it was denied a proper opportunity to rebut those developments. The company also argued that it would have brought to the Court’s notice that the Delhi High Court had stayed the SFIO investigation had an opportunity been afforded to it.
The Division Bench, however, found no ground to interfere with the single-judge decision and upheld the continuation of the ED investigation. The appeal was accordingly dismissed, allowing the money laundering probe against CMRL and its officials to proceed in accordance with law.
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