CMRL-Exalogic case: Kerala High Court stays FIR against ex-CM Pinarayi Vijayan, daughter Veena, others

The Kerala High Court on Monday stayed further investigation in a criminal case registered against CPI (M) leader and former Chief Minister Pinarayi Vijayan, his daugher Veena Thaikkandiyil, her husband and MLA Mohammed Riyas, and others in connection with the CMRL-Exalogic case [Pinarayi Vijayan v. Adv KM Shajahan & Ors.].

A Bench of Justices KM Natarajan and Johnson John passed the interim order on appeals filed by Vijayan and others (appellants) challenging a single-judge's directive to register a first information report (FIR) in the CMRL-Exalogic case.

Another Division Bench of the High Court had previously declined to hear their appeals without delving into its merits and dismissed their applications seeking permission to appeal the single-judge order.

Subsequently, the appellants moved the Supreme Court for relief. The top court last week said that the Division Bench of the High Court ought to to hear the appeals in detail. The top court, therefore, stayed the probe against the appellants for a week so that the High Court can hear the appeal.

Following this development, the High Court heard appeals today and stayed the single-judge ruling. It has also ordered a stay on the investigation in the case until further orders.

"All four appeals are hereby admitted. Consequently, the judgment of the single judge of this court under challenge is stayed until the next date of hearing. Further investigation on the FIR is kept in abeyance until further orders," the Court said.

The matter is tied to alleged irregularities in the financial transactions between Cochin Minerals and Rutile Limited (CMRL) and Exalogic Solutions Private Limited, a company owned by Veena Thaikkandiyil.

The Enforcement Directorate (ED) has claimed that it unearthed certain incriminating material, which it shared with the Kerala Police. The State decided to set up a Special Investigation Team (SIT) to hold a preliminary inquiry instead of immediately registering an FIR.

A lawyer named KM Shajahan, who had also served as an additional private secretary to former CM and CPI (M) leader, late VS Achuthanandan when he was the Leader of Opposition, approached the Kerala High Court challenging this move and sought the registration of an FIR.

On October 9, a single-judge Bench of the High Court allowed Shajahan's petition and ordered the State's Vigilance and Anti-Corruption Bureau (VACB) to register an FIR based on the ED's information against Vijayan, Veena, Riyas and others suspected of corruption, including Nikhil P, Hassan Varish, Shyjal Muhammad and Nandulal M.

This was challenged before a Division Bench of the High Court by way of appeals filed by Vijayan, Veena, Riyas and others.

Notably, the appellants (Vijayan, Veena, Riyas and others) were not parties to the writ petition in which the single-judge's October 9 order was passed. Therefore, a question arose as to whether they can be given permission to challenge a judgment in a case to which they were not parties.

A Division Bench of Justice K Natarajan and Justice Johnson John on October 15 refused to permit the appellants to proceed with their appeal. It held that the appellants can still challenge the FIR itself, instead of the single-judge order for the registration of the FIR.

Vijayan and others then approached the Supreme Court challenging the High Court's direction to register an FIR.

The vacation bench of the Supreme Court comprising Justices Joymalya Bagchi and V Mohana took exception to the High Court hastily directing registration of FIR based on EDs information, without hearing Vijayan.

The Court also cautioned the ED against meddling into the domain of other probe agencies.

Pertinently, the Supreme Court said that the issue of whether a State agency is obligated to register an FIR in a corruption case based on a recommendation made by ED is an issue that needs detailed examination.

The matter was then sent back to the High Court's Division Bench for a detailed examination on the merits of the appeals filed by Vijayan and the others.

Senior Advocates Siddharth Luthra and Gopalakrishna Kurup appeared today for Pinarayi Vijayan. Senior Advocate N Hariharan appeared for Veena Thaikkandiyil and Mohammed Riyas.

During the hearing, the appellants' counsel questioned how an FIR was registered in this case merely on the ED's dictates.

"ED is an organ of the centre. Direction cannot be given by ED to State Police to register FIR ...  Why is the ED piggybacking on the shoulders of this interloper?" contended Hariharan.

He highllighted that the Serious Fraud Investigation Office (SFIO) had already initiated a probe into similar allegations. He termed the ED's move to call for parallel criminal proceedings mischievous, particularly since the SFIO probe has been stayed.

"Since SFIO probe has been stayed, the mischief they (ED) have done is to piggyback on the shoulders of the writ petitioner who has no locus in this case."

Hariharan also questioned whether there was any prima facie case made out for the FIR to stand.

"They simply throw words arround like 'quid pro quo'. Allegations should be clear. The money should reach the hands of either Riyas or Vijayan. That is not there."

Another argument made was that the single-judge court did not have the jurisdiction to entertain Shajahan's plea for an FIR once it was admitted that the plea appeared to be in the nature of a public interest litigation.

The appellants further flagged that they were not heard at all before the single-judge passed an order directing the registration of an FIR against them.

"I ought to have been a party when the single judge was hearing the third party petitioner," Luthra said.

Advocate General Jaju Babu appeared for the State and defended its move to first conduct a preliminary inquiry before deciding whether an FIR was warranted in the matter.

"Our decision to order a preliminary enquiry after receiving information from ED was correct. That is our position. We did not say we will not register an FIR. This was the first step."

Additional Solicitor General of India P Sreekumar represented the ED and maintained that a stay on the SFIO probe into the CMRL case could not be cited by the appellants to challenge the validity of the State Police's FIR.

"The challenge against the SFIO probe was made by the company, CMRL. Here, the individuals are before the court," he said.

He also urged the Court not to grant any interim stay.

Advocate V Sethunath appeared for Shajahan.

After hearing the preliminary submissions, the Court has issued an interim stay on the FIR till further orders.

Besides Senior Siddharth Luthra, N Hariharan and Gopalakrishna Kurup, advocates Mayank Jain, Ameen Hassan, Gilbert George Correya, Madhur Jain, Arpit Goel, KK Ravindranath, P Narayanan, Manu V, Thanushree Damodaran, Abhijith MA and Clarina Christopher P also appeared for Vijayan and Veena.

Riyas, Nikhil, Varish, Shyjal, and Nandulal's appeals were filed through advocates Ameen Hassan K, Lisna Sherin TT, Ummul Fadla T, Abdul Fathah Rajesh A and Muneer Ahmed.