The Kerala High Court on Friday dismissed the appeal filed by Cochin Minerals and Rutile Limited (CMRL) against the Single Bench order which permitted Directorate of Enforcement's probe under the Prevention of Money Laundering Act (PMLA).

The HC division bench stated that the summons issued by the ED under Section 50 of the PMLA to the CMRL office bearers is maintainable and declined to quash the Enforcement Case Information Report (ECIR) recorded by the ED to start the money-laundering investigation under the PMLA.

The HC Division Bench, quoting the relevant portions of SC verdict on Vijay Madanlal Choudhary v. Union of India case, stated that the ECIR is not a statutory document, and there is no provision in the PMLA, requiring the authority to record ECIR or to furnish copy to the accused, as in the case of Section 154 of the Cr.P.C. 

As far as furnishing the copy of the ECIR is concerned, it was observed that the ECIR may contain sensitive operational details about the material in the ED's possession, disclosure of which could jeopardize the investigation and frustrate the attachment of proceeds of crime, the order noted. The HC also added that the prayer to quash the ECIR was misconceived. 

Ruling out the contention that the initiation of inquiry by the ED requires a prior registered crime or complaint involving a scheduled offence, the HC noted that an inquiry is the foundational process and when the ED receives information suggesting the existence of proceeds of crime, it may commence an inquiry for the purpose of gathering evidence. The investigation under the PMLA is not confined to collecting evidence for theprosecution, but it includes all action taken by the ED for any purpose under the Act. 

"It should be borne in mind that the prosecution is the penal limb of the enactment. It is the final consequence of the inquiry/investigation revealing sufficient material establishing a person’s involvement or activity connected with the proceeds of crime. It is only at this stage the authority files a formal complaint," the order said.

The court also said that non-registration of an FIR or non-filing of a complaint in respect of a scheduled offence will not bar the ED from initiating civil action under the PMLA. The registration of a scheduled offence is a prerequisite only for penal prosecution under Section 3 and not for the civil action of attachment under Section 5 or the exercise of inquiry powers under Section 50 of the PMLA.

The court also rejected the plea of the CMRL to halt further proceedings in the case until an appeal is filed in the Supreme Court. 

The HC order will give a fresh impetus to the ED. A day after it won a Single Bench order, the ED conducted search operations on May 27 at 10 premises across various premises in Kottayam, Ernakulam, Kannur, Thiruvananthapuram and Bangalore including residences and offices of CMRL directors S N Sasidharan Kartha, Saran S Kartha, Veena T (daughter of former Kerala Chief Minister Pinarayi Vijayan) and her company Exalogic Solutions Private Limited. 

It is learnt that higher officials of ED have arrived in Kochi and the agency is likely to resume the investigation, having won a favourable HC order.  

The HC bench comprising Justice RajaVijayaraghavan and Justice K V Jayakumar earlier held a detailed hearing on the petition on Monday. The court then directed the ED to maintain the status quo in the case until the verdict is given. CMRL's counsel Siddharth Luthra, during the hearing, raised questions about whether the PMLA provisions can be invoked without the registration of an FIR. The counsel also then expressed doubts over the scheduled offence under the Companies Act, which has triggered PMLA proceedings. He said that there was a lack of clarity.

The ED's probe focuses on CMRL's fictitious cash expenses totalling ₹182 crore over 15 years, allegedly used to bribe various individuals. The Serious Fraud Investigation Office (SFIO) had filed a prosecution complaint on April 3, 2025, against 12 individuals, including former Chief Minister Pinarayi Vijayan’s daughter, Veena T, before the Additional Sessions Court-VII, Ernakulam, alleging corporate fraud, including offences scheduled under the Prevention of Money Laundering Act (PMLA).

On May 26, a Single Bench of the High Court dismissed CMRL’s plea to quash the ED’s Enforcement Case Information Report (ECIR) and related summonses issued under the PMLA. The court held that the initiation of a PMLA investigation is valid and does not require a "predicate offence" at the time of initiation.

Responding to the court decision, Congress MLA Mathew Kuzhalnadan said, "To understand the pay-off case, one need not be a judge or a lawyer. Simply put, crores of black money were retrieved from a company via bank transfer without any service being provided or tax being paid. Even a cursory glance shows that this is a method for converting black money into white," he said. 

"When the pay-off case was made public, the CPM secretariat held a meeting and issued a statement claiming that tax was paid and that it was a transaction between two companies. They tried to convince party workers of this. Now, all of those claims have been disproven. The single bench concluded, based on the ED probe, that black money was indeed laundered. The division bench has directed the ED to conduct a deeper investigation. The hope now is that the ED will carry out the probe properly," Kuzhalnadan added. "The investigation now includes CMRL, Veena Vijayan and others. The probe is expected to reach Pinarayi Vijayan and he may be included in the list of accused as the investigation progresses," he added. 

Kuzhalnadan added, "The CPM and Pinarayi Vijayan are now trying to reassure party workers, which is partly why there was a political attack against the ED during raids. Pinarayi had earlier said that all central agencies should investigate, so why did he react this way when the ED came to his doorstep?"

Meanwhile, BJP leader Shone George said, "Now that all legal hurdles to conduct the investigation have been cleared, the ED can continue its probe. The ED will further investigate Veena Vijayan based on all evidence so far. The probe will definitely reach Pinarayi Vijayan in the coming days," he said.